South American Investments and Hemisphere Defense

Abstract

T IS generally assumed in this country that the capital inJ vestments of the United States in South America must be an important factor in hemisphere defense. The reasons for that assumption are seldom analyzed, and they cannot be elaborated here. A broad statement of the possible significance of these investments must suffice in a summary devoted primarily to their history, character, and present status. That hemisphere solidarity must rest upon the twofold foundation of common interests and common ideals seems to be a sound contention. Common interests and common ideals must exist, and there must be a reciprocal conviction of their existence if solidarity is to be achieved. The conviction without the reality will not last, and the reality without the conviction is likely to be ineffective. It will hardly be denied that capital holds an important place among human interests. If investments of the United States in South America may be made to serve both regions, they will become a common interest of both and so promote interdependence and solidarity. This is the positive role of capital investments. Negatively, the flow of capital from the United States into South America may prevent its flow from nations disposed to use it as a means of intimidation and conquest. These contentions, of course, are based upon the assumption that capital is needed and desired inSouth America, but such an assumption appears to be entirely reasonable. The history of the public finances of the South American nations indicates an eagerness to negotiate foreign loans, and their economic history indi-