Mr. Pierson Pitches Woo

Last week Warren Lee Pierson, twinkle-eyed, fat-fingered president of the Export-Import Bank, announced that for the time being he had spent his last diplomatic dollar courting sister republics to the south. He sat back to study the results of his wooing, figure whether he had scored over his rival, the Axis. One conclusion could be drawn: the course of bought love does not always run smooth.

Of the $700,000,000 woo-chest provided by Congress, President Pierson had lent almost $232,000,000 to Latin America. How much of this the Export-Import would see again was problematical. That U. S. manufacturers would benefit was certain. For Pierson had tied a string to most of the latest loans; with few exceptions, they provide that the money is to be spent in the U. S. Last week the exceptions began to cause trouble.

> One exception was Cuba. To prop up her sugar cane industry, Cuba asked for $50,000,000, settled for $11,200,000 and an upped sugar quota. When the sugar beet growers in the U. S. heard about the deal and their reduced 1941 quota (16% below 1940), they roared, charged the New Deal with wanting to kill the industry, quoted Secretary Ickes* to prove it.

> The case of Argentina was even more ominous. Few weeks ago it was rumored that Spain, the Axis' sleeping partner, would get a $100,000,000 credit for foodstuffs from her former colony. Argentina was on the U. S.'s books for just about the same amount--$60,000,000 from Pierson, to be spent in the U. S., plus a $50,000,000 stabilization fund from the U. S. Treasury to support her peso. When Pierson heard of this flirtation, he said: "No part of the U. S. loan will go to Spain. . . . Such stories are pure fantasy," pointed out that Argentina had not as yet drawn a cent on her grant. Yet Spain and Argentina have done business before, and last week Argentina's Ministry of Agriculture revealed that they were doing business again (though not on any $100,000,000 scale). Spanish ships were already in Argentine ports, ready to load 200,000-300,000 tons of wheat (market value: $3,700,000-$5,500,000). The affair was being financed by a "public utility having financial connections with Spain." Best guess was that that meant Sofina, international utility trust which owns properties both in Spain and in Argentina. Perhaps penniless Franco was holding Sofina's Spanish properties for ransom money to be delivered in Buenos Aires.

Whether fantasy or fact, Argentina's Spanish flirtation had good economic cause, was grave with postwar implications. La Preusa, Buenos Aires newspaper, last month spread out for all to read what few Americans like to admit:

"Nothing profitable nor durable can result for the economy of our country from these [U. S. loan] agreements. . . . The republic is a seller nation. . . . The United States can see this fact and draw its own conclusions. It is well to remember that small friendly credits can remedy small passing situations; the purchasing power of our country naturally remains the same. This will only grow larger when its meats and grains . . . find in the United States the markets which they should have but which are closed to them by law."

Elsewhere in Latin America, Pierson either pitched a better brand of woo or had less opposition. Other loans to date:

> To Brazil went $20,000,000 for a steel plant, $25,000,000 for agricultural tools, road building equipment, $4,340,000 for railroad electrification.

> To Chile's Fomento Corporation (Chilean RFC), $12,000,000 to purchase six Lockheed twin-engine 14-passenger transport planes, and to the Central Bank $5,000,000 for mining equipment, pumps, compressors, etc.

> To Costa Rica $4,600,000 for her section of the two-lane, concrete-curbed Inter-American highway (connecting San Jose with the Panama border).

> To the Dominican Republic $3,000,000 to build a slaughterhouse, community refrigerators in Ciudad Trujillo, finish a large hotel started by the Government about four years ago. The grant is called a "health" loan. Reason: the refrigeration system will revise a national law which requires all fresh meat to be eaten within two days or thrown away.

> To Ecuador for its segment of Inter-American highway $1,000,000, an additional $150,000 to fight a cocoa worm.

> To Nicaragua, $2,000,000 for its section of the Inter-American highway.

> To Paraguay $3,000,000 for its first road to upper hinterlands in the interior.

> To Venezuela $3,000,000, mostly for oil-drilling machinery.

> To Uruguay $7,500,000, part to finish a power dam on the Negro River started five years ago with German capital, the rest to improve the beef and wool indus tries. Since Great Britain has already bought all Uruguay's 1941 wool clip, the Uruguayan loan is indirect aid to Britain.

A new Southern Railway streamliner, to begin operating this spring from Memphis to Washington, will be steam instead of Diesel drawn between Lynchburg and Bristol, Va. Reason: between those points it will use the right of way of Norfolk & Western, which gets 80% of its freight business from hauling coal and refuses to allow a Diesel on its tracks.

*Ickes once said: "The beet sugar industry has no justification for existence. It is kept alive by artificial means and is a detriment to itself and the country."

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