Blacklist

In the Latin-American arena last week the U.S. fist smashed full into the Axis face. The sparring for the goods and good will of a continent was over. A Roosevelt proclamation made it total economic war. Some 1,800 firms and individuals in business from Rio Grande to Cape Horn were publicly declared to be Axis-owned or Axis-aiding, put on a blacklist. From now on none of these firms can receive U.S. goods. All their assets and credits in the U.S. are frozen.

Throughout Latin America, the blacklist meant an uprooting of long-established commercial relations. Great German firms like Agfa, Bayer and Merck Chemicals, Siemens and A.E.G. (German General Electric), Carl Zeiss (cameras), Condor and Lufthansa air lines were on the list. So were lesser German and Italian firms, some innocent neutrals and Americans.

Chilean officialdom fumed. In Rio de Janeiro, the news was a bombshell; even the U.S. embassy thought it a mistake. In the lineup outside the Commercial Attache's door was the cousin of Brazil's Foreign Minister Aranha, wondering why his Navebraz shipping company was listed. Brazilian legalists asked whether Standard Oil's Brazilian subsidiary would sell gas to Condor. If not, would it run afoul of Brazil's anti-trust laws? If yes, would Standard blacklist its subsidiary? In Buenos Aires, annoyed and puzzled businessmen chiefly feared a rise in prices, since German firms usually underquote U.S. by 50%.

But if the Presidential action was drastic, it was also imperative. For months the U.S. had pursued its Good-Neighbor policy with one hand, poured funds with the other into an Axis propaganda machine. Since the British blockade cut off German shipments to firms and agents in Latin America, these firms have switched to U.S. goods, frequently have relabeled them "Made in Germany." Many a firm peddled as much propaganda as merchandise. Smart Latin Americans, comparing U.S. anti-Axis professions with U.S. commercial practice, thought Good Neighborliness was funny: a papier-mache hand in a velvet glove.

To ease the pain the blacklist was bound to cause in Latin America, Washington was ready with some quick anesthetics. Priorities for Latin America's essential needs were already in the works (TIME, July 21). Added last week was a streamlined method of handling orders: governments below the border could get quick action from the State Department, private firms from Export Control Administrator Russell L. Maxwell. The Treasury announced a new general license, covering all dealings with Latin-American firms which had not been blacklisted. To top things off, the Commerce Department estimated that U.S. purchases this year would be $1,000,000,000 (twice Latin America's normal annual exports to Europe), would leave Latin America a $250,000,000 favorable balance of trade with the U.S.

Many Nazi firms had long expected the blacklist, dug themselves in with local suppliers, partners, in-laws. The blacklist is a real fist nonetheless. It includes all firms which Britain had blacklisted, plus some 500 more which Britain had not thought of. Moreover, the U.S. is watching some 2,000 other firms suspected of pro-Axis leanings, is ready to crack down any time its suspicions are confirmed. At week's end the State Department's Dean Acheson said a still bigger blacklist was in preparation, covering Nazi firms all over the world. From now on the economic war is open.

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