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    SOUTH AMERICA AND
    THE WAR

    BEING THE SUBSTANCE OF
    A COURSE OF LECTURES DELIVERED IN
    THE UNIVERSITY OF LONDON, KING'S COLLEGE
    UNDER THE TOOKE TRUST
    IN THE LENT TERM
    1918


    BY

    F. A. KIRKPATRICK, M.A.


    CAMBRIDGE
    AT THE UNIVERSITY PRESS
    1918




PREFACE


This little book contains the substance, revised and adapted for
publication, of lectures given in the Lent Term, 1918, at King's
College, London, under the Tooke Trust for providing lectures on
economic subjects. The course of lectures was in the first instance an
endeavour to perform a war-service by drawing attention to the activity
of the Germans in Latin America, and particularly to the ingenuity and
tenacity of their efforts to hold their economic ground during the war,
with a view to extending it after the conclusion of peace. A second
object was to examine more generally the bearings of the war on those
countries, and the influence of the present crisis on their development
and status in the world.

These two topics, though closely connected, are distinct. The first has
an immediate and present importance, the second has a wider historic
significance. The logical connexion between them may not seem obvious.
Yet the first enquiry, concerning German war-efforts in Latin America,
naturally and inevitably led to the second, concerning the larger issues
involved. The former topic is treated in Chapters I, II and III, the
latter in Chapters IV, V and VI. The term "South America" is used in the
title of this book as a matter of customary convenience; but it is not
meant to exclude the Antillean Republics or the Latin-American States
stretching to the North-west of the Isthmus of Panamá.

Clearly, an essay of this kind, if it was to be of any use, had to be
produced quickly. It was impossible to wait in hopes of achieving some
kind of completeness. The immediate and urgent importance of the subject
has been signally emphasised by the despatch of a special British
Diplomatic Mission to the Latin-American Republics, and by the King's
message addressed to British subjects in Latin America, in order to
inculcate the spirit of collective effort.

In the course of this essay frequent mention is made of the struggle for
emancipation, of the part which Englishmen took in that struggle and of
the great services rendered to the cause of independence by the action
of British statesmen, notably Canning. In a book which aims mainly at a
review of present conditions, it is impossible to enlarge upon these
topics, since their adequate treatment would involve some consideration
of political action on the European Continent and in the United States.
But since this passage of past history bears closely on the present
topic, it may be here mentioned that a brief account of these matters is
given in the _Cambridge Modern History_, vol. X, chap. IX.

The subject of German "peaceful penetration," which is incidentally
illustrated but not expounded in these chapters, may be studied in M.
Hauser's book entitled (in its English version) _Germany's Economic Grip
upon the World_; also in _The Bloodless War_, translated from the
Italian of Signor Ezio Gray. The character of that penetration, with its
admirable as well as its odious features, is briefly and clearly set
forth in a recent Report (Cd 9059) presented to the Board of Trade on
enemy interests in British trade.

I desire to express my indebtedness to _Le Brésil_, a weekly review of
Latin-American affairs published in Paris; to _The Times_ newspaper,
particularly the monthly _Trade Supplement_ and the South American
number (Part 183) of _The Times History of the War_; to the weekly
_South American Journal_; and to the monthly _British and Latin-American
Trade Gazette_. The quotation on pages 40-41 is taken from _The Times_;
and various other passages, not always verbally reproduced, are derived
from the same source.

It is impossible to thank by name all those who have placed at my
disposal their knowledge of Latin-American countries. But I owe an
especial debt of gratitude to the Master of Peterhouse for his aid and
advice in the production of this book.

The original matter has been considerably rearranged for purposes of
publication. But wherever convenience permitted, the lecture form has
been retained in order to indicate that the book owes its inception to
King's College, London.

                                                    F. A. K.

    _August 15, 1918._




CONTENTS


                                                 PAGE

    PREFACE                                         V

    INTRODUCTION--GENERAL CONDITIONS IN
    LATIN AMERICA                                   1

    CHAP.

    I.   POLITICAL CURRENTS AND FORCES             14

    II.  THE GERMAN OUTLOOK ON LATIN AMERICA       25

    III. THE ECONOMIC WAR AND ITS PROPAGANDA       34

    IV.  THE RECOGNITION OF LATIN AMERICA          45

    V.   EFFECTS OF THE WAR ON THE REPUBLICS       53

    VI.  PAN-AMERICANISM                           66

         LATIN-AMERICAN REPUBLICS                  78

     The map at the end of the book shows the former Spanish and
     Portuguese possessions in America, and also the existing
     Latin-American Republics.




SOUTH AMERICA AND THE WAR




INTRODUCTION

GENERAL CONDITIONS IN LATIN AMERICA


The New World or Western Hemisphere consists of two continents. The
greater part of the northern continent is occupied by two great Powers,
which may be described as mainly Anglo-Saxon in origin and character.
One of them, the Canadian Federation, is a monarchy, covering the
northern part of the continent. The other, a republic, the United
States, occupies the middle part. To the south and south-east of these
two extensive and powerful countries stretch the twenty republics,
mainly Iberian in origin and character, which constitute Latin America.
These lands cover an area which is about twice the size of Europe or
three times the size of the United States. Their population approaches
eighty millions. Latin America, extending as it does through every
habitable latitude from the north temperate zone to the Antarctic seas,
possesses every climate and every variety of soil, and accordingly
yields, or can be made to yield, all the vegetable and animal products
of the whole world. Moreover, most of the republics also severally
contain territory of every habitable altitude, so that a man can change
his climate from torrid to temperate and from temperate to frigid simply
by walking up-hill. Thus, equatorial lands can produce within the range
of a few miles all the products of every zone. Most of the republics
also furnish an abundance and variety of mineral products. The name
Costa Rica, or Coast of Riches, which was given by the early discoverers
to a small strip of the mainland, was prophetic of all its shores. And
the fable of El Dorado, concerning its interior wealth, has proved to be
not fabulous but only allegorical.


_Geographical Grouping_

The geographical distribution of these republics should be indicated.
Three of them are island states of the Caribbean Sea. Cuba is the
largest of the Antilles; Santo Domingo and Haiti divide between them the
next largest. The rich tropical fertility of these West Indian isles has
been a proverb for centuries and need not here be emphasised. Upon the
mainland, the vast territory of Mexico and the five Central-American
republics may be grouped together, forming as they do a kind of
sub-continent, a narrowed continuation of North America. Through this
region a broad mountain-mass curves from north-west to south-east. This
configuration provides the characteristics and the varied products of
every zone upon the same parallel of latitude: the torrid coastal
strips, bordering both oceans; the beautiful, wholesome and productive
region of the central plateau and long upland valleys; and finally the
chilly inhospitable regions of the mountain heights. The long sweep of
the country south-eastwards through the tropics also provides a wide
range of character, from the cattle-rearing plains of Northern Mexico to
the coffee and banana plantations of Costa Rica. Nowhere are lands of
richer possibilities to be found.

The small newly-created Republic of Panamá completes this northern
system of Latin-American countries. Thus, before coming to South America
at all, we count ten Latin-American states, three in the Antilles, seven
upon the mainland.

The other ten republics lie within the continent of South America. That
continent is shaped by nature in lines of a vast and imposing
simplicity, so that it is possible to sketch its main features in a few
words. It is divided broadly into mountain, forest and plain--the
immense chain of the Andes, the vast Amazonian forests, the
wide-stretching plains of the Pampa, and the colossal water system of
the three rivers, Orinoco, Amazon, La Plata. The dominating element is
the great backbone, the cordillera of the Andes. From the southern
islands of Tierra del Fuego this cordillera stretches for 4000 miles
along the Pacific coast to the northern peninsulas of the Spanish Main,
and thence throws out a great eastward curve along the southern shore
of the Caribbean Sea. This continuous mountain-wall, clinging closely to
the Pacific coast, determines the whole character of the continent. In
the tropical zone, the trade winds, blowing continually from the
Atlantic, sweep across South America until they strike this towering
mountain barrier. Then they shed their moisture on its eastern slopes,
which give birth to the multitudinous upper waters of the Orinoco, the
Amazon and the western affluents of the River Plate. The Amazon rather
resembles a slowly moving inland sea, its twelve principal tributaries
all surpassing the measure of European rivers. The River Plate pours
into the ocean more water than all the rivers of Europe put together.
The Orinoco, shorter but not less voluminous, drains a vast area with
its 400 tributaries.

But the Andes, whose forest-clad eastern slopes pour these immeasurable
water-floods across the whole continent to the Atlantic, oppose to the
Pacific, in the southern tropics, a bare dry wall of rock and yellow
sand. In the north, _the garrua_, the winter mist of equatorial Peru,
supplies moisture for cultivation. South of this region, the rainless
desert stretches, a ribbon-like strip, between the mountains and the
sea. Here, except in some transverse river-valleys, not a blade of grass
can grow for over a thousand miles. Yet it is this very barrenness which
has produced the materials of fertility for other lands in the form of
guano and nitrate deposits. Far to the south, in the "roaring forties,"
these conditions are reversed. Here, moisture-laden winds blow
continually and stormily from the Pacific, feeding the dense and soaking
forests of southern Chile. In the same latitudes, to the east of the
Andes the terraced plains of Patagonia supply sheep pasture, thinly
nourished by slight rainfall, although, over so vast an extent, these
flocks amount to many millions. In the more temperate regions, between
these zones of climatic extremes, more normal conditions prevail. On one
side of the Andes are the rich valleys of Central Chile, on the other
side the wide plains of the Argentine Pampa, formerly given over to
pasture, now producing wheat, maize, flax, barley and oats as well as
meat, hides and wool.

South America has been called the fertile continent. Considering that
most of the land lies within the tropics, it might be called the
habitable continent--habitable in comfort and health by white men. In
form, the continent may be roughly compared with Africa, but the
comparison is in favour of South America. The traveller who has sailed
along the east or west coast of tropical Africa meets a contrast on
crossing the Atlantic. Along the Brazilian coast, he finds a succession
of busy ports, crowded with the shipping of all nations--flourishing and
growing cities, inhabited largely by Europeans living the normal life of
Europe. The perennial trade winds, blowing from the sea, bring coolness
and health; and, almost everywhere, the worker in the ports may make his
home upon neighbouring hills. On the west coast, tropical conditions are
even more striking. Here, a soft south wind blows continually from
cooler airs, and the Antarctic current flowing northwards refreshes all
the coast. At Lima, twelve degrees from the Line, one may wear European
dress at midsummer and, descending a few miles to the coast, may plunge
into a sea which is almost too cold. Moreover, in these regions the
Andine valleys offer every climate, and a short journey from the coast
leads one to uplands resembling southern Europe. Higher yet, beyond the
first or western chain of the Andes stretches the vast and lofty plateau
enclosed between the double or triple ranges of volcanic mountains. The
western part of Bolivia, though tropical in situation, is a temperate
land, lying as it does at a height of above 12,000 feet. This broad
Bolivian plateau narrows northwards through Peru and finally contracts
into the Ecuadorian "avenue of volcanoes." Here, in the very central
torrid zone, a double line of towering peaks shoot their fires far above
plains and slopes of perpetual snow. Thence the cordillera opens out
northwards into the broad triple range of Colombia, which encloses wide
river valleys of extraordinary richness and fertile savannahs, enjoying
perpetual spring.

Lastly, it should be noted that some of the best part of South America
begins where Africa ends. Buenos Aires, Montevideo, Capetown and Sydney
lie approximately in the same latitude, about 34° or 35° south. But some
of the best parts of Chile and Argentina stretch far to the south of
this latitude. Alone of the southern continents, South America thrusts
itself far through the cool regions of the temperate zone.

Hitherto, white settlement in South America has, in the main, followed
the easiest lines, along the coast, upon the southern plains and up the
river courses. Of the three great rivers, the Orinoco is the least
developed, partly owing to natural difficulties--namely, an uneven
shifting bed and great differences of water level--partly owing to
artificial and political conditions; but in the wet season its waters
admit navigation up the main stream and its principal western affluent,
the Apure, almost to the foothills of the Colombian Andes; and the trade
winds, blowing upstream, carry sailing craft half across the continent.
Upon the Amazon system, Manaos, one of the great ports of Brazil, is 900
miles from the sea: Iquitos, 2300 miles from salt water, is accessible
to the smaller class of ocean steamers. Upon the Paraná, 1000 miles from
the ocean, stands the port of Asunción, capital of Paraguay, accessible
to ocean ships of shallow draught and to large river steamers:
stern-wheel steamers can mount the Paraguay River 1000 miles farther to
the remote Brazilian port of Cuyabá.

The navigation of both these river systems, the Amazon and the River
Plate, is limited or rather interrupted by the fourth great feature of
the continent, the Brazilian plateau. The Paraná and its affluents
plunge from this plateau to the southern plain in tremendous waterfalls.
The southern tributaries of the Amazon pierce their way down into the
Amazonian valley along defiles, cataracts and rapids sometimes extending
scores of miles. The Amazonian affluents are mostly navigable from the
main river to the foot of these cascades. Above the cascades, there
stretch fresh reaches of navigable water, providing many paths into the
far interior. Similar conditions are found on the two branches of the
River Tocantins and on other Brazilian rivers, such as the São Francisco
and the Paranahyba. With the future growth of population, the
construction of lateral railways and, later, perhaps the partial
canalisation of rivers, there is no limit to the possibilities of
internal water communication. The wealth of water power which awaits
application is obvious. As to possibilities of water storage and
irrigation, it suffices to say that on the Lower Orinoco and also on the
Lower Amazon the difference of water level between wet and dry seasons
is at least fifty feet, and most of the affluents rise and fall
proportionately.

The great Brazilian plateau, which has just been mentioned, further
justifies the description of South America as the fertile continent--the
region of habitable tropics. The vast scale of this plateau and its
relation to the River Plate system justify its description here as a
continental feature rather than a purely national feature, although it
is mainly a national possession of Brazil. From the north-east shoulder
of the Brazilian coast, this varied plateau, seamed by many clefts,
stretches southwards and south-westward in a vast semi-circular sweep
dividing the two river-systems. The Paraná and its affluents plunge from
this plateau towards the south and west. Northwards and eastwards it
sends a multitude of streams to the Amazon and the Atlantic. These
Brazilian uplands naturally vary in character and productiveness, but
they are in great part suitable for white habitation and especially for
the grazing of cattle. There is no winter; there is little of excessive
or torrid heat; the grass grows all the year round; and in the
neighbourhood of some rivers, the grasslands are annually renovated by
seasonable and shallow floods.


_Political Distribution_

Among the republics, the United States of Brazil stand in a class apart,
by virtue of the Portuguese origin and character of that country, its
very distinct history and its immense size, occupying, as it does, more
than half the continent. As to the republics of Spanish origin, no
single classification suffices. The most obvious division is that which
groups them into tropical and temperate countries. The five republics of
Venezuela, Colombia, Ecuador, Peru and Bolivia, which lie wholly within
the tropics, form a group of states which were closely connected in the
early history of emancipation and which are still marked by a general
though not very close similarity in respect of geography and
ethnological conditions. Chile and Argentina lie mainly in the
temperate zone; Uruguay wholly so; and these, with the southern parts of
Brazil, are the regions most obviously suitable for white settlement.
These three southern republics may also be described as the most
European part of the continent, whereas the five tropical republics have
a large admixture of indigenous, and, in parts, also of negro, blood.

The small sub-tropical republic of Paraguay, secluded in the interior of
the continent, does not quite fall into either group, but belongs to the
system of River Plate countries. For the three Atlantic republics of the
southern hemisphere, Argentina, Uruguay, Paraguay, form a distinct group
or sub-continent known as the "River Plate" and thus suggest a second
classification into the Rio-Platense and the Andine states. Lastly, a
glance at the map shows that Colombia and Venezuela differ from all
their southern neighbours in that they border upon the Caribbean Sea,
that Mediterranean Sea of the New World which stretches between the two
continents. Thus these two republics complete the circle of that
Mediterranean system of lands--the Antilles, Mexico, Central America,
Panamá--in which the United States are the dominant Power and in which
Great Britain, France and Holland are also members--one may perhaps say
subsidiary members. Thus each of these republics of the Spanish Main has
a dual character. They are on the one hand South American continental
states; but their coasts also face the coasts of the United States, and
their borders, to east and west, touch lands which are not purely
Latin-American in character. Venezuela, both historically and actually,
faces both ways. On the one hand she is the country of the Orinoco, of a
vast continental interior: on the other hand she belongs also to the
Antillean system: her eastern neighbour is British Guiana, and her
territory almost locks fingers with the British island of Trinidad,
which is in some sort the distributing commercial centre for all the
Spanish Main. Thus Venezuela completes that long Antillean chain which
curves from Florida to the Spanish Main, a chain whereof several links
are in the possession of the United States. This dual character stands
out in the early history of the country. For, during most of the
colonial period, Venezuela was the only part of South America not
attached to the Viceroyalty of Lima. Eastern Venezuela depended on the
Audiencia of Santo Domingo and was thus connected with the Antilles and
with the Viceroyalty of Mexico, that is to say with North America. Then
followed a period of dependence on the Viceroyalty of Santa Fé de
Bogotá, until finally Venezuela was erected into a separate
Captaincy-general.

In the Republic of Colombia the dual position has been forced into
prominence by recent events. On the one hand Colombia is a Pacific
state, an Andine and continental country; yet her chief ports and
arteries of communication lead northwards; and, until fifteen years ago,
she bestrode the Isthmus of Panamá. In 1903 that Isthmus passed under
the control of the United States; and Colombia, which formerly included
the province of Panamá, now practically has the United States for her
nearest neighbour.


_Origin of Divisions_

The connexion of these states with Europe dates from the first voyage of
Columbus across the Atlantic and from Cabral's voyage to Brazil. The
fabric of South America, as it stands today, was constructed in the main
during the marvellous half-century from 1492 to 1542. During that time
almost all the existing states took shape, and most of the present
capitals were founded. That work is chiefly connected with five great
names, Columbus, Balboa, Cortes, Magellan, Pizarro. Columbus and his
companions or immediate successors founded the Spanish empire on the
Antilles and the Spanish Main. Balboa sighted the South Sea, crossed the
Isthmus, and claimed that ocean and all its shores for the Crown of
Castile. Cortes established the empire of New Spain in North America.
Pizarro, starting southwards from Panamá, discovered the empire of the
Incas, shattered their power and set in its place a Spanish Viceroyalty.

The political divisions marked out at the conquest, which still subsist
in the main, were determined by the course of exploration and conquest.
When a separate condottiere hit upon a convenient site for a port and
founded a city either upon the sea-board or in some inland situation
accessible from the port, his work usually came to be recognised by the
creation of a separate government. These conquistadores showed judgment
and capacity in their choice of sites and in their marches inland, which
naturally followed the most convenient lines of communication. In this
way it came about that the political divisions in the Spanish empire
were mainly determined by natural economic causes, acting through the
rather haphazard experiments of practical men rather than through any
deliberate theory. These natural economic conditions are permanent in
character: they still persist, and they account in great part for the
continuance of the chief political divisions after the achievement of
independence and for the failure of ambitious schemes and aspirations
after union or federation. Thus the separate "kingdoms" and
"captaincies-general" of imperial Spain grew into states and are now
growing into nations. An illustration may be found in the Australian
colonies. In Australia, separate existence was at first an economic
necessity, demanded by the early colonists, owing to the distinct paths
of settlement and the distance between ports. Union, achieved later by
means of federation, was the work of artificial efforts of statesmanship
acting patiently through many difficulties.

The "Indies" were dependencies or possessions of Spain down to the
nineteenth century. Viceroys, captains-general and governors were sent
out from the Peninsula to rule in the capitals: corregidores held office
in the smaller towns[1]: audiencias, at once tribunals and councils,
were established in important centres. The course of trade was regulated
and was directed solely to the Peninsula. But the strength and the basis
of the fabric lay in the municipalities, which, although the
councillors' seats were purchased from the Crown or inherited from the
original purchasers, nevertheless offered some kind of public career to
the inhabitants and afforded the means of local public vitality.


_Emancipation_

When Napoleon stretched out his hand upon the Spanish royal family and
upon the Spanish kingdom, these municipalities everywhere became the
channels of patriotic protest and resistance to French pretensions.
Owing to the collapse of the monarchy, the unsympathetic and even
hostile attitude of successive popular authorities in Spain, and the
action of certain resolute leaders guiding the natural development of
local activities, these movements in America soon shaped towards
separation. In every capital the municipality formed the nucleus of a
junta or convention, which first assumed autonomy and then was forced by
the logic of events, and particularly by Spanish attempts at repression,
to claim republican independence. The resultant struggle was shared in
common by all. Buenos Aires, having worked out for herself a fairly
tranquil and facile revolution, sent troops under San Martín to aid
Chile and to invade the royalist strongholds of Peru. Bolívar, the
Caraqueño, liberator of the Spanish Main and of Quito, sent his soldiers
southwards through Peru. Finally, Venezuelans and Argentines, from
opposite ends of the continent, stood side by side in that battle on the
Andine heights of Ayacucho which ended the Spanish Viceroyalty of Peru
and the Spanish dominion on the continent. The peoples of South America,
through all subsequent divisions, have never quite forgotten that in
those days they made common cause and united in a combined effort to lay
the foundations of what might be a common destiny.

The emancipation of Mexico was a separate movement, which followed a
rather different course owing to the Indian origin of most of the
population. The issue was confused and hindered by early outbreaks,
which were in great part Indian insurrections and class conflicts not
directed to any clear aim and tainted by brigandage. An attempt was made
to cut the tangle of conflicting interests by the establishment of an
independent Mexican monarchy. In 1823 this was overthrown by a military
revolt, which started the Mexican republic on its stormy career. The
movement of separation from Spain inevitably embraced also the
Captaincy-general of Guatemala, which chose separation from Mexico, and
assumed the name of Central America--an artificial political term rather
than a geographical description. Its five provinces eventually separated
into the five republics of Central America.

Events in Brazil shaped themselves differently. Upon the French invasion
of Portugal in 1807-8, the Portuguese royal family migrated to Brazil
and made Rio for a time the capital of the Portuguese dominions. When
King John VI returned to Lisbon in 1821, he left as Regent of Brazil his
son Dom Pedro, who, a few months later, supported by Brazilian opinion,
threw off allegiance to his father and declared himself an independent
sovereign. Thus was established, or rather continued, that Brazilian
monarchy which subsisted down to 1889 and which secured to that country
tranquillity and a continuous though rather sleepy progress during the
stormy period through which Spanish America passed after the achievement
of independence.

For the long struggle had been mainly destructive. It had not only swept
away Spanish authority, but had blurred and in some parts had erased all
authority, all stability and order, had confused or obliterated whatever
had existed of political experience or tradition, and had left the
ignorant masses a prey to theorists and adventurers. The result was
that, for at least a generation after the achievement of independence,
most of the Spanish-American states were agitated by a turmoil of
multitudinous constitutional experiments, confused conflict and
destructive civil war, alternating with periods of rigorous and often
tyrannical personal despotism. These movements have been perhaps
unfairly judged in Europe. The young communities of Latin America,
wanting in political experience and torn by a long and unavoidable
struggle, were engaged in sweeping up the débris of their great
revolution.

The Republic of Chile in great part escaped that turmoil through the
establishment, after a brief period of conflict, of a fairly stable
aristocratic oligarchy of landed proprietors. Her three "revolutions"
have been landmarks rather than interruptions in her historical
development; for they were brief, decisive and conducive to a clearer
constitutional definition. Argentina, after the fall of the Dictator
Rosas in 1852, began to feel her way towards union and order, and may be
said to have achieved that end with the general acceptance of her
completed Federal Constitution in 1880. In the tropical republics
constitutional agreement was rendered more difficult by the mixture of
races, by geographical and climatic obstacles and by a comparative
remoteness from European influences. And in the Caribbean lands our own
generation has seen Presidential seats occupied by despots of the old
type, usually men of imperious and resolute character, dauntless courage
and unscrupulous indifference respecting means and methods, men
sometimes risen from the lowest station through ruthless force and
cunning. Indeed, Mexico, after a period of remarkable economic
development under the long autocracy of Porfirio Diaz, relapsed, upon
his fall in 1910-11, into the condition of a century ago.

Yet it may be generally said that the decade following 1870 was the
beginning of a new era for the Latin-American republics. The extension
of steam navigation, the building of railways, machinery applied to
agriculture, the influx of immigrants from Southern Europe and of
capital from Northern Europe, the growing demand in Europe for
foodstuffs and raw materials--all these things favoured, particularly in
the south temperate zone, a rapid and very remarkable economic
development which accompanied and aided a consolidation and closer
cohesion of the social and political fabric.

The outstanding fact in the recent history of Latin America and in her
present relations to the war is this economic development, this great
creation of new wealth during the past generation. It has been described
in many modern books upon the various republics, and can be studied in
Consular Reports, which read like romances. The Pampa has become one of
the chief granaries of the world; and Buenos Aires, the greatest city of
the southern hemisphere, is the centre of a railway system almost equal
in extent to that of the United Kingdom. Chile has been enriched by
nitrate and copper, Brazil by coffee and rubber. The High Andes have
become once more a treasure-house of mineral wealth: tropical hills,
valleys and coastal plains yield the riches of their vegetable products.

The date assigned above as the beginning of this great economic increase
is the date when the modern German Empire came into complete being. The
recent growth of Latin America coincides with the birth and growth of
the German industrial system. The organised energy, the patient
assiduity, the expanding productiveness of Germany found a great
opportunity in meeting the new needs of these rapidly growing countries.
Germans won a remarkable position in those lands and had marked out for
themselves a yet more ambitious future.

During the same period the United States, having decisively consolidated
the Union, has taken its place among the great Powers of the world. That
republic has also altered its economic character: for whereas previously
the inhabitants had been principally engaged in the internal development
of a vast territory and had been exporters mainly of foodstuffs and raw
materials, the growth of population has turned them into a commercial
people exporting manufactured goods. This dual development, political
and economic, has profoundly affected the relations of the United States
with Latin America.

Meantime the long-standing and intimate connexion between these lands
and the maritime countries of Western Europe has followed a natural and
uninterrupted course suffering no signal change except that, quickened
by a newly-awakened and more active interest on the part of Europe, it
has become closer, more sympathetic and more firmly based upon mutual
respect and understanding.

It is the object of the following pages to examine these matters with
reference to the Great War, and also to consider generally the bearings
of the war upon the development of the Latin-American countries.

FOOTNOTE:

[1] The reform of 1780-84, which established a quasi-French system of
intendentes and subdelegados, need not here be treated.




CHAPTER I

POLITICAL CURRENTS AND FORCES


In estimating the bearings of the great war upon these countries, it is
necessary to review certain political forces and currents of public
thought, which the Germans have attempted to divert to diplomatic or
bellicose ends. Since these influences date in part from the era of
independence or even from an earlier date, clearness of vision demands
some historical retrospect. When, upon the achievement of independence,
schemes of Latin-American or of South American union were found
impracticable, it was inevitable that frontier disputes and national
rivalries should lead to tension and sometimes to wars between states.
When it is remembered that every one of the ten South American republics
was divided from several neighbours by frontiers partly traversing
half-explored and imperfectly mapped regions, it is perhaps surprising
that such questions have been on the whole so amicably settled, and that
those which are still pending do not appear to be menacing or dangerous.
Owing to the paucity of population on the ill-defined and remote
interior frontiers, many of these questions did not become urgent until
the latter part of the nineteenth century, when the increasing
seriousness of political interests, the steadying influences of material
growth, and the pressure of outside opinion favoured peaceful
settlement, usually by means of arbitration. It would be possible to
compile a formidable list of such disputes. Most of them are questions
concerning historical and geographical delimitation, of great local
interest, but hardly of world-wide significance, although for a time the
world was alarmed lest the frontier dispute of Argentina and Chile
should excite a conflict between the two peoples engaged in the
development of the south temperate zone, the natural seat of an
important trans-Atlantic European civilisation.

A good example of the character of such frontier questions, of their
mode of settlement and of their possible exploitation for Teutonic
purposes is to be found in the long-protracted dispute concerning the
boundary between Venezuela and British Guiana--a dispute which only
became acute when gold was discovered in the region under debate. In
deference to external influence, the whole question was submitted to
arbitration, and was decided according to historical evidence concerning
the early course of settlement. This example is of further interest as
illustrating the German method of seizing opportunities. For, today,
German propaganda seeks to revive the bitterness of this episode, and
cultivates the favour of Venezuela by holding out the prospect of the
enlargement and enrichment of that republic through the absorption of
British Guiana and Northern Brazil; just as the neighbouring Republic of
Colombia is assured that German victory and the humiliation of the
United States will mean the return of Panamá to Colombia. It would be
unwise to dismiss such persuasive lures as too fantastic even for the
tropical atmosphere of the Spanish Main. Wherever opportunities occur,
similar efforts are made to turn to account national jealousies,
resentments and ambitions, and particularly to exacerbate the relations
between Brazil and Argentina, between Peru and Chile, between Mexico and
the United States.

The rivalry between the Portuguese and Spanish elements in South America
dates from early colonial times; and, as often happens in disputes
between members of the same family, has been perhaps more warmly felt
than the historic rivalry between Anglo-Saxon and Latin in America. The
feeling was kept alive after emancipation by a dispute concerning the
possession of the Banda Oriental (now the Uruguayan Republic), which
geographically belonged rather to the Portuguese or Brazilian system,
historically to the Spanish or Argentine system. During the eighteenth
century Spaniards and Portuguese had disputed its dominion in a series
of rival settlements, of wars and treaties, which finally left Spain in
possession. The struggle for emancipation reopened the question. For
three years (1825-28) Argentina and Brazil fought for possession. The
quarrel was adjusted, through the mediation of British diplomacy, by the
recognition of the Banda Oriental as a sovereign republic. Twenty years
later, Rosas, dictator of Buenos Aires, attempted to reverse this
decision by force of arms. His fall, partly brought about by Brazilian
intervention, settled the question. But it has left traces upon the
vivacious local sentiment of those young countries.

Again, the war which Chile waged in 1879-83 against Bolivia and Peru
ended in the occupation by Chile of Western Bolivia and also of the two
southern provinces of Peru. The ultimate possession of these two
provinces is still under discussion. Meantime, they remain in Chilian
hands; and, although a friendlier atmosphere now prevails, diplomatic
relations have never been resumed between Peru and Chile.

In these inter-state questions Germany seeks her opportunity for fishing
in troubled waters. German diplomacy and propaganda have striven to
reopen these old sores and to impede Latin-American consolidation by
setting state against state, and by fomenting or reviving latent
ambitions of hegemony or aggrandisement. Those who favour Germany are to
win great territorial rewards, at the expense of their misguided
neighbours, upon the achievement of that German victory which is
represented as certain. Particular efforts have been made to embroil
Argentina with her neighbours; a prominent feature of this programme is
the dismemberment of Brazil.

But the most important of these political movements and the one which
seemed to offer most promise to German schemes, is the long dispute
between Mexico and her northern neighbour. This is a part of that
process which since the beginning of the nineteenth century has
radically altered the map of the Caribbean lands and has shifted the
whole weight of political influence in that region. The chief effort of
Germany is to exploit the historic rivalry between Anglo-Saxon America
and Latin America, and to separate north from south by reviving the
smart of past incidents and by stirring up apprehensions as to the
future.

Here, again, it is necessary to glance back and summarise the chief
actual events of that history[2]. When Latin-American independence was
achieved, between 1820 and 1824, the United States had already become
the dominant power on the Mexican Gulf by the acquisition of Louisiana
and Florida, and in 1826 she exercised the privileges of that position
by prohibiting Mexican and Colombian designs for the emancipation of
Cuba. In 1845 Texas, which nine years before had seceded from Mexico,
was admitted to the Union, and in 1846-48 half the territory of the
Mexican Republic was transferred to the United States by a process of
conquest confirmed by purchase.

A pause in advance followed, until events showed that Isthmian control
was a national necessity to the United States. It suffices here to note
the conclusion of a long diplomatic history. In 1903 the United States,
having failed to obtain concessions of the desired kind from Colombia,
supported the province of Panamá in her secession from Colombia, and
speedily obtained from the newly formed republic a perpetual lease of
the canal zone, together with a practical protectorate over the Republic
of Panamá. The United States then proceeded to construct and fortify the
canal. She also procured from Nicaragua exclusive rights concerning the
construction of any canal through Nicaraguan territory, and erected in
fact a kind of protectorate over that republic.

Meanwhile, in the Antilles events were shaping towards control from the
north. A long-standing trouble concerning Cuba culminated in the
Spanish-American War of 1898, which brought about the annexation of
Porto Rico and the Philippines to the United States, while Cuba became
a republic under the tutelage of that Power. Five years later the United
States, in order to save the Dominican Republic from European pressure,
undertook the administration of the revenues of that state. In 1915 she
interposed to suppress a revolution in Haiti. Finally last year (1917)
she purchased from Denmark the islands of St Thomas and Santa Cruz.
Recent rumours as to a proposed further purchase--that of Dutch
Guiana--have been officially denied.

These advances have not gone beyond the Caribbean area, where
geographical conditions place the United States in a dominant position.
Her relations with the more distant southern countries, not touching the
Mediterranean Sea of the New World, fall into a different category and
do not directly concern the immediate topic.

But in the Caribbean area the United States has established a Sphere of
Influence, not indeed explicitly defined as such, but recognised in
effect by other governments and accepted by some at least of the
republics occupying that region. The events of the last twenty years
further indicate that the United States is undertaking the obligation,
usual in such cases, of imposing a "Pax Americana." As in similar
instances elsewhere, this Pax Americana has not quite clearly marked its
geographical limit, nor is it guided by any theoretical consistency, but
rather by the merits of the case and the test of immediate expediency in
each instance. Thus, whereas the United States enforces peace in Haiti
and definitely undertakes to maintain internal tranquillity in Cuba, she
has on the other hand withdrawn from interposition in Mexico. The
outside world has, on the whole, treated these matters as the concern of
the United States and respected the working of the Pax Americana.

Meanwhile, geographical proximity has favoured North American commerce,
and in recent years more than half the trade of Central America was
carried on with the United States.

It has been necessary to define the situation, because it is accepted by
the Allies, while it is at the same time jealously assailed by Germany.

For Germany, too, has won a remarkable position in the same region by
her economic efforts, which have also their political side. On the one
hand Central America is in a kind of dependence upon the United States:
on the other hand, it has been said, with obvious exaggeration, but with
some epigrammatic truth, that Guatemala before the war had become a
dependency of Germany in everything but the flag. German intelligence
and industry had seized the opportunity offered in the recent
development of a comparatively backward region. Peaceful penetration was
a work of methodical effort, of organised combination. German firms,
mostly of recent origin and sprung from small beginnings, always
preferred to import from Germany in order to favour German trade. Indeed
they were bound to do so by the terms of the credit granted to them by
German banks or Hamburg export firms for starting their business. Young
men came out from Germany--serious, plodding youths, working for small
pay, taking few pleasures and immersed in business. German retail
houses, either newly established or formed by the insinuation of Germans
into native families or native firms, worked in close contact with the
importing houses. The shipping companies worked with these latter and
with the Hamburg firms. The chief German achievement in this region was
the control of the coffee industry, which was acquired by the usual
German combination of admirable industry, patience and intelligence with
unscrupulous greed and cunning. Germans advanced money to the grateful
owners of coffee estates on such terms that the native owner in course
of time found himself bound hand and foot by ever-increasing debt; and
the properties usually passed into the hands of the exacting foreign
creditor, the former owner being often kept on as paid manager. In this
way, besides doing a good stroke of business for himself, the German
served Germany by increasing German interests in the country, providing
cargo for German ships and helping to secure for Hamburg the coffee
market of Europe. Every little advantage gained by an individual German
was reckoned as a national gain, as the starting-point for another
German step forwards. Nor was German advance confined to Guatemala: it
penetrated all Central America as well as Mexico and the Antillean
Republics, especially Haiti.

But the maritime war, the British blockade and Black List and, finally,
the participation of the United States have shaken the fabric thus
laboriously raised. German ingenuity had overreached itself. For it was
the insidious and cruel method of German land-grabbing in Guatemala
which more than anything determined that republic to declare war, in
order to escape from this ignominious economic dependence, this foreign
control of a national industry. For it would be difficult to define a
clear _casus belli_. But in the peculiar form of her declaration of war
she told the world under which system she chose to live. For in April
1918 Guatemala announced that thenceforth she occupied the same position
as the United States towards the European belligerents.

The iniquity of North American intervention in Nicaragua and the implied
menace to other states were insistently preached by Germany throughout
Central America; yet, a month later, Nicaragua also declared war,
proclaiming at the same time her solidarity with the United States and
with the other belligerent American Republics.

In Costa Rica the Germans represented the non-recognition by the United
States of President Tinoco, who owed his position to a _coup d'état_, as
a menacing insult to that Republic. Then, the same Germans intrigued to
overthrow Tinoco on account of a Government proposal to tax coffee
stored for future export. The upshot was that, in May 1918, Costa Rica
declared war. Two months later Haiti took the same decisive step, and
also Honduras.

The significance of these additions to the belligerent ranks is perhaps
hardly realised in Europe. Every one of them is a serious reverse in the
economic war which Germany is waging, and every one makes it more
difficult for Germans in America to keep up communication with Hamburg.

Indeed, the tale of recent events reads like a mere series of German
reverses, snatching away advantages already gained. In 1912, the treaty
for the American purchase of the Danish Antilles was all but complete,
when German influence in the Upper House of the Danish Parliament
prevented ratification and thwarted, for the time, the plans of the
United States. During the present war, the purchase was completed,
Germany being impotent. Again, Germany, having acquired a strong
position in Haiti, designed that the Haitian Republic should become a
Teutonised base of activity, repudiating the Pax Americana and
threatening the security of American sea-paths. The United States put
out a hand, and this highly-coloured vision faded away. Cuba, Panamá,
Guatemala, Nicaragua, Costa Rica, Haiti, Honduras--all of these in turn
struck at Germany through the declaration of war[3].

Yet Germany, beaten from point to point, still holds her ground in
Mexico. One of the curious side-scenes of the great war was the attempt
of the German Foreign Office to contrive an offensive alliance of Japan
and Mexico against the United States. Mexico was to be rewarded by the
recovery of Texas. This underhand plot against a neutral nation at peace
with Germany collapsed at its inception. Yet the present German menace
in Mexico is not to be despised. The rulers in the Mexican capital
exhibit an ostentatious cordiality towards Potsdam and sometimes an
almost petulant impatience towards the Allies. The German is the
favoured one among foreigners in the republic. Supported by the German
Legation, the German banks, and the countenance of the Mexican
authorities, Germans are strengthening their economic hold, particularly
through the acquisition of oil and mining properties. This advance has
its political side: for hopes seem to be entertained that a militant
power, inspired by Germany, may press upon the long southern frontier of
the United States, disturb her pacific influence in the Antilles,
threaten the security of her maritime routes, and interpose a barrier
between her and her scientific frontier on the Isthmus of Panamá. Such
schemes may sound fanciful, and no doubt in their entirety they are
impracticable. But it would be a mistake to regard Germany as powerless
or to undervalue her tenacious and intelligent opportunism. And, in any
case, the economic position demands attention.

A word may here be said about the German effort to hold up before the
eyes of all South America the spectre of the "Yankee peril." These
German efforts have not succeeded, as will be shown later. Yet it would
be rash optimism to assume that they have won no temporary success.
Correspondence published by the Washington authorities shows that the
German Minister at Buenos Aires succeeded in inducing the Argentine
Government to approach Chile and Bolivia with a view to a combination
against the United States--a scheme which, if carried through, might
have produced a split in the political system of the South American
Republics. A similar tendency appeared in President Irigoyen's attempt
to convoke a conference of neutral American states, an attempt which has
had no result except the dispatch of Mexican missions to Buenos Aires.
Such incidents cannot be ignored: they illustrate a movement which is
not quite effete.

From what has been said above it is obvious that German designs in
Central America and the Antilles are not quite recent in their
inception. The same is true of another field which for a generation past
has attracted German ambitions. The flourishing self-contained
German-speaking communities in Southern Brazil offered an attractive
goal to an empire which was feverishly building ships, pursuing a
maritime future and hunting for colonies. Here was a German colony in
existence and almost constituting already an _imperium in imperio_.
German emigrants, brought out by the Brazilian Emperors between 1825 and
1860, had by thrifty and intelligent industry done much to develop the
south; and their descendants--now estimated to number 400,000--inhabited
German towns, with German schools, newspapers and churches, where even
proclamations of the Brazilian Government were published in German.
Although not a product of the modern German Empire, this _Deutschtum im
Ausland_ has been studiously cultivated by that empire through every
possible agency, and especially by imperial grants to German schools,
whose pupils were taught that they were Germans owing a prior allegiance
to Germany. Some hope was entertained of carving a Teutonic state out of
Brazil, perhaps to form nominally, at all events for a time, an
independent republic. The disturbances in the south which followed the
establishment of the Brazilian Republic appeared to favour this chance,
which depended however on one condition, the countenance of Great
Britain in order to cope with the opposition of the United States. But
in any case the vigour and increase of the German element was to
dominate Southern Brazil and help to bring that region into moral
dependence upon Germany. That these designs were not viewed in South
America as wholly imaginative, is proved by a recent incident. The
Uruguayan Government, after revoking neutrality and seizing the interned
German ships, asked and obtained an assurance of Argentine support, in
case Uruguayan soil should be invaded by Germans from Southern Brazil.
It may be added that recent German commercial penetration has been
particularly active in Brazil.

Owing to their remoteness and lesser numbers, the German communities in
Southern Chile--whose first founders emigrated from Germany after the
troubles of 1848--did not invite such large political designs, although
there is reason to think that in the earlier part of the war, when a
German war fleet still kept the sea, the manifold activities of Germany
included some notion of obtaining a permanent footing in the Pacific.
These German-speaking settlements have been carefully cultivated, by the
same methods as those used in Brazil, to become a Germanising force in
Chile and a German outpost on the west coast. In 1916 a Chilian-German
League was established, to include all persons in Chile of German
origin and language, with the intention that the members should use
their influence as Chilian citizens, especially at election time, on
behalf of German interests.

Another influence which Germany strives to turn to account is the recent
movement represented by the _Unión Ibero-Americana_, which seeks to draw
together Spain and the Spanish-American republics. The German efforts to
give a Teutonic tinge to the present Spanish movement of national
revival look also towards Latin America, in the hope that friendship
with Spain may tell against French and North American influence; and
attempts are being made to exploit for that purpose the Ibero-American
celebration which is to be held in Madrid in October, 1918.

Lastly, in estimating political forces which have to be reckoned as
factors in the conflict, some mention should be made of the very warm
sentiment towards France which has prevailed for generations among
educated South Americans--a sentiment which passes the bounds of mere
private or even semi-official relations. This feeling is not universal,
and would hardly be admitted in clerical and military circles. But it is
sufficiently strong and general to be remotely compared to the sentiment
which a Greek ἀποικία usually entertained towards the mother-city.
French thought permeates the work of Latin-American historians and
political writers. French example and theory mould the form and the
action of governments. Paris is felt to be the capital and the centre of
inspiration for Latin civilisation. The debt of South America to France
has been generously, and indeed affectionately, avowed by a succession
of Argentine writers. A recent German semi-official utterance openly
admits and deplores the historic attachment of South America to France.
This attitude towards France can hardly fail to have some public weight;
and there is no doubt that the course pursued by Brazil has been partly
inspired by love of France.

FOOTNOTES:

[2] For the sake of brevity and clear relation to the present topic,
this history is not here examined with reference to any theory or
doctrine of policy. In order to explain the present position, the
salient facts only are given, but not the comments and explanations of
statesmen, nor the diplomatic passages leading to these events. One may
digress for a moment to point out that a sufficient interpretation of
these events is to be found in the natural expansion of a vigorous
growing people. In the process of "winning the wilderness and conquering
the continent" the United States found that a considerable part of the
field was in nominal possession of those who were doing little to use or
civilise it. These claims, which obstructed progress, were successively
disposed of. Nor has it been found possible to limit that advance to
certain indispensable acquisitions of territory. National security has
demanded varying degrees of control over neighbouring peoples of
inferior development. The process finds many historical parallels: and
it is an intensely practical, not a theoretic, matter.

[3] It may be pointed out that for nearly seventy years the United
States has acquired no territory from any Latin-American republic,
except the perpetual lease of the canal zone, which was freely granted
on most profitable conditions by the Republic of Panamá. Cuba and Panamá
owe their separate existence, together with an unexampled prosperity and
internal tranquillity, to the United States. In Nicaragua and Santo
Domingo the great material benefits of interposition seem to outweigh
sentimental objections. The financial obligations of Nicaragua have been
adjusted through the help of the United States; and it may perhaps be
felt that improved public solvency, material prosperity and internal
security, though effected through outside aid, enhance instead of
diminishing the national dignity.




CHAPTER II

THE GERMAN OUTLOOK ON LATIN AMERICA


"South America is the special theatre and object of German commercial
industry." This emphatic declaration--reiterated in various forms by
other German authorities--is the theme treated by Professor Gast,
Director of the German South American Institute at Aix-la-Chapelle, in a
pamphlet entitled _Deutschland und Süd-Amerika_, which may be regarded
as a semi-official exposition of German objects and opportunities. The
pamphlet appeared in the latter part of 1915. The events which have
since occurred, however damaging they may be to German hopes, do not
affect the views expressed. Since this advice from a German authority to
Germans is a frank revelation of German views, it seems worth giving a
very brief abstract of the main points, which the writer elaborates at
great length, though he does not enter upon details of business method.

"The German Press," says Professor Gast, "has never published so much
about Latin America as during this war. This proves the importance of
German relations there and the need of clear ideas concerning them. An
economic competition, intense beyond all example, has sprung up
concerning Latin America. The chief feature is the 'Financial Offensive'
of the United States. The present grouping of competitors is accidental
and false. The natural conflict is between the United States on the one
side, and on the other side all industrial and exporting peoples,
including Japan. The United States, the most dangerous competitor, is
handicapped by the higher cost of production in North America and by the
want of that facility of adaptation to customers' needs in which Germany
excels. Yet the war has revealed the weakness of German reputation.
Everywhere the prevailing strain is antipathy to Germany. It is the duty
of Germans to put aside resentment and to strengthen their economic
position. For trade with the two Americas is the chief source of
prosperity for modern German commerce, particularly that of Hamburg. And
after the war this trans-Oceanic trade will be a matter of yet more
urgent national importance."

This general survey is followed by an examination of special
opportunities open to Germans. "Germany has not the many-sided relations
with Latin America possessed by the Latin peoples of Europe, nor the
politico-geographical advantages of the United States, nor the strong
capitalist position of Great Britain. She must make the most of what she
does possess. Her main asset is the German in South America. Every
German abroad means the investment of interest-bearing capital for
German cultural expansion. Two things are required of him, to win esteem
by good work and to place his personal influence at the disposal of
German national ends. The compact German communities in Brazil and in
Southern Chile should be supported and organised from home, but not
obtrusively, lest local feeling be aroused. They may perhaps serve
Germany best by a partial mingling with the native population, so as to
spread German culture and the taste for German goods. But, everywhere,
all individual Germans are Germanising agents. The German merchant
particularly is the missionary of cultural and political influence. So
also the German soldier, particularly the German officers employed as
instructors in Chile and Argentina. Most South American officers feel a
professional sympathy for Germany. Hence spring useful personal
friendships: to foster and enlarge these is an urgent duty. Germans
exercise other professions which facilitate the patriotic diffusion of
German culture. Such are physicians, who find peculiar opportunities in
their intimate relations with families in their homes; the clergy, both
Protestant and Roman Catholic; teachers, whose proved idealism is an
admirable equipment for the spread of German culture; scientific men,
journalists, surveyors, geologists, professors in training colleges. If
possible they should work in combination, as they do in the German
Scientific Club of Buenos Aires. Every one of them must use every
professional opportunity and every item of personal influence and
private friendship for the advantage of Germany.

"A knowledge of German culture must be spread by a systematic
educational movement. But this must be done tactfully. The German's
propensity to foreign studies will aid him. He must equip himself by
assimilating Latin culture, must use his knowledge of French culture,
must oppose French influence by encouraging Spanish culture. His object
is to catch souls; and, next to financial strength, the first necessity
is tact."

Two points stand out in this very candid statement. First, every German
abroad is an item in the national balance-sheet; he must earn interest.
The intimacy between the pastor and his flock, the physician's
intercourse with his patient, are set down on the credit side of the
national profit-and-loss account. Secondly, the most profitable method
is a liberal education. There is something whimsical in the combination
of inhuman material calculation with humanising influences, and one may
smile at the heavy solemnity of the suggestion that the German will find
it pay to acquire tact and to Latinise himself for outside intercourse.
But the suggestion should not be dismissed as absurd. Whatever can be
done by effort, study, and will-power the German will do. He is training
himself to be a more formidable competitor than ever in the economic
arena.

Indeed, the pamphlet is valuable, not only as a hint for the future, but
also as an avowal of methods which are already at work. One of these is
a deliberate system of politic and profitable marriages. German clerks
receive promotion only on condition that they marry native girls and
establish homes in the country. This policy has been so steadily pursued
that everywhere German business men have entered Latin-American families
and exercise a Teutonising influence. Through marriage also, accompanied
by skilled and profitable management, Germans acquire control of
property and of trading concerns. Again, owing to their reputation for
expert efficiency and scientific competence, Germans fill many posts of
influence and trust in universities, scientific institutions and
government departments. Argentina is an example. In the National
University Germans control the engineering and chemical sections, where
their pupils are trained to use German apparatus and methods. German
curators in the Geological Museum receive early information as to any
discoveries of minerals or oil. Germans employed as experts in the
public service learn details of any public works proposed by the
government or the municipalities. Reports on such schemes pass through
their hands and, since estimates are not carefully checked, they are
thus able to favour German trade at the expense of the Argentine
tax-payer.

In every city the German _Verein_ unites the German community, so that
Germans may avoid competition and may co-operate with one another and
with Germans in the Fatherland. The bank and the merchant work in close
combination and have at their disposal all the information gathered by
German employees in other banks and in business firms. The German has
been quick to anticipate others in occupying new ground: for example, in
the remote but vast and productive region of Eastern Bolivia, watered by
the three great navigable affluents of the Madeira, a region which is
just beginning to awake to the promise of a great future, the German
trader hitherto has scarcely had a competitor. Again, the German has won
predominance in the electrical and chemical industries by applying his
practical scientific aptitude to the supply of new wants. Lastly, the
German is distinguished by close attention to detail and adaptation to
local needs.

Yet Germans note and deplore "a constant strain of antipathy to Germany,
a wave of anti-German hate." The remedies suggested are: first, a more
efficient German service of news, and secondly, "a systematic cultural
activity, conducted with push and comprehensive inspiration."

What is being done in Germany to realise these methods? First may be
mentioned the various associations for extending German influence abroad
and binding to the Fatherland all Germans living abroad, whether in
South America or elsewhere. Such are the Pan-German League, the German
Navy League, the League for Germanism abroad, the League for German Art
abroad, the School League which gives support to German schools outside
Germany, the German rifle club, with its headquarters in Nuremberg, to
which rifle clubs abroad are affiliated, and, lastly, the Foreign
Museum, recently founded under the highest official patronage, which
arranges economic exhibitions in various German cities. Although these
associations were not founded particularly for Latin-American objects,
their present efforts are particularly bent in that direction, as the
Pan-German League lately declared. But, besides these comprehensive
agencies, Germany possesses three institutions specially devoted to
Latin-American purposes. One of these existed before the war, namely the
German South American Institute at Aix-la-Chapelle, to which the
Imperial and Prussian authorities have entrusted "the cultivation of
scientific and artistic relations with South and Central America on the
lines of a general cultural policy." Its objects are to draw together
German and South American students, to maintain a South American library
and information bureau, to encourage in Germany the study of South
American matters by prize essays, travelling scholarships and similar
methods, and to use every means of making German intellectual work known
to South Americans. The Institute publishes a Spanish monthly
illustrated periodical, _El Mensajero de Ultramar_, and also a
Portuguese version, _O Transatlántico_. These papers are well calculated
to uphold German culture across the Atlantic: they are admirably got up
and aim at presenting an attractive picture of German life and
institutions, dwelling particularly on the steady continuance of German
industry, artistic production and even sport during the war. The
Institute also publishes a German periodical, strictly business-like and
containing only technical illustrations, for the purpose of keeping
Germans informed on Latin-American affairs.

The Institute at Aix, although its ultimate object is mainly economic,
leaves business methods and matters of immediate economic concern to
other agencies. Before the war there flourished already in Germany a
League for Argentina and one for Brazil. In 1915 these two Associations
combined in order to form a German Economic League for South and Central
America. A prospectus was issued and a meeting was held in Berlin under
the presidency of Herr Dernburg, who spoke of the coming economic
struggle and pointed out that German trade, except in the electrical
industry, was not supported by large capital investments such as their
rivals possessed. The dependence of South America on other industrial
nations, owing to want of coal and iron, would facilitate German
investment, to supply this defect. Germans had failed to make friends
through not understanding the psychology of South Americans. German
strength and practical energy must avoid arrogant pedagogic ways and
must make their way through a tactful and sympathetic propaganda.

At this meeting the league was inaugurated with 120 members. Very soon
it numbered 1000. Among the associations which figure as members are the
German Industrialist League, the German Mercantile League, the Berlin
Chamber of Commerce, the South German Export League, the League for
Germanism abroad, the Society for German Art abroad. The three great
banks, known in Germany as the three D.'s, are members, so also the
great Shipping Companies; also newspaper and publishing firms; also many
of the great industrial syndicates. A notable feature in the work of the
league is the maintenance of a club in Berlin where business men and
other travellers from South America are welcomed. A great point is made
of this work of personal cultivation. The object is to make by
hospitable attentions a Germanophil convert of every Latin-American
visitor to Berlin and send him back across the Atlantic a missionary for
German culture and German business. But the principal aim of the league
is to unite all Germans who have any business interests in any part of
Latin America, so as to pool together their knowledge, their resources,
and their efforts. In this economic war the Germans move, as it were, in
mass formation. Branches of the league were speedily established in
every one of the twenty-one American republics, and these branches
co-operate actively with the parent society at home in the furtherance
of German influence and economic advantage.

A third institution, the Hamburg Ibero-American League, has been formed
in the metropolis of German Latin-American trade. Already before the
war, besides the usual trading organisations of a great port, Hamburg
possessed a Technical High School which is practically a university of
trade and industry; a Seminary for Romance languages and culture, which
maintains a South American library; and a singularly complete bureau of
information concerning all over-sea countries, which is known as the
Hamburg Colonial Institute.

But Hamburg still felt a want, which was supplied by the formation of
the Hamburg Ibero-American League. Its objects are: (1) in Spain and
Spanish America: to spread a knowledge of Germany's resources and to
cultivate friendly relations in government departments, semi-official
institutions and social, literary and scientific circles. To circulate
the illustrated weekly _El Heraldo de Hamburgo_, also pamphlets in
Spanish and Portuguese; to station confidential emissaries in
appropriate posts; to encourage interchange of visits and to inculcate
the advantages which Germany offers as a training-ground for every
calling. (2) In Hamburg: to prepare for intercourse after the war by
arranging lectures and by organising language courses in German, Spanish
and Portuguese, and particularly to establish a _Centro Ibero-Americano_
with club, reading room, and information bureau, a house fully equipped
for the hospitable reception of travellers from the Peninsula and from
South America. The league is to consist of twenty-two sections, one for
Spain, one for Portugal, one for each of the twenty Latin-American
republics, in order that all who have interests in any part of the
Ibero-American world may support one another.

A fourth association, the Germanic League for South America, has been
formed more recently for the purpose of uniting together persons of
German speech and origin in Latin America and preserving their Germanic
character, particularly by means of German schools. This institution has
a special significance just at the time when the Brazilian Government
has determined that all its citizens shall be Brazilians and nothing
else.

The three leagues which have their headquarters in Berlin, Hamburg and
Aix-la-Chapelle have been in active movement for some time, and there is
evidence from South America that they do their work in a thorough and
effective fashion and have won considerable success, particularly
through cultivating the friendship of South American visitors to
Germany.

But in estimating German designs, we must look beyond these German
leagues, which are merely an incidental part of German economic
organisation. That subject far transcends the present topic, but
embraces it so closely that the main outlines may be indicated. Most of
the German industries are consolidated into cartels or syndicates in
such a way as to eliminate competition, regulate prices and output,
distribute risks or losses, facilitate the export of surplus products,
and apportion business between the members of the cartel. The whole body
of industrialists is united in league; merchants or exporters are
similarly united; a small group of great banks, practically constituting
one power, manages the financial side of the national industry and
commerce with a singular mixture of daring and judgment, guided by a
wonderfully complete enquiry system, a veritable international secret
service; the great shipping companies, which coalesce more and more into
a single huge national concern, work in close co-operation with
organised industry and organised trade; railway transport is managed by
the state so as to dovetail into the same machine: and the whole forms
altogether a carefully constructed system of co-operation, cohesion and
united action. That organisation has not fallen into abeyance during the
present war. On the contrary, month by month it is being perfected,
rounded off. Lastly, Germany has appointed, as it were, an economic
headquarters staff, a small group of expert business men who for two
years past have been devoting themselves to the working out of means for
transferring Germany from a war basis to a peace basis with the least
possible disturbance and delay. This higher command has its hand upon
the levers of the whole machine, which, upon the conclusion of peace, is
at once to resume with redoubled energy its interrupted task, industrial
and commercial recovery, and particularly the economic conquest of Latin
America.

In order that we may know what Germany is doing, these German
organisations have been noted here. It would be impertinent, in both
senses of the word, to compare or to criticise British methods. The
problem of British reorganisation is being studied by experts and worked
out by those in authority, and it is constantly expounded in official
publications. But, without attempting to give individual opinions, one
may quote some of authority.

"Great nations do not imitate." We may learn much in detail from the
Germans; but Englishmen could not adopt the German system unless by
first turning themselves into Prussians. Our people would never submit
to Prussian methods of state control. Moreover all British experience
shows that in this country such control would be disastrous. Yet
competent authorities agree that immediate organisation is a necessity.
It cannot be beyond the wit of Englishmen to devise means whereby
British individual enterprise, common sense and self-reliance may work
through methods of systematic organisation, combination, united action.
From the friends of Britain everywhere comes the same warning. It is
most appropriate to conclude with one uttered by a South American of
unimpeachable authority, Don Pedro Cosio, former Uruguayan Finance
Minister, who recently represented the Republic of Uruguay in this
country. In a report to his government on the organisation of labour in
the United Kingdom he writes, "The nation which is the first to organise
its industry for the commercial campaign will be the one which will
occupy the forefront in foreign markets."




CHAPTER III

THE ECONOMIC WAR AND ITS PROPAGANDA


"Economic War":--This reiterated German phrase is not mere metaphor. The
Germans pursued in peace the operations of war. To them commerce meant
not merely the pursuit of trade in peaceful rivalry with others, but a
sustained effort to defeat and oust rivals and reduce to economic
subjugation the lands penetrated. By plunging into open war, which was
meant to continue and to confirm that process, the Germans have risked
their previous gains. Their own weapons are turned against them. The
economic character of the actual war and the efficacy of the economic
weapon in the hands of the Allies become more and more evident. In the
early months of the war this weapon was not wielded with thorough
decision, and Germans beyond the Atlantic were able to carry on
considerable European trade. But today the German merchant is striving
to defend, against an overwhelming weight of maritime pressure, the
ground which he had won through a generation of laborious and patient
effort.

This economic struggle covers all the shores of all the Oceans. Its
Latin-American phase has a special interest owing to the remarkable
position attained in those lands by the Germans, the high value which
they attach to that position, and their special efforts to maintain it
under present difficulties. The most varied ingenuity is called into
play to circumvent the barrier which now cuts off those countries from
Germany. Present risks and losses are viewed as part of the inevitable
waste of war, as an outlay deliberately incurred in the all-important
task of holding open the gate through which, upon the conclusion of
peace, the fruits of German industry are at once to pour in an
irresistible stream, in exchange for those raw materials which are
urgently needed to feed the industrial life of Germany after the war.
This is the constant preoccupation of German business circles--the need
of raw materials. And this is the reason why Latin America, the great
source of raw materials, is courted with eager hope and anxious
apprehension.

It is noticeable that a very large part of the cargoes condemned by the
British Prize Court, as actually intended for the enemy though consigned
to other pretended destinations, consists of goods from Latin America.
For example, in August 1917 the Court condemned quantities of coffee,
seized on a score of neutral steamers and ostensibly consigned to
Scandinavian and Dutch merchants, but in fact shipped by a German firm
at Santos for the parent house in Hamburg. Two months later, it was
stated in court that nearly £400,000 worth of wool, shipped from Buenos
Aires to the Swedish Army Administration at Gothenburg, had been seized
by the British as being in fact destined for Leipzig. At the same time
the Court condemned a number of manufactured rubber articles which had
been found concealed in a passenger's clothing. On a later occasion,
coffee and cocoa valued at nearly £200,000 were condemned, being part
cargo of a Swedish ship bound from California to Gothenburg. They were
consigned by a new and insignificant firm in San Francisco to various
persons in Scandinavia, but were in fact on their way from Guatemala to
Hamburg through Sweden.

The elaborate webs spun by German traders and revealed by intercepted
correspondence were exposed in the Prize Court. Their methods were to
find persons in neutral countries as nominal consignees, to act as
intermediaries for getting the goods to Germany; to set up bogus
companies for the same purpose; to use false names, or names of persons
having no genuine interest in the consignment, and to manufacture false
documents in order to give the appearance of neutral business. This was
done to evade capture by deceiving the belligerent searchers. In some
instances these methods succeeded. Quantities of coffee, consigned to
Scandinavia, managed to elude the allied warships and reach Hamburg.

These are cases of import into Germany. The reverse process, export from
Germany through neutrals, follows similar lines. German goods, falsely
labelled and described as Swiss or Dutch or Scandinavian manufactures,
have found their way across the Atlantic in neutral ships.

The Post Office has also served as a channel of secret trade. Pictures
in the Press have exhibited the odd ingenuity of these devices: how
coffee from Brazil to Germany was found concealed in rolls of
newspapers, and how thin slabs of rubber were sent by post as
photographs, also how quantities of jewellery have been despatched from
Germany for South America in letters and in bundles of samples or
journals. Goods so sent from Germany through the Post Office are mostly
such as combine small bulk with high value--especially drugs and
jewellery.

These partial examples, although each instance may seem small enough,
indicate collectively a good deal of enemy trade which has found devious
routes under stress of war. These manœuvres may seem at first sight
merely trivial curiosities or at all events to have no more than
ephemeral importance, since they were improvised to overcome temporary
obstacles. But, apart from their intrinsic interest as episodes in one
phase of the war and as evidence of the efficacy of Sea Power, these
devices merit practical attention in view of proposals to fasten
economic fetters upon Germany by the terms of peace, and in view of the
odium which may tell against German commerce for years to come. German
business men are preparing to meet these difficulties by continuing the
method of exporting through neutral agents, and are proposing in some
cases to transport to a neutral country the work of completing
manufacture, in order that goods so produced may appear to be
indisputably of non-German origin; and the Foreign Trade Department at
Berlin has advised German merchants to employ, for some years after the
war, travellers and agents who can pass as French or English. It would
be unwise to underrate any instance of German inventive persistency.

Before the United States came into the war, that country was the channel
of much German trade with Latin America. That road is now closed. The
United States Government has gone further. It refuses coal in North
American ports to ships proceeding from South America to neutral
countries in Europe, unless the innocence of the cargo can be
conclusively proved. This regulation shows that the United States
authorities have knowledge that the ultimate destination of much South
American cargo, particularly from the Argentine Republic, has been
Germany. The blockade becomes more stringent through the co-operation of
the United States and of Brazil, and through the action of the statutory
list of "persons and firms with whom persons and firms in the United
Kingdom are prohibited from trading." British commerce is a big and
living thing, and the prohibition hits very hard any firm placed on this
Black List. One finds here not only Teutonic names, but also
innocent-sounding Latin names: for if a Latin-American is found to be
acting as agent or cloak for a German trader, he finds himself pilloried
on the Black List beside the German. There are obvious ways of evasion.
The name of a clerk or door-keeper or a lady type-writer may appear as
consignee. A varied ingenuity has to be met by constant watchfulness,
and the list is regularly altered and kept up to date. The Black List
has been much criticised for omissions, which are sometimes due to
motives of expediency. But the bitter complaints about its injustice are
unsolicited testimony to its efficacy. A striking example of its working
was manifested in September 1917. After the outbreak of war, such of the
Chilian nitrate works as were owned by Germans were unable to sell their
nitrate or even to obtain jute bags, the supply of which is in British
control. The unsold stocks went on accumulating, until one by one the
German nitrate works were compelled to close down. Long negotiations
between Santiago and Berlin found at last a remedy for this waste. It
was agreed that the large deposits of Chilian gold in Germany should be
set against the German-owned nitrate in Chile. The Chilian Government
bought the nitrate, and paid the German owners by drafts on Berlin,
which were met out of the Chilian money deposits in Germany. Thus
Germany received Chilian gold in exchange for the inaccessible nitrate,
while the Chilian Government received nitrate in exchange for its
inaccessible gold. Chile then sold the nitrate for American gold to the
largest manufacturer of explosives in the United States. Thus, one
result of the blockade and the statutory list is that this German
nitrate goes to make munitions, to be hurled at the Germans on the
French front from American guns. The German Government, by sanctioning
this sale of explosive material to its enemies, gave evidence of its
earnest desire to stand well with Chile. On the other hand, Germany was
impelled to this agreement in order to obviate grave financial loss to
Germans and especially to save a big Hamburg firm from disaster.

The active entry of Brazil into the war has in great part superseded the
action of the statutory list in that country: for Brazil has taken
decisive measures towards Germans within her borders. All enemy
enterprises are in the hands of government receivers. All contracts for
purchase of coffee or other Brazilian products by Germans are null and
void; and in cases where payments had been made by the German
purchasers, all such payments must be handed over to the official
receivers. The United States also publishes a Black List of firms with
whom her citizens are forbidden to deal. Evasion of allied watchfulness
becomes more and more difficult: yet ingenious, and sometimes successful
efforts are made to find loopholes in the wall of the blockade.

There are now in Buenos Aires nearly 150 Turkish firms--Levantines of
every denomination, Mohammedan, Christian, Jewish. Some of these are
long-established and well-reputed houses. But most of them have sprung
up during the war. Some of them, starting with exiguous capital, have
made large fortunes in a year or two of trade. This has been done by
supplying to German black-listed firms goods imported direct from
Manchester and Bradford. Through the close co-operation of the German
bank with German trade, these Syrians and Armenians are enabled, by the
Germans standing behind them, to pay cash against documents in place of
the usual sixty to ninety days' credit, and thus have a great advantage
over the British or allied trader. The British authorities now permit
export only to certain registered Turkish firms. The restriction does
something to limit the abuse of this kind of trading.

Besides these ingenious efforts to keep open communication with Europe,
there is another side of the commercial war. In the neutral states of
Latin America the German business man is as ubiquitous and energetic as
ever, nay more so as he has greater difficulties to contend with. So far
as he can, he sells from accumulated stocks of German goods, for the
German importing houses before the war had gathered great stocks,
especially in Chile. Where this resource fails, he repairs his stock by
buying anywhere. Up to April 1917 he bought largely in New York. Now he
buys where he can and what he can--American goods, French goods, British
goods--anything to hold the market until the ocean shall be free once
more to German keels carrying German goods.

From the Argentine Republic 6000 young Englishmen came home to serve
Britain on the fields of France. The young German would have found
difficulty in getting home, even had he wished to do so; so for the most
part he stayed in the River Plate. Other Germans have been released from
military service and sent out as commercial travellers; for the German
Government regards this too as National War Service. Thus today there
are three German commercial men in the River Plate to one Englishman.
The resources and confidence of the German traders are surprising. They
have bought great quantities of wool in the River Plate--not so much
indeed as is generally supposed; for German emissaries, in order to
force up the price of wool to the Allies, have methodically made
specious but fictitious offers of high prices to sheep-farmers all over
the Argentine Republic. Yet, even so, German traders hold large
quantities both of wool and of grain. These have been purchased partly
for selling at enhanced prices on the spot, but principally with a view
to after-war trade and the supply of raw materials to Germany. These
purchases are proof of firm belief in the future. Moreover, both in
Chile and in Argentina the interned German ships await their after-war
cargoes for Europe. And when the Chilian or Argentine asks whether the
German will be free to use these ships when peace comes, the Englishman
cannot reply. The ships are there, proof of Germany's future power to
trade.

And the Germans are active not only in trade. They have learnt from
British example that the road to business in Latin America is the
investment of capital. And, strange as it may seem, the German has
peculiar opportunities of investment at the present time. Such limited
trade as can be carried on yields great profits. There is difficulty
about remitting funds to Germany; and in any case "victory war loans"
and other investments in the Fatherland may seem less attractive than
investments in those Latin-American lands which look forward to rapidly
expanding prosperity after the war. Accordingly, the German merchant is
not only buying raw materials; he is also taking a share in the movement
of home manufactures which now offers peculiar opportunities to foreign
enterprise. Moreover, German firms in Buenos Aires have invested largely
in short loans to the Argentine Government. Besides these private
investments, which, like all German activities, have their official
side, loans have been repeatedly pressed on the Argentine Government,
ostensibly by neutral financiers (first in the United States and
afterwards in Spain) but in fact by Germany, evidently for immediate
political as well as for ulterior economic objects. These offers have
been declined. A German loan openly offered to Uruguay has also been
refused.

Obviously, the whole story of German war-efforts in Latin America cannot
yet be told. Enough has been said to indicate the character and the
intensity of those efforts. For this far western front Germany has
mobilised a business army, specially trained for the nature of the
country and for the kind of operations wherein it is to be engaged.
These efforts and aspirations are best illustrated by a recent utterance
from the Hamburg branch of the League for Germanism abroad:--"We should
like to insist that South America, the main field of our activity for
many years past, constitutes a great sphere. Wide areas, with great
possibilities of development, but little cultivated hitherto, are
waiting to be opened up. It must be our business to employ here all our
strength in order to retain and to make useful to ourselves these
countries with their markets and raw materials. What we have to do is to
_arm for the Peace_ and to collect money, in order to be able
immediately to act with energy--with our whole strength and with
adequate resources."

       *       *       *       *       *

In this "arming for the Peace" there is one weapon which demands special
mention, namely the influencing of opinion by printed propaganda.

The German mobilisation of the Press is a vast business controlled by
the State. Upon the outbreak of war this organisation undertook the
special work of war propaganda through two newly formed departments: (1)
Press Office for influencing neutrals, (2) News Service for Spanish- and
Portuguese-speaking countries. This institution of a special
Ibero-American service proves the prominence given to the work in the
Spanish- and Portuguese-speaking lands. The last words obviously include
the Peninsula as well as Latin America. Nor can the propaganda carried
on in Spain be dissociated from that in Spanish America. "Spain is the
way to South America," writes a Spaniard discussing this very point. The
popular illustrated Spanish prints _A.B.C._ and _Blanco y Negro_, which
carry on a vehement Germanophil propaganda, are carefully perused, as
coming from "home," by Spanish emigrants throughout Latin America, who
thus become, half unwittingly, disseminators of German views and of
belief in German victory.

For the first object of this propaganda is to represent Germany as
invincible in war. This military propaganda is an essential part of
economic efforts. The Germans hold up a picture of German sagacity,
system, thoroughness, efficiency. They desire to impress as well as to
persuade. They know the effect produced by their victory in 1870. Credit
and confidence are the greatest of commercial assets; and in this case
economic credit is to rest upon belief in military strength.

In South America, as in Spain, the method is to capture the press, and
so disseminate German war-news, pro-German articles, photographs and
cartoons. But it was not enough to control or inspire existing
newspapers. In many capitals the Germans started new journals, printed
in the vernacular. Naturally, the chief effort was made in Buenos Aires.
Early in the war, a German organ, _La Unión_, was founded, in order
that the Porteño, as he walked the street or travelled by train or
tramway, might have the German case daily and forcibly presented to him.
Throughout Latin America, a dozen or more of newspapers have been thus
founded for propaganda purposes, some of them illustrated by effective
cartoons. The strangest examples of this journalistic campaign are two
Turkish newspapers, _La Bandera Otomana_ of Buenos Aires and _O Otomano_
of São Pãolo, which urge the cause of the Central Powers among Orientals
in those countries. Besides these purely German efforts, a host of
newspapers, many of them the local journals of country towns, serve the
German cause throughout Latin America, the newspaper offices sometimes
acting as distributing agencies for periodicals printed in Germany in
the Spanish tongue.

For, besides German and Germanophil periodicals published in America,
others are produced in Germany for circulation in those countries. The
number and the excellent quality of these Spanish productions of the
German printing-press are remarkable. _La Revista de la Exportación
Alemana_ is a most effective organ for German business, exhibiting side
by side, in pictures and letter-press, triumphs in the field and
triumphs of industry. The monthly _Mensajero de Ultramar_ and the weekly
_Heraldo de Hamburgo_ have been already mentioned. Hamburg also produces
the well-known weekly picture-paper, _Welt in Bild_, with letter-press
in twelve languages. These well-written and well-printed newspapers are
widely circulated in Latin America in order to uphold the German cause.

In addition to these permanent publications, special war periodicals are
issued, every one of them a German trumpet. Not least of these is the
comic paper _La Guasa Internacional_, which holds up the Allies to
ridicule and abhorrence in cartoons, squibs and sketches. A diary of the
war with a review of political and military movements is given in the
illustrated monthly _Crónica de la Guerra_. Another chronicle is _La
Guerra Europea Mirada por un Sud-Americano_, a piece of war propaganda
written by a Latin-American soldier, Señor Guerrero, who was, until
recently, Peruvian military attaché at Berlin. But perhaps the most
effective of these war periodicals is _La Gran Guerra en cuadros_, which
presents, in a series of pictures, the war as meant to be seen by
neutral eyes. All these periodicals attribute economic blunders and
financial errors or weakness to the Allies, sometimes making adroit use
of British or French self-criticisms: on the other hand, they magnify
German economic strength and organisation. This main object appears in
an article on "After-war commercial relations between Spanish America
and Europe" published in _El Mensajero de Ultramar_, which argues that
Germany will suffer least of all the belligerents from the effects of
the war; and that afterwards she will be the best purchaser and also the
most capable provider for Latin America. Such is the reiterated refrain
of a host of periodical publications.

In addition to periodicals, Germany pours over the Spanish-and
Portuguese-speaking world a constant inundation of fly-leaves,
photographs, pamphlets, books and miscellaneous war literature,
preaching German strength, efficiency, humanity, and even the democratic
character of German institutions.

What is the result? Has German propaganda succeeded in moulding
Latin-American opinion concerning the war? Opinion in those countries
has been moved by an argument more potent than all the German
propaganda, and that is the German submarine. The German offers to South
America with one hand persuasive self-eulogies, while with the other
hand he sinks her unarmed trading ships and drowns her sailors.
Unrestricted submarine warfare and the barring of zones to navigation
have drawn Brazil, by successive steps, into active belligerency, and
have done much to bring about rupture of relations and declarations of
war by other Latin-American republics. Yet it would be a mistake to
conclude that German propaganda has entirely failed. The Germans
certainly think it worth while to continue it. The pavements of Buenos
Aires are sometimes ankle-deep with pro-neutrality and anti-ally
leaflets. But it is principally through the persistent and reiterated
voice of the newspaper press, aided by the unremitting personal efforts
of every German and every friend of Germany, that she wages this
secondary warfare, this strategy of moral influence, which mobilises
public opinion, diffuses impressions, colours events, creates an
atmosphere.

A circular was lately issued to the German League in Chile urging that,
if propaganda could delay the severance of diplomatic relations between
Chile and Germany, even for a few weeks, it would help Germany and her
allies to an extent of several millions, and cause damage to her enemies
to the same amount. As the situation becomes more critical for Germany,
her propaganda redoubles in intensity. "Public opinion," says Napoleon,
"is a force invisible, mysterious, irresistible." The Germans recognise
that force, and have done all that was in their power to sway it to
their side. German persuasiveness has not wholly failed. But in this war
of words one decisive word has yet to be spoken, and that word is
Victory.

Yet military victory is not the final word in the economic struggle nor
in the propaganda used in its support. The German South American
Institute urgently emphasises the need of a more thorough and more
stable system of German news supply: and official steps are now being
taken in Germany to consolidate and extend such a system, in order to
provide a permanent support of German influence in the future. The
present aim of her propaganda is not only to exhibit victories, but to
prepare for possible defeat, while representing Germany as morally
invincible and as able, in any event, not only to hold her own, but to
extend and strengthen her position.




CHAPTER IV

THE RECOGNITION OF LATIN AMERICA


It has been necessary to speak at some length of the direction taken by
German activities with regard to Latin America. In order to preserve due
perspective, something should be said about activities on the part of
others. For the German has no monopoly of intelligence and energy in
these matters. Indeed, the methods of the various German Leagues for
Latin America mentioned in the second chapter were prompted, in part at
least, by observation of what was being done elsewhere, particularly in
France and the United States: for all these matters are carefully
watched in Germany, and are described in minute detail in the
publications of those leagues.

An American historian remarks that Europe and the United States have
lately re-discovered Latin America; and a German observer describes
South America as the Fair Helen of the business world--her charms
admired and her favours sought by all industrial nations. These epigrams
point to a comparatively recent movement, which might be described as
the Recognition of Latin America. This is not a sudden new departure,
for relations between those countries and Europe have been continuous.
But, in the past, there has been much indifference and ignorance
regarding these matters, except among those directly concerned in them.
In recent years a fresh spirit has arisen, an enlivened interest and a
desire for better knowledge and more cordial intercourse. The movement
is natural and spontaneous rather than official. It owes little--at all
events in Europe--to governments and chanceries, although these
recognise its value and give it their countenance.

It was pointed out above that French thought and French example have
always exercised a profound influence on the Latin-American republics.
Until recently, this influence made itself felt without much conscious
observation or deliberate activity on the part of Frenchmen. Indeed,
there was sometimes a disposition, which was not unknown in England
also, to view the Latin-American in a satirical light. A changed
attitude in France--a desire for cordial and equal intercourse--took
definite shape in the formation of the Comité France-Amérique in 1906
under the presidency of M. Gabriel Hanotaux. The objects of this society
are to develop economic, intellectual and artistic relations between
France and the nations of the New World, to attract students and
travellers to France from the two Americas and welcome them cordially,
to encourage every means of making France and America known to one
another. The society soon numbered over 1000 members, and proceeded to
found branches in Latin-American capitals, as well as in the United
States and Canada. It publishes a monthly review entitled
_France-Amérique_, dealing with every branch of life in the two
Americas, and has formed a sub-section known as Ligue française de
propagande, to spread in America a knowledge of French education and
art, as well as French industrial products. The society has published a
number of books concerning the history and present conditions of
American countries.

The same year, 1906, saw the foundation of the Groupement des
Universités et grandes Écoles de France pour les relations avec
l'Amérique Latine. This academic association, though it does not ignore
the business side of foreign relations, is naturally more concerned with
educational and intellectual matters. Its activities appear in the
visits of French professors and lecturers to Latin-American capitals,
the reception of Latin-American students in France, the study of
Spanish-American history, literature and archaeology in French
Universities, and in one apparently trivial but very practical
detail--the reduction by one half of French Steamship Companies' fares
to Latin-American students visiting France.

The economic side of this French movement appears in the institution of
a "Latin-American week," a kind of festival for propaganda and
intercourse, to be celebrated annually in some great business centre of
France. The inaugural seven days' meeting was held at Lyons in December
1916. Sixty Latin-American delegates were present, and were met by 200
French delegates from Paris, among them leading men representing every
side of French life. The conference discussed every aspect of the
relations between France and Latin America, and the means of extending
and improving those relations.

The cordiality of intercourse finds its most pleasant manifestation in
the frequent visits to South America of distinguished Frenchmen--among
them have been Anatole France and Clemenceau--who carry messages of
sympathy across the Atlantic to crowded and enthusiastic gatherings in
Latin-American cities.

In the United States this double movement, intellectual and economic, is
still more marked. Latin-American history and economics are regularly
taught in the universities, and prizes are provided for essays on
historical works on those lands. Harvard University has a special
endowment for Latin-American studies, an Instructor in Latin-American
history and a South American Library of 10,000 volumes; and the
University, in order to encourage the entry of Latin-American students,
dispenses with the use of the English language in the Entrance
Examination in certain cases. The Jesuit traveller, Father Zahm, better
known by his pen-name of Mozans, has presented his South American
library to Notre Dame University, Indiana. The Rector of the Leland
Stanford Junior University places at the disposal of the University his
library of 7000 volumes on Brazil. Scholarships are granted in the
Universities to Latin-American women students. In the year 1913,
Latin-American students in American universities numbered 813. American
scientific missions are at work in Latin America, as well as missions of
teachers to study educational methods in those lands and to invite
return visits to the United States. One hears, moreover, of a
Spanish-American Athenæum at Washington, 2000 institutions teaching the
Spanish language, 1700 clubs formed for the study of Latin America, new
magazines dealing exclusively with those regions, Argentine men of
letters received with an honoured public welcome, an Inter-American
Round Table, founded by representative ladies of New York, who propose
to hold annual meetings of women, to take place successively in the
capitals of the American Republics.

This educational and social movement accompanies and supports a great
business effort directed towards Latin America. The latter has an
obvious bearing on the subject of Pan-Americanism, which is treated in a
later chapter: but it is convenient to indicate the facts here, as
forming part of a general movement of approach by other peoples towards
Latin America. The American business effort assumed concrete form at the
beginning of the war, when the United States Government invited the
Finance Ministers and leading bankers of all the American Republics to a
Financial conference at Washington. All but Mexico and Haiti accepted.
The conference met in March 1915. A committee was appointed for each
republic, and their reports were submitted to a joint committee. The
decisions so reached were unanimously accepted by the whole conference.
They recommended a standard gold coin for the whole of America, also
unification of regulations concerning classification of merchandise,
customs, consular certificates and invoices, trade marks and kindred
matters. Questions of banking facilities, transport and credit were also
discussed.

Furthermore, it was decided to institute an International High
Commission, which should continue permanently the work of the
conference, sitting in rotation in the capitals of the several
republics. This commission met first in Buenos Aires in April 1916, and
decided to create a Central Executive Council to consist of three
members, namely the chairman, vice-chairman and secretary of the section
representing whatever country should be at the time the headquarters of
the High Commission. On the motion of Argentina it was unanimously
agreed that the headquarters for the first year should be Washington.
Thus the first Central Executive Council consisted of three North
Americans, the three heads of the United States section of the
International High Commission.

During the last three years, North American capital has been poured into
Latin America, notably into Brazil, although perhaps the most striking
instance is the acquisition of three huge and profitable mining
properties in Chile, producing copper and iron. American commissioners
are studying the field; direct steamship communication between the two
continents has been extended; and American banks have been opened in
many South American cities. It is remarkable how large a space is given
day by day to Latin America in the Daily Commerce Report and List of
Trade Opportunities published by the United States Bureau of Foreign and
Domestic Commerce. Meanwhile the Pan-American Union, housed in a
magnificent palace at Washington, labours unceasingly to draw closer the
political, economic, social, and intellectual relations.

But in other directions, indeed in all directions, Latin-American
economic and international relations are opening out and finding new
roads. Canada has earned a high reputation by her industrial
enterprises, and Canadian banks are being established in South American
capitals. The Dutch too are opening banks and preparing to extend their
trade. Japan, also, is drawing closer to this new Europe of the western
hemisphere. Japanese immigration is increasing, not only to the
republics of the Pacific coast, but also to Southern Brazil. The
Japanese steamship service to the west coast has been extended, and
lines of Japanese ships are now running, also, to Buenos Aires and Rio.
Industrial Japan aims at substituting for German trade the production of
goods formerly imported from Germany, and Japanese pioneers are
travelling in South America to study and prepare the ground. Japanese
relations with Chile are particularly close and friendly. Chile can
supply iron and copper, which Japan wants; and in return Chile is
prepared to take Japanese cotton and silk. Kaolin or china clay was
lately discovered in Chile: a specimen was sent to Japan for trial; and,
as a result, a china factory has been started in Chile, the skilled
labour being provided by Japanese artisans. Truly, the whole world is
drawing nearer to South America.

What of the British position? The British "re-discovered" Latin America
more than a century ago. England, as well as France, was the school of
Miranda and Bolívar. England provided the sinews of war for the
emancipation of these lands, and the British legion which served under
Bolívar was saluted by him, on the battle-field, as _Salvadores de mi
patria_. South America honours the name of Cochrane among the heroic
figures which stand upon the threshold of independence: nor has she
forgotten how Canning's generous statesmanship helped her to secure the
fruits of victory. One may read, in great part, the history of the
struggle for independence in Memoirs written by Englishmen who took part
in it. And in succeeding years the British held in those countries a
peculiar position of gratitude and respect. The first Argentine foreign
treaty was with Great Britain. Uruguay owes her independence, in part at
least, to the intervention of British diplomacy, which was held in equal
honour at Buenos Aires and in Rio. The founder of the Pacific Steam
Navigation Company was an American, who, failing to find support in his
own country, went to England, and there launched his great scheme of
maritime trade on the Pacific coast. The same American, William
Wheelwright, was the founder of the Argentine railway system, through
English capital and enterprise. Over 1000 millions sterling of British
capital are invested in Latin America in the form of government loans
and corporate enterprises whose capital can be counted, without
reckoning private investments, such as ownership of land. Total British
investments in the Argentine alone exceed 500 millions sterling. The
British created the Chilian nitrate industry, in which Chilian and
British ownership are now about equal. Our fathers and grandfathers
dared much, risked much, lost much and gained much in Latin America, and
have left us an unrivalled reputation for good work and steady
integrity. _Palabra de Inglés_, "the word of an Englishman," is still a
proverb throughout those countries.

Yet there is truth in the remark of a German author that the British
have made no "cultural efforts" in Latin America. They are viewed with
respect rather than with an intimate cordiality which they have not
sought. It has been said that an Argentine takes off his hat to an
Englishman, but tucks his arm in that of a Frenchman. This absence of
deliberate effort does not mean the absence of moral influence. An
official of the Pan-American Union remarked to the present writer that
the English had done a "wonderful work" in Argentina by introducing and
spreading the game of football, which had taught lessons of fair play,
voluntary disciplined combination and good humour in defeat. The Boy
Scout movement has taken root throughout Latin America, holding up
everywhere in the spirit of its work and in local Scout papers a high
standard of honour, truthfulness and conduct. These are some examples of
a widespread influence exerted by certain sides of English life and
character. Yet a certain atmosphere of aloofness still envelopes the
British in Latin America, and this attitude is reflected in England. The
languages and the history of those lands have not received their due in
our schools and colleges. It has been comparatively rare to find in this
country a keen and well-informed interest in matters wherein our own
people have had a far greater share than our neighbours on the European
continent or in the United States. What is wanting is a breath of
enthusiasm for a most picturesque past, a present situation of absorbing
interest, and the prospect of a future which promises boundless
possibilities.

Yet the movement of recognition is making way among us. The number of
descriptive books published in recent years concerning those countries
points to a reviving interest. Our schools are providing Spanish
classes: our universities are founding professorships or lectureships in
the Spanish and Portuguese languages, and the study of Latin-American
history is finding admission to its due academic place. We are beginning
to perceive that the life of those countries touches us closely, and
that some knowledge and thoughtful interest concerning them should be
part of the mental equipment of an educated Englishman. Moreover, the
recent establishment of an Anglo-Spanish Society and also of an
Anglo-Portuguese and Brazilian Society indicates a growing disposition
for sympathetic and reasonable intercourse with the peoples of the
Ibero-American lands.

It would be out of place here to talk of this or that defect in British
business methods or to suggest possible amendments. Such matters may be
left to business men. Mr Herbert Gibson, in the fascinating address
which he lately gave in King's College, London, sets the matter on a
higher plane. "I do not think," he says, "it is so much a question of
this or that system of weights and measures, or of the insularity of our
classes of goods, as a question of a more intimate and sympathetic
understanding between the peoples themselves. Trade can no doubt go on
without such an understanding; but, where it exists, commercial as well
as political, social and intellectual relations are strengthened. It
seems to me that where our relations with South America have weakened or
at least where they have not progressively increased, is in that
man-to-man understanding and sympathy that opened the doors of all South
America to our grandfathers."




CHAPTER V

EFFECTS OF THE WAR ON THE REPUBLICS


_El país de mañana_, "the Country of Tomorrow." One may hear the proverb
any day on the lips of Spaniard or Spanish-American in whimsical
self-criticism concerning his own ways and those of his people and
country. But the word applies in another sense to the Spanish-American
republics. They are the countries of tomorrow, the lands of the future,
the lands of promise, this score of Latin-American republics; for they
are twenty in number. Owing to want of space and the comprehensive
character of our subject, I have been obliged to speak of Latin America
as a whole. This is not inappropriate, for Latin America does form a
world in itself, as all Latin-Americans feel, and indicate in their
intercourse with one another. Thus, one may quite rightly speak of Latin
America as a whole, just as one used to speak of Europe as a whole. But
this western world, which sprang from the Iberian Peninsula, is a group
of twenty republics differing from one another in situation and
character and, to some degree also, in ethnology and manner of language.
These countries extend through every habitable latitude, and most of the
republics contain within their own borders every habitable altitude.
Their products are boundless, both in abundance and in variety, and
these products might be multiplied indefinitely. Name any one of the
republics, and you are naming a symbol of wealth, of existing wealth,
and still more, of manifold future wealth.

Gast's pamphlet, summarised in the second chapter, speaks of eighty
million people "reaching upward and now setting their feet on the first
steps of their life-journey." The expression may seem a little
inappropriate and, at first sight, even a little derogatory. But it is
true: and, on reflection, no South American need feel hurt at this
description, which is in fact a justification of the past history and
present position of his country. These countries are young. They have
known the turbulence of youth. Now they are pushing their way,
vigorously enough, towards maturity and clearly developed form. The fact
was distinctly stated by a Brazilian, lecturing lately in King's
College, London, who said: "The Nineteenth Century was the age of
experiment; the Twentieth Century will be the age of fulfilment." These
countries still require interpretation to Europe. Hampered at their
first start, at the epoch of emancipation, by the exhausting and
confusing character of that long struggle, by want of political
experience, by the ignorance of the masses and, in some parts, by
ethnological difficulties, they were obliged to spend a generation or
two in clearing up the aftermath of that revolution; and in most cases
their political constitutions (although in form they are models of
constitutional law) are in their actual working only now emerging from
the stage of experiment, sometimes confused and shifting experiments,
sometimes rough-and-ready expedients. For example, in the Argentine
Confederation and also in the United States of Brazil, the relations
between the Federal Government and the Governments of the States have
not attained that regular equilibrium which prevails in the United
States, an equilibrium which was there only procured at the cost of a
tremendous civil war. In most of the republics the relations between the
Executive and the Legislature have scarcely reached a stable adjustment.
We should remember that Brazil only shook off the monarchical form of
government in 1889, and that it was some years before that revolution
was really completed. Again, in the republic best known to England, the
Argentine Confederation, the multifarious and cosmopolitan mixture of
immigration from all the Mediterranean lands has hardly yet coalesced to
form a definite national type. The origin of these states, though
superficially resembling that of the United States, was in fact
fundamentally different. For every one of the thirteen British colonies
of North America was, in a sense, grown up and a developed entity at the
moment of emancipation, since they had all possessed local parliamentary
constitutions of the British type from the beginning of their colonial
days. The initial condition of the Latin-American states was much more
formless and their early difficulties were much more complex.

Some of these lands show the character of youth in the tendency to
imitation, the adoption of French and especially of Parisian ways, not
realising how much better is a genuine native development than the
imitation of even the best models. Another symptom of youth is the
lavish and sometimes ostentatious spending of money. If the
Spanish-American has money, he spends it like a schoolboy, and he likes
a splash for his money. Another sign of youth is the rather exaggerated
national or civic _amour-propre_, a lively touchiness concerning outside
criticism--a sentiment which inclines one to be rather diffident and
apologetic even about making such remarks as these. This is a local, not
a racial characteristic in the South American, for the Spaniard is even
more proudly indifferent than the Englishman concerning what the
foreigner thinks.

These young states have hitherto acquiesced in their economic dependence
upon Europe. European immigration (at least on the east coast),
Government loans raised in Europe, provision of public utilities by
European capital, importation of almost all manufactured articles from
abroad--these have been to most South Americans the accepted conditions
of life. Thus, all these republics felt a sharp and instant shock at the
outbreak of the European war. The economic equilibrium was upset, and
the machine ceased to work. The stream of European capital suddenly
dried up: so also the stream of immigration. Indeed, the supply of
labour in the Atlantic States, especially in the River Plate, dropped
below the normal after Italy joined the Allies. Scarcity of shipping,
together with the diversion to war purposes of all European energies,
diminished the exportation from South America of all commodities not
absolutely needed by the Allies for the prosecution of the war. Imports
from Europe were restricted. Germany, which had ranked third among
outside nations trading with the continent, dropped out altogether, with
the exception of the devious and struggling efforts already noted. To
the nations of South America what had seemed the natural and regular
order of things was suddenly suspended. They were thrown upon their own
resources; they were compelled to take stock of their position and to
face an unprecedented situation. They must manage their finances without
European help; they must provide their own labour. As to things hitherto
imported from Europe, they must either provide these things themselves
or go without. The shock was severe, but it must be allowed to have been
a wholesome shock. It has stopped public over-borrowing and has put some
check on extravagance of public spending. It has favoured private thrift
and has compelled those who were perhaps over light-hearted and
materialistic to take life more seriously. The Argentine family, which
formerly provided separate motor-cars for father, mother and each son
and daughter, has now to be content with one or none. The luxurious trip
to Paris or London, with its corollary of mountainous shopping, is
abandoned, and a more modest holiday is spent at the seaside or in the
mountains at home. The daily story, flashed along the cables from
Europe, of strife, of heroism, of self-sacrifice, conduces to reflection
and grave judgment. Finally, the meaning of the struggle has been now
brought home to every South American people. Every one of them is
closely touched by the recent developments of maritime warfare. Every
one is forced to come to a decision. Whatever that decision may be,
whether it be for open war, or limited participation, or rupture of
relations, or complete neutrality, that decision is expectantly watched
by the whole world and adds its weight in the balance of the great
trial. The effect must be a graver sense of national responsibility, a
more sober consciousness of national dignity.

The economic recovery, which followed the first shock, favoured this
national consolidation and development. Imports diminished, whereas the
urgent demand of the Allies for foodstuffs and raw materials soon
produced, in most of the states, a great expansion in the value, if not
in the volume of exports. Hence a favourable trade balance and an
increase in wealth. These conditions encouraged that movement of
industrial enterprise which everywhere sought to supply, by the
exploitation of home products and by the development of home
manufactures, the needs which had been hitherto supplied by importation
from abroad. Examples, taken mostly from the A.B.C. countries, will best
illustrate this industrial movement, which has been one of the most
notable effects of the war.

Argentina felt deeply the shock of August 1914. The outbreak of war fell
like a bomb in the midst of a serious financial depression, due to
speculation, extravagance and over-borrowing. The trouble was
intensified by drought and by two bad harvests, and more recently by
widespread strikes accompanied by destructive violence. But the crisis
has compelled the Argentines to rely upon themselves, to restrict
extravagances and to push forward the industrial development of their
own resources. Thus, the diminution in the supply of English coal has
led to the search for native coal, to the use of native petroleum and
native fire-wood. Lessened timber imports mean the exploitation of
native forests. A considerable quantity of native wool is now spun and
woven in the country, and home manufacture generally is increasing. Thus
the country is richer and more industrious than ever before. It is true
that this wholesome recovery is not yet reflected in the national
finances, which are still disordered by extravagance, over-borrowing,
improvident budgets, and now by the diminished receipts from customs.
However, one very interesting event deserves special mention--the credit
or loan granted by the Argentine Government to the Allies for the
purchase of the present harvest. Since Argentine Government loans are
mostly held in Western Europe, the debt can be discharged with equal
benefit to both sides, by simply taking over the obligations of the
Argentine Government on this side of the Atlantic. Even more remarkable
is the spontaneous offer made to Great Britain by the Uruguayan
Government of a large credit for the purchase of the Uruguayan harvest.
Thus, these two debtor nations have actually become creditors to Europe,
and are proceeding to gather into national ownership a large part of the
national debt. Uruguay is taking another and most striking step towards
economic consolidation. She is preparing to avail herself of the growing
national wealth and the increased value of the Uruguayan dollar in order
to buy up enterprises owned by foreigners within her territory,
particularly the railways, which are mostly in British hands. It may
here be noted that this economic movement in Uruguay coincides with a
radical and democratic reform of the constitution, a nearer intimacy
with her Latin neighbours, an approach to the United States, and also
closer relations with Europe through the abandonment of neutrality and
the signature of unconditional treaties of arbitration with France and
Great Britain.

In Brazil, the economic recovery, the industrial development and the
general movement of national consolidation are very notable. For the
entry of Brazil into the war has added a tone of effort, of serious
determination, of grave responsibility to this combined movement. At the
outbreak of war the great diminution in the export of coffee, which had
constituted nearly half of the total exports from Brazil, hit the
country very hard. But the energetic exploitation of other resources,
together with a partial resumption of coffee exports, has made good the
national loss. The Allies wanted rubber and manganese, which Brazil can
supply. The Allies wanted foodstuffs; and Brazil has become, with almost
incredible rapidity, an exporter of meat and of vegetable foods. Coal
ceased to come from Europe. The result has been that Brazil is striving
to supply her own needs by working her southern coal seams, although at
the present time want of transport is a serious obstacle to these
efforts. Manufactures of all kinds are increasing. Brazilian cotton
particularly is now largely woven at home, and this textile industry
alone now employs about 100,000 persons. Brazil is also taking more and
more into her own hands her coastal and river navigation, and is
extending her shipping lines to foreign ports. The result of this
industrial and commercial revival has been that, notwithstanding the
decrease in the matter of coffee, Brazilian exports now outstrip their
pre-war value, and they represent a far more wholesome and more
promising distribution of the national resources, since there is no
longer an overwhelming preponderance of one commodity raised in one
state. Moreover, notwithstanding the burdens of participation in the
war, Brazil has achieved by means of careful economy and retrenchment,
a wholesome reorganisation of the Federal finances. The war has not
prevented the punctual resumption, on the promised date, of cash payment
of interest on the foreign debt. The country presents a wholesome aspect
of national efficiency and national dignity.

It may be added here that the industrial movement in Brazil has been
greatly aided by the investment of North American capital, particularly
in meat-freezing establishments. It is perhaps premature to think of
Brazil, with her vast and undeveloped pastoral, agricultural and
forestal possibilities, as an industrial country. But the possession of
large deposits of iron indicates great industrial possibilities in the
future. One difficulty, the soft character of Brazilian coal, may
possibly be overcome, whether by import of fuel or by the adaptation of
mechanical appliances.

Chile, like her neighbours, felt the first shock. Germany, the principal
purchaser of nitrates, was cut off; and the republic found by sudden
experience, how dangerous and unsound was the system whereby the
national finances depended largely on export duties levied upon one
commodity. The administration rose to the necessities of the case:
taxation was distributed upon a more scientific and normal basis, and
very soon the war situation began to pour wealth into the lap of the
republic. Nitrate, needed by the Allies for munitions, reached its
highest price and its maximum production. Copper--now perhaps the most
precious of metals--followed the same course. After-war conditions,
particularly in regard to nitrate, are impossible to foresee. But Chile
has had her lesson, not to depend on the continuance of what may be
accidental conditions and not to build on the foundation of the market
in one commodity. "The war," says a representative Chilian, "has brought
us a certain prosperity and also something that is worth more than
prosperity--common sense."

The industrial movement, which has been noted elsewhere, is being
actively pushed forward in Chile, where indeed it dates from a time long
before the war; for in Chile local manufactures are favoured by local
conditions, namely, remoteness from Europe, a sturdy population, the
possession of coal and metals, and, also, a very distinct and compact
national character and national ambition, which owe little to recent
European immigration. In 1914--just before the war--Chile possessed
nearly 8000 factories employing about 90,000 persons. It has often been
questioned whether Chile, with a population of less than four millions
and a fertile territory largely undeveloped, did wisely to encourage
this industrial movement. The war has answered that question. Chilian
coal now mainly supplies Chilian needs; and, owing to careful treatment
and selection, the results have surpassed expectation. The number of
factories is growing; and in view of freight difficulties, there is a
movement towards exporting mineral products in a semi-manufactured
state.

As to the other republics, the immediate economic effects of the war
vary with the character of exports, whether needed by the Allies for war
purposes or not. The high prices of copper, sugar, and cotton have
brought to Peru a stream of wealth, and have enabled the government to
make a very interesting experiment in the scientific taxation of excess
war-profits made by exportation. Exports are untaxed until they reach a
certain height above normal price. Any addition to that limit is taxed
in a progressive ratio.

Not only have war conditions favoured a more clearly defined national
development, both economic and political, in each of the states. These
conditions also conduce to closer and more real intercourse between the
Latin-American states. There has been on the one hand a national
consolidation in each republic: but there has also been a movement
towards international consolidation in the Latin-American world. The war
has drawn these republics closer together and has taught them to feel
their need of one another, to supply one another's needs and to
recognise a nearer community of social and political interests. The
sentiment of _Americanismo_ is more than a sentiment: it is growing into
a solid fact. Apart from the war, there are many indications of a
kindlier and more intimate intercourse. The Universities of Argentina,
Chile and Uruguay exchange professors. Brazil and Uruguay agree
concerning navigation of the Lago de Merim and the river Jaguarão; and
also arrange a seasonal migration of labourers, who work from April to
September on the São Pãolo coffee estates and pass the other half-year
working on Uruguayan estancias. The same two republics adjust a
financial matter through the foundation of a joint Brazilian-Uruguayan
agricultural college. Uruguay has declared that an injury to any South
American country is an injury to them all. Envoys from the
neighbour-republics visit Bolivia to salute the newly-elected Bolivian
President, among them an envoy from the United States. Junior embassies,
hardly less interesting in character, are the visits of boy scouts from
capital to capital. The five tropical republics which hail Bolívar as
Liberator lately clasped hands in a joint celebration of his memory, and
at the same time concluded a commercial agreement concerning trade marks
and similar matters. The study of history, now actively pursued by
competent scholars in all the republics, is a unifying as well as a
humanising power: for the student who explores or writes the early
history of his own republic necessarily treats the history of all Latin
America. The history of the struggle for South American emancipation is
a single epic. And a pleasing symbol of this historical unity is to be
seen in the portrait of the Argentine commander San Martín and of the
Venezuelan Bolívar imprinted on the postage stamps of Peru. The railroad
helps this movement. The trans-Andine railway is a link of peaceful
intercourse between Chile and Argentina. A direct mail train service has
been established between Rio and Montevideo and also between Rio and
Buenos Aires. There is a prospect that the last difficult link to
connect the railway systems of Bolivia and Argentina will soon be
supplied. This is an imperfect and rather haphazard list of symptoms of
a natural and tranquil movement towards international unity, which
accompanies and supplements a more vigorous economic and political
development within the several states. The war situation has favoured
this movement. The interruption or diminution of trade with Europe has
led these states to trade more with one another. At first, this trade
consisted largely in the interchange of accumulated European goods: but
it soon grew into something more regular and more permanent, the
interchange of home products. Argentina recently got a consignment of
coal from Chile--in itself a small matter, but a significant one.
Brazilian coal has also found its way to Buenos Aires, and trade between
these two republics is increasing.

Both Brazil and Chile are aiming at the national and internal
development of their mercantile marine and coasting trade. But the first
use which Brazil made of the sequestrated German ships was the opening
of a Brazilian steamship line to Chile. The action of Chile is still
more noticeable. A law has just passed the Chilian Congress that after
the lapse of ten years the Chilian coastwise trade shall be confined to
Chilian ships. But the Chilian President may at his discretion extend
this privilege, by way of reciprocity, to the merchant-ships of other
Latin-American countries--a clear recognition of the fact that these
republics form a community of nations in themselves. Thus the two
movements are complementary: internal development is more and more a
national affair: the development of inter-state relations is felt to be
a necessary part of the national development, and more and more to
concern all the states: it is also felt to concern these people not only
as Brazilians or Argentines or Colombians, but as Americanos. In
dwelling on this point, there is probably no danger of giving rise to
geographical confusion. A Colombian visitor, lecturing lately in King's
College, remarked that, if a British merchant is invited to do business
with Colombia, he usually replies, "We have our agent for South America
in Buenos Aires," ignoring the fact that, if a Colombian merchant by any
rare chance should have occasion to visit Buenos Aires, he would
probably pass through London on the way. The trade of all these states
with one another is naturally immensely less than with Europe or with
the United States, for the simple reason that they are all producers of
raw materials and importers of manufactured goods, whereas the European
lands, and now the United States also, are importers of raw materials
and exporters of manufactured goods. But that very circumstance
illustrates the fact that these countries are a cluster of similar
organisms. They sit back to back and face outwards: yet as each one
grows and expands, they all become conscious that they are sitting
close, shoulder to shoulder. They are beginning to touch hands and to
pass their good things, both abstract and material, from one to another.
Things are changed since the names of Brazilian and Argentine were
almost mutual bugbears and since Chile and Argentina seemed to be
chronically "spoiling for a fight." The figure of Christ, which stands
on the boundary between these two nations, symbolises a truth--a reality
all the more valuable inasmuch as it is in part intangible, a product of
the realm of ideas, not merely of the material world. The fault of these
countries and an unfortunate result of their business connexion with
Europe has been that, however prolific in rhetoric, they have been at
bottom too materialistic and have been apt to suppose that the
convenient appurtenances of civilisation--railways, telephones,
tramways, motor-cars, all provided by the foreigner--in themselves
constitute civilisation, not quite realising that the word means the
faculty of living in organised communities. It is an admirable thing if
they can find an ideal, transcending their own borders, in the sentiment
or principle or fact of Americanismo: for that word does represent a
fact. An Englishman or a Frenchman, if asked about his origin, would
never think of saying, "I am a European"; but from the lips of an
Argentine or a Colombian the words _Soy Americano_ fall quite naturally,
with the addition _Colombiano_ or _Argentino_. I have heard a South
American speak in conversation of _La América Nuestra_, "Our America,"
when he had occasion to distinguish Latin America from the United
States. The word was casually dropped for purposes of definition: yet it
is an inspiring and significant phrase, _América Nuestra_. Which of us
could now so speak of "Our Europe"?

The war has favoured this spirit of Americanism in a tangible way
through the growth of economic intercourse. On a higher and broader
plane, the same thing is happening. We saw this when Brazil severed
relations with Germany. Her announcement, communicated to her
neighbour-republics, was received with a kind of demonstration of
Latin-American solidarity. Almost every Latin-American state responded
in terms of warm appreciation and sympathy. The Argentine Government
wrote that it "appreciated thoroughly the attitude of Brazil, which was
justified by principles of universal public right, and expressed to
Brazil the most sincere sentiments of confraternity."

As the Americano looks across the Atlantic, he may congratulate himself,
not without a feeling of civic pride, that he belongs to another world,
a system of republics living at peace with one another. A century ago
Canning boasted, "I have called a New World into existence to redress
the balance of the Old." It was a prophecy rather than a boast. Now is
the time for that New World to fulfil that prophecy by realising itself,
by creating itself.

It is no inconsistency to add once more that Latin America is at the
same time drawing nearer to all the nations of the world, that its
long-standing historic connexion with Europe becomes emphasised and
extended. Who could have foretold, even a year ago, that the Republics
of Peru and of Uruguay would offer the use of their ports to the
warships of belligerent European monarchies, that Brazil, Cuba and
Panamá would be represented, as recently happened, at the Allied
Conference in Paris, or that a Brazilian squadron would be acting with
the British fleet in European waters? It can no longer be said of these
states, as was said some years ago, that they stand upon the margin of
international life. This closer participation in world affairs does not
contradict, but rather confirms and explains, what has been said
concerning the growth of _Americanismo_, the consolidation of a younger
and distinct Europe across the ocean. As these states become drawn into
the general movement of world affairs, they are compelled to define more
clearly their own position in a world of their own. One may find some
analogy in the British Empire, whose members, as they grow into nations
and become severally involved in relations with all other peoples, find
it more necessary to reaffirm and to define their relations with one
another.

But in speaking of Latin America, one has to draw a line, or rather a
note of interrogation, round Mexico. The history of that unfortunate
country has been profoundly affected by her geographical position
within the North American continent. The path which she has followed in
recent years--a path not entirely of her own choosing--seems rather to
lead outside the ring-fence of Latin America. It is an interesting
speculation whether that path may not eventually lead her into another
fold, the fold whose shepherd resides in the White House at Washington,
whether that shepherd desires to undertake the responsibility or not.

The present position is an anomalous one. The political frontier of the
United States is the Rio Grande, but the geographical frontier of North
America is the Isthmus of Panamá, and that geographical frontier has
been occupied--merely as an outpost so far---by the United States. The
Republics of Nicaragua and of Panamá have been drawn under American
tutelage. The question arises whether after the great war the United
States may not be led on by the logic of events so to extend the
struggle on behalf of democracy against autocracy that the frontier,
dividing Latin America from the region under Anglo-Saxon control, shall
be the geographical boundary between the two continents. President
Wilson indeed has assured the Mexicans, with obvious conviction and
sincerity, that no aggression is intended against their territory, and
that he desires a common guarantee of all the American republics to
protect the "political independence and territorial integrity" of all.
But no statesman can shape the future or absolutely bind his successors.
It may be pointed out that there are various degrees and methods of
control, some of which may be found not quite incompatible with the
spirit of President Wilson's assurances. The precedents of Cuba, Panamá
and Nicaragua are suggestive.

This leads us to our last topic. We have discussed _Americanismo_, the
sentiment or system which aims at uniting the Latin-American republics.
What about Pan-Americanism, the sentiment or system which aims at
uniting all the American republics?




CHAPTER VI

PAN-AMERICANISM


The relations of Latin America with the United States are chiefly
connected with those tendencies of United States policy which are
associated with the name of Monroe. A survey of the Monroe Doctrine
would here be out of place: but the main points bearing on the present
situation may be indicated. The injunction imposed in 1823 by President
Monroe upon European interference in America was intended to meet
certain European designs which at that time seemed to endanger the
"peace and safety" of the United States. But Monroe's declaration,
although its immediate purpose was self-defence, involved a permanent
protest against any European aggression in Latin America, and thus set
up the United States as self-constituted champion of those countries.
Such a position involves a certain superiority of attitude and cannot be
very clearly distinguished from protection; and protection is apt to
merge by gradual steps, often only half perceived and not deliberately
intended, into Protectorate. Thus, the development of the Monroe
Doctrine has followed two parallel lines of policy, protection against
Europe and national self-assertion. This latter more positive aspect has
impressed itself upon the public mind. The advances in the Caribbean
region, which have been mentioned in the first chapter, were undertaken
not in order to satisfy any doctrine or theory, but to satisfy the
irresistible needs of a vigorous growing Power. But since, for a
generation past, it has been expected of American statesmen that they
should justify their orthodoxy as adherents of this doctrine, these
steps towards protectorate or dominion have been explained in a series
of public pronouncements as developments or examples of the doctrine.
Naturally, therefore, the term "Monroe Doctrine" is popularly understood
as connoting an imperial policy, a movement towards supremacy or
hegemony.

In any case, the obvious comment on the Monroe Doctrine is that it has
indeed protected the American republics from European aggression, but
has not protected them from American aggression. It has not protected
Peru from Chile nor Mexico and Colombia from the United States. Again,
it is a uni-lateral arrangement announced by one Power alone, on the
assumption that this action would be taken for granted by the other
American republics. This attitude does not entirely commend itself to
those states, especially as they grow stronger and more conscious of
their strength. American business men plainly assert that the Monroe
Doctrine is bad for business[4], and warn their countrymen against
straining after a fictitious inter-American sentiment--an attitude which
"is often a cause for resentment, the more felt because seldom expressed
by the courteous Latin[5]." An article in the Pan-American Bulletin for
December 1917 deserves particular attention. It cleaves through the
difficulty by declaring, on the authority of Mr Root, that the Monroe
Doctrine today means no more than what President Monroe meant a century
ago: "The Monroe Doctrine is an assertion of the right of self-defence,
that and nothing more. France and Britain are in the field to protect
their Monroe Doctrine, the sovereignty and independence of Belgium ...
there is nothing here ... in any way derogatory to the full sovereignty
and independence of even the smallest of the Latin-American countries.
It is true that the first proclamation of the Monroe Doctrine carried
with it an implied offer of aid to the newly liberated Spanish-American
colonies against proposed aggressions by the Holy Alliance.
Self-protection was the motive ... it counts for nothing against a set
purpose to defend one's own house that in so doing one performs an act
by which one's neighbour is likewise defended." The article concludes by
declaring that the Monroe Doctrine still prevails, strictly limited to
its original sense, and that Pan-Americanism is an entirely distinct
policy, which must not be confused with it.

This re-statement of the Monroe Doctrine in its original terms, this
declaration that United States policy is just like that of other
nations, was probably prompted by the sense that the later developments
of the Monroe Doctrine hindered the economic propaganda which is the
main business of the Pan-American Union. But it has been further argued
that the great war has exposed the weakness of Monroism, since, in the
event of a German victory, nothing but superior force could prevent
German invasion and occupation in Canada or in any trans-Atlantic
country which might be at war with Germany. The arming of the United
States has in some degree answered this objection, which is perhaps as
contingent and theoretical as the doctrine itself. But the war has
certainly emphasised the fact that emergencies must be met and settled
as they arise, and that, since they cannot be foreseen, they cannot be
covered by pre-conceived theories. At any rate a sentiment has for some
time been gaining force that the inter-American policy of the United
States calls for some kind of revision or re-statement; and the solution
is sought in "Pan-Americanism."

In seeking a definition of that phrase, European analogies will scarcely
help us. The word "Pan-Germanism" usually implies some common action or
interest among all those who speak the German language, and suggests
some kind of racial bond or sense of kindred. The word "Pan-Slavism"
appears to mean common action or interest among all who speak the Slav
tongues, and similarly suggests some ethnological bond of kinship.
Obviously Pan-Americanism must mean something quite different, for the
American differs from his nearest southern neighbour, the Mexican, more
widely than the Norwegian differs from the Greek. Moreover,
"Pan-American" is a term of recent origin and still somewhat fluid in
its application. It has sometimes been used merely as the equivalent of
"European" or "Asiatic"; for the word "American" commonly bears a
national sense and there is no convenient and accepted term covering the
two Americas. For example, Mr Taft in his Presidential message of 1909
spoke of "our Pan-American policy" much as a British Prime Minister
might speak of "our European policy."

Thus, the obvious application of the term is geographical. Yet Americans
of authority are fully aware of the need of reservation in this
geographical application. In 1909, the Director of the Pan-American
Union pointed out, with some mortification, that on the occasion of the
Pan-American Congress at Buenos Aires, most of the delegates from the
north found that the easiest route from the chief city of North America
to the chief city of South America lay through Europe. And an eminent
American economist[6] has lately uttered a warning against geographical
misapprehensions, explaining that, whereas the Panamá Canal makes the
west coast of South America an extension of the east coast of the United
States, nevertheless the bulk of the South American population lives
upon the Atlantic coast and prefers its traditional, customary and
natural intercourse with Europe.

But in considering the meaning of an incipient and growing force, it
would be a mistake to dwell on possible limitations and difficulties;
and it would be pedantic and unpractical to demand precise consistency
or exact definition. We are rather concerned with aspirations,
tendencies and formative ideas. Indeed, it might fairly be argued that
these limitations, which are fully realised and avowed in North America,
are no argument against the Pan-American movement, but rather an
argument in support of it, as being a prudent and wholesome effort to
overcome existing obstacles and promote a better understanding between
neighbours.

Pan-Americanism may be described as the movement which aims at uniting
all the American republics:--one cannot say all the American countries;
for in the map printed on the cover of the Pan-American Bulletin, Canada
is left blank, as not forming part of "Pan-America." This omission alone
is enough to prove, if proof were needed, that there is something
artificial about Pan-Americanism: for obviously a New Yorker is more at
home in Toronto or Halifax than in Rio or Buenos Aires; and there is a
closer political similarity as well as a closer political bond between
Washington and Ottawa than between Washington and Caracas. But, after
all, most political combinations are largely artificial: they are
products of statesmanship rather than of nature, or at all events they
are products of nature assisted by statesmanship. And Pan-Americanism
need not be less real or less valuable for being a construction
deliberately planned instead of a spontaneous organism. But since the
Pan-American movement is artificial, and a matter of policy and
management, still rather formless, Americans of both continents differ
considerably both as to its meaning and its usefulness, some declaring
that it means nothing and is useless or even mischievous, while others
regard it as a kind of perfect circle embracing all the future.

Dr Usher, the American historian, dismisses the whole notion, on the
ground that the United States and Latin America are utterly unlike,
unsympathetic and even antipathetic to one another. Against this
conclusion may be quoted two opinions from Chile and from Colombia, the
two South American countries which have in the past shown most
resentment at North American pretensions. "We want no papa" exclaimed a
Chilian public man some years ago: yet in 1910 Señor Echeverria, Chilian
consul in London, in a public lecture declared himself a decided
believer in the benefits of Pan-Americanism, and as disposed to accept
the sincerity of North American pacific and non-aggressive professions:
and in the same year Señor Pérez Triana, the Colombian diplomatist,
expressed a restrained but decided optimism concerning the benefits to
be derived from the Pan-American Congresses, and pointed out that they
had already brought about the general acceptance of the principle of
arbitration among American Governments. These favourable views have
regard to the practical benefits to be found in a certain course of
action. The destiny of Pan-Americanism depends on the question whether
these practical benefits are strong enough to overcome the barriers of
race, language, religion, law, customs and tradition.

The objections based upon these obstacles to union is not quite
convincing. Incompatibility of temper is a bar to marriage: it is no bar
to a practical and thoroughly friendly business understanding supported
by mutual respect and methods of give and take. The tendencies of the
age favour large combinations, overstepping the bounds of nationality
and sometimes cutting across the lines of kindred and tradition. The
challenge of Central Europe has raised up such a combination in Western
Europe, and may help to give birth to a fresh and large grouping of the
Powers of the western hemisphere.

The question occurs whether, apart from reasons of practical
convenience, any fundamental basis can be found for the union of
communities so dissimilar in character and in action. These republics
have this at least in common: they have all started life in "new lands";
they are all trans-Atlantic offshoots from European monarchies; they
have all thrown off political dependence upon Europe; they have all
adopted republican forms of government; and, to whatever extent some of
them may avoid democratic or even republican methods, they have all
rejected the hereditary principle in government. Moreover, before the
present crisis they all cultivated, so far as possible, a certain
political aloofness from Europe: and they all aim at pursuing a destiny
distinct from and, in their belief, transcending that of Europe through
the inexhaustible possibilities offered by a New World.

What success has attended the United States in her recent policy of
approaching Latin America? Here we are on delicate ground, and whatever
view be expressed is sure to meet with disagreement on the part of
qualified judges. It is not easy to keep one's finger on the pulse of
South American sentiment, nor can we expect to find unanimity. We can
only watch indications and symptoms. In the past, on the whole, the
attitude of the United States has been accepted in so far as it implied
protection; but it has been warmly resented in so far as it seemed to
imply any kind of protectorate. A certain arrogance in the public
pretensions of the United States has been felt to be an offence and a
menace; and this feeling has been intensified by the bearing of
individual Americans. Yet a representative Chilian, Señor Vildósola,
writing since the outbreak of the war, says, "The United States was not
popular in Chile; her political attitude was rude and overbearing (_une
politique brutale_); but in the past ten years this is changed. The Big
Stick is relegated to the cellars of the White House. A certain
refinement of forms has appeared in the Secretaryship of State, and a
deeper knowledge of the peoples of the continent has induced the
Government, press and people of the United States to treat Chile and her
neighbours with a new respect and consideration." It may here be noted
that Chile has lately entered into close economic relations with the
United States, through the American acquisition of great mining
properties in Chile and through the export of nitrate and copper to
North America, largely carried in Chilian government transports.

A representative Brazilian lately remarked to the present writer, "I
believe there is no danger at all from the United States" and, referring
to the preferential tariff granted by Brazil to certain imports from the
United States, he added, "The Americans admit our coffee free, and we
grant this abatement in return. They tax imports of things that they
produce, and admit free the things they cannot produce. You English are
different. You tax our coffee: you tax things you cannot produce and let
in free the things you can produce." There can be no doubt that these
close commercial relations and recent large American investments in
Brazilian industries conduce to this tentative entente with the United
States.

The relations of the A.B.C. countries seem to indicate similar
tendencies. It is probable that the main object, which led these three
republics to entertain proposals of alliance, was security against
possible danger from the United States. As these apprehensions
diminished, the proposals were shelved, and the A.B.C. resolved itself
into its component alphabet. There was another not less interesting
reason for this dissolution: the proposed combination of the stronger
South American states was not welcomed by the other republics, which
felt that an arrangement of this kind did not favour the union and
harmony of the whole continent, even though the professed intention was
that it should serve as a nucleus which might gradually win the
voluntary adhesion of other republics.

Again, those republics which have been drawn closely under the influence
of the United States, threw in their lot with her by declaring war
against Germany--a decision which seems to be an act of gratitude, and a
recognition that their position of dependence is not felt to be irksome
or degrading.

A recent act of the small but sturdy Republic of Uruguay seems to be
very significant. After first severing relations with Germany and then
rescinding her declaration of neutrality, Uruguay decreed that "No
American State, if engaged in a war against a European State in defence
of its rights, shall be treated as a belligerent by Uruguay." There is
something a little whimsical in this previous sweeping aside of all
contingencies, and one may imagine circumstances where the
interpretation of this decree might puzzle the legal advisers of the
Uruguayan Foreign Office. But the whole-hearted comprehensive intention
of the decree is obvious. Uruguay is prepared to go the whole way in the
direction of Pan-Americanism, and opens her arms equally to all the
republics of both American continents.

The proposal to establish a Pan-American University at Panamá may be
worth mentioning here. The suggestion sounds like a product of the
tropical spirit of those regions; but it may yet take significant shape.

The United States, before entering the war, had largely increased her
trade with Latin America. She succeeded in supplying, in great degree,
the gaps left by Germany and Great Britain. Her entry into the war has
deprived her of part of that advantage. But, on the other hand, the
final decision, the manner in which it was made, and the resolute way in
which it is being pursued, have vastly strengthened the moral standing
of the United States in the New World. Those Latin-American states which
are dependent on her joined her as belligerents. The action of Brazil,
though taken independently and inspired more by French than by North
American sympathies, followed North American action and cannot be wholly
dissociated from it. Most of the Latin-American states, by their
attitude towards the war, have as it were mounted guard behind the
Allies. But the United States stands embattled in front of her southern
neighbours, to fight the monster which threatens them all. The United
States now, at last, appears, not merely as the theoretic propounder of
a protection which was really ensured by the assent of Great Britain and
the strength of the British fleet, but as the active champion in a
common cause. This position has been strengthened by President Wilson's
solemn disavowals of any aggressive intention. These promises have
produced a marked impression in South America.

The war has brought into view another practical reason for a closer
inter-American understanding. As long as the United States remained
neutral, no other American state, such as Brazil, could have incurred
the risk of entering the war. In the past, while South American
countries were able to keep apart from European politics, this
complication or hindrance was latent and remote. But the period of
aloofness is closed, and the American republics are taking their place
among the nations of the world. Some kind of permanent entente, some
standing arrangement for exchanging views and adjusting policy, would
seem to be the best means of obviating any friction or awkwardness
between north and south in respect of external relations. Thus a closer
understanding with the United States may be regarded as a necessary
condition of closer relations with the rest of the world.

Many who know South America well will dissent from the suggestion that
the war is helping to mould into some kind of shape the rather shadowy
scheme called Pan-Americanism. They will point to the fact that most
South Americans would rather have dealings with a European than with a
North American and will recall what has been said elsewhere, namely,
that the two Americas, both historically and actually, face severally
towards Europe and not towards one another. All this is true; yet there
are signs that the tendency called Pan-Americanism, hitherto a rather
unsubstantial vision, may become a reality, differing indeed from the
picture traced by some North American prophets, but resting upon more
solid bases. We have touched upon business relations and the machinery
for carrying them on. As to political relations, the growing strength of
the greater South American republics counts for much. They feel
themselves to be in a position to say, "We do not want your protection;
but we value your equal friendship; for we are Americans as well as you.
And we are willing to group ourselves together for the preservation and
protection of that America which is ours." An equal understanding
between equals--provided it is not too formal at first, and is allowed
to be moulded by the course of events--would probably meet with a fairly
general assent, which might gradually win over those holding aloof at
first. Something of the kind seems to be taking form at the present
time. The ultimate result may be the formation of a Concert of America,
in which the more tranquil and educated elements may guide the whole.
President Wilson has suggested some such arrangement, and proposes a
combination of American republics as the best security against
aggression by one American Power upon another.

From what has been said above, it is obvious that some of the Caribbean
lands would enter such a combination as satellites or subject-allies of
the United States. Such an arrangement is not unparalleled and does not
seem impracticable, since these small states have already entered the
war in that capacity. Obviously, Pan-Americanism cannot aim at precise
symmetry or theoretical consistency. It must be an elastic system, and
must be prepared to meet and overcome difficulties. That is the purpose
of its existence. But in general the first condition of a Pan-American
combination would seem to be the abandonment of any pretensions to
hegemony by any one state. Such pretensions have shattered the Concert
of Europe. But America is a younger Europe which may take example--and
warning too--from that old Europe which has given her such institutions
and such order as she possesses. Thus a New World may indeed arise to
redress the balance of the Old.

       *       *       *       *       *

To the emancipation of Latin America Great Britain and the British
contributed more than any other outside nation. In the subsequent
development of those countries, Britain has had a large share. In the
moral protection afforded to them by the attitude of the United States,
the unostentatious and almost tacit support of Great Britain has counted
for much. And those countries are now being drawn nearer to Great
Britain and nearer to Europe than ever before. The question now
arises:--In the closer grouping of American states now in process of
formation, is Great Britain to stand aloof, a sympathetic but silent and
inactive spectator? That this question has actually been raised in the
United States, is shown by the following quotation from _The Times
History of the War_ (chapter 222, page 9): "As the _Philadelphia Ledger_
put it 'it seemed an absurdity to talk of Pan-Americanism and in the
same breath to ignore the fact that one of the greatest of the American
Powers is not included in it.' The _New Republic_ went further ...
'Pan-Americanism,' it declared, 'is a tripod that cannot stand on two
legs for ever. Only a combination of the Latin countries, the United
States and Great Britain, that is to say a combination of all the
American Powers, can make it a safe and useful organization in the world
to-day.'"

There is nothing new in this idea; for Bolívar, with singular
magnanimity, invited Great Britain and the Kingdom of the Netherlands to
send delegates to the Pan-American Congress which he attempted to
assemble at Panamá in 1826: the circumstances of the time precluded an
invitation to France. And now that Brazil and Cuba sit at the
council-board of the Allies in Paris, a conception, which seemed
feasible a century ago to a great imaginative mind, may perhaps not seem
so very remote to a practical mind today. For the present epoch has
brought home to all Americans of both continents a fact which has long
been known to Canadians and Englishmen, namely that the ocean is no
estranging gulf between nations. Today it is known that the geographical
boundary which divides the peoples into two categories and separates the
Old World of force from the New World of reason is not the Atlantic but
the Rhine. Thus now, more than ever, does it seem a little incongruous
that Washington should deny to Ottawa a community of American interests
which is conceded to Caracas, Asunción and La Paz.

Yet the scheme thus adumbrated is not at the present time clearly in
sight. The inclusion of Canada would reverse the system which now
confines Pan-Americanism to those states which have thrown off all
political connexion with Europe together with all monarchical forms.
Moreover, new and large combinations must keep within manageable limits.
Yet it is significant that a Uruguayan public man, Señor Lopez Lomba, is
now vigorously agitating, in Paris and in South America, for the
formation of a Pan-Atlantic Union, wherein the three great Atlantic
Powers, Britain, France and the United States, are to combine with the
Latin-American states, in order to wield with full effect that economic
weapon which is to decide the world conflict. A combination formed for
an immediate purpose may well have further and larger results. It is an
interesting speculation whether, in some not very remote future, the
daughter nations of the Iberian Peninsula may not be drawn into a wide
circle of understanding with Britain and her daughter nations. Thus,
that grouping of the Latin and the Anglo-Saxon peoples, which has been
formed under stress of war, might continue its beneficent working
through generations of peace. Portugal and Brazil, Great Britain and the
United States stand side by side. Most of the daughter nations of Spain
have ranged themselves in the same ranks, beside France, their
intellectual foster-mother. Spain may yet re-discover herself and her
true place in the comity of nations. At all events it is a great thing
to have proved that the line dividing freedom from autocracy does not
divide the peoples of the New World from their mother Europe, or
preclude the whole of the former from joining any great international
league such as the future may have in store for succeeding generations.

FOOTNOTES:

[4] Notably an article by Mr Pratt, Chief of the United States Bureau of
Commerce, in the _Annals of the American Academy of Social and Political
Science_.

[5] Bulletin of the Pan-American Union, March 1918.

[6] Mr Pepper, former Foreign Trade Adviser to the United States
Government, writing in the _Annals of the American Academy of Social and
Political Science_.




LATIN-AMERICAN REPUBLICS


DATES OF INDEPENDENCE

The struggle of the Latin-American States for independence, viewed as a
whole, extended from 1810 to 1824 and was marked by many vicissitudes.
Buenos Aires, with most of the Argentine Provinces, practically achieved
independence in 1810, but did not formally proclaim it till 1816.
Paraguay detached herself both from Spain and from the Argentine
Provinces in 1811. Spanish authority was overthrown in Montevideo in
1814; but it was not until 1828 that that city was recognised as capital
of an independent Republic, now known as the Republic of Uruguay. Chile
practically achieved independence in 1818. New Granada, Venezuela and
Quito were successively liberated from the Spaniards in 1819-22; and
these three countries were united for a few years under the name of
Colombia: but in 1829-30 this union broke up into the three Republics of
Venezuela, Ecuador and New Granada (now known as Colombia). In 1824 the
battle of Ayacucho gave independence to Peru; and the province of Upper
Peru was formed into the Republic of Bolivia. The Brazilian monarchy
became independent in 1821, and was converted into a Republic in 1889.
Mexico became independent in 1821, and adopted Republican forms in 1823.
The five provinces to the south-east of Mexico united in 1824 to form a
Federal Republic under the name of Central America; but in 1839 this
unstable union broke up into the five Republics of Guatemala, Honduras,
Salvador, Nicaragua and Costa Rica. In consequence of events in France,
the island of Haiti became independent in 1803; but Spain occupied the
eastern part, Santo Domingo, in 1806 and held it for 16 years. The
island formed one state from 1822 to 1844, in which year it was divided
into the two existing Republics of Santo Domingo and Haiti. Cuba was
separated from the Spanish monarchy and formed into a Republic in 1899.
The province of Panamá seceded from Colombia in 1903 and became a
separate Republic.

       *       *       *       *       *

Since external recognition is an essential condition of complete
independence, it may here be added that in 1822 the United States
recognised the independence of Colombia, Chile, Buenos Aires and Mexico;
and in January 1825 Great Britain recognised the independence of Buenos
Aires, Colombia and Mexico. This formal recognition was preceded by
amicable intercourse, by the dispatch of consuls, by relations of a
commercial and semi-official kind, and by diplomatic action which gave
countenance and support to the insurgent governments.


PRESENT STATUS (AUGUST 1918) AS TOWARDS THE WAR

The following states have declared war with Germany: Brazil, Cuba,
Panamá, Guatemala, Nicaragua, Costa Rica, Haiti, Honduras.

Uruguay has broken off diplomatic relations with Germany, rescinded her
edict of neutrality, offered the use of her ports to the warships of the
Allies, and seized the German ships in her harbours.

Peru has broken off relations with Germany, offered the use of her ports
to the Allies and seized the German ships at Callao.

Bolivia, Ecuador and Santo Domingo have broken off relations with
Germany. The exact position of Santo Domingo is not easy to define.
Since May 1916, the administration of that Republic has been practically
controlled by the United States; and this intimate connexion with a
belligerent power may perhaps be regarded as constituting a state of
belligerency for the Dominican Republic.

Mexico, Salvador, Venezuela, Colombia, Chile, Argentina and Paraguay
maintain their neutrality and their diplomatic relations with Germany.




    CAMBRIDGE: PRINTED BY
    J. B. PEACE, M.A.,
    AT THE UNIVERSITY PRESS




[Illustration: SPANISH & PORTUGUESE SETTLEMENTS IN AMERICA]

[Illustration: THE LATIN-AMERICAN REPUBLICS]


       *       *       *       *       *

Transcriber's Notes:

Unusual punctuation and spellings retained when used consistently (for
example, dispatch and despatch); otherwise changed to majority use, with
the following exceptions:

P. 24: Greek word transliterated ~apoikia~ appears as Greek script in
original. See utf8 or html for original script.

P. 76: hyphenated "to-day" retained, as quoted from other print source.

P. 76: "organization" retained, as quoted from other print source.





End of Project Gutenberg's South America and the War, by F. A. Kirkpatrick