CHAPTER I

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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 ~apoikia~ 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.

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