America Must Prepare for a War Over Taiwan
Being Ready Is the Best Way to Prevent a Fight With China
THE Argentine Revolution of June 4, 1943, marked a new phase in a crisis -- political, economic, and even moral -- that has been growing worse without apparent solution for more than 13 years. For several months now the United States has been watching the government of General Pedro P. Ramírez with mingled disapproval and bewilderment, just as for the last several years it had been watching the government of Ramón S. Castillo. To most Americans, Argentina is a riddle.
The internal change which Argentina has been undergoing is one of the most significant in the country's history. The political crisis we have been witnessing is a surface phenomenon, and will not be solved until the deeper issues are settled. In the interests of understanding, let us forget for a moment what is obvious in the present de facto government -- the unfriendliness to the United States, the Fascist bent of the military -- and look at the situation out of which it arose. The Ramírez revolution is a product of the critical 1930's. And the 1930's are the product of a profound social change in the structure of Argentine society.
Argentina has two major parties, the Unión Cívica Radical, or Radical Party, and the Partido Demócrata Nacional, or Conservative Party. The parties historically represent different classes, different policies and different interests. Until 1916, all governments were Conservative, and elections were controlled. The 19th century Conservative governments represented the landholding class, particularly the landholders of the richest and biggest Argentine province, which is Buenos Aires. The landowners, who held seignorial tracts running into the hundreds of thousands of acres, grew wealthy on the rise of land values, and lived by their trade with Europe, most particularly with England. They stood for free trade, cheap money, easy credit. They were against tariff barriers and against the industrialization of Argentina. For them, the nation's colonial position as a producer of foodstuffs and raw materials, and consumer of manufactured products, was the ideal; and La Prensa was one of the outstanding free-trade organs of the world.
The Radical Party, on the other hand, is a middle-class and urban party. It began in the city of Buenos Aires among the merchant class, the small tradesmen who lived not by exporting meat and cereals but by importing European goods. The Radical Party came into being as a protest against aristocratic government from which the middle class was excluded by electoral fraud, and as a protest against the depreciation of the paper peso, which was ruinous to the merchants. Between its founding in 1890, and its triumph in 1916, Radicalism snowballed, until it came to have a clear and overwhelming majority among the Argentine people. Its leader, and an early conspirator against the Conservative oligarchy, was Hipólito Irigoyen; and after the Sáenz Peña electoral reform, which accorded Argentina universal free suffrage, Irigoyen was elected the first Radical president in 1916.
Irigoyen served from 1916 to 1922. He was succeeded by another Radical, Marcelo T. de Alvear, who had a brilliant term. The twenties were years of great prosperity for Argentina, and the fears which the landed conservative class suffered due to the rise of Radicalism were softened somewhat by the profits in meats and grains. The estancieros -- the owners of the great cattle and sheep farms, or estancias -- thought, like everyone else, that prosperity was going to last, and that land would not stop rising in value. They mortgaged their estancias heavily in anticipation of a wiping out of the debt by further increment in value. They had been doing this for seventy-five years, and they felt no premonition of economic disaster. Banks gave too easy credit, and mortgages furnished money to build chateaux in France, where most of the aristocracy spent most of the year.
In 1928 Irigoyen ran again for president, and was overwhelmingly elected. He was the most popular president -- the only popular president -- Argentina had ever had, and the devotion of his followers was fanatic. But Irigoyen was an old man in his eighties, and his mind was visibly failing. His second term was a disaster. For two years, as the old man got feebler in mind and body, the government passed into the hands of the worst element in the Radical Party, and the nation was treated to a spectacle of plunder and inefficiency such as it had never seen. By 1930 it was evident that the government was intolerable, that Irigoyen must go. In September 1930 a military revolution headed by General José F. Uriburu overthrew the Radical government and instituted a provisional military government, with the approval, and to the general relief, of the great body of public opinion.
In April 1931 provincial elections were held in Buenos Aires. The Uriburu government was so sure that with the memory of Radical misgovernment still green the Conservatives would win that it allowed free elections. To its dismay, not the Conservatives but the Radical and Socialist opposition had the majority. For four months the government hesitated, not knowing what to do. The Provisional Government argued: we have made a revolution to put the Radicals out of office, and they win the first election; if we do not annul this election, the revolution has failed. Finally Uriburu scratched the April elections and called new ones. The elections of April 1931 were the last free expression of popular will in Argentina. Since then fraud, combined with continual intervention in the provinces, has made Argentine elections a machine for the renewal in office of the party in power. That party until June 1943 was the Conservative Party.
The Uriburu revolution played very rapidly into Conservative hands. The reason lay in the fact that the only political alternative to Radicalism was Conservatism, and the military in Argentina are a group distrustful of popular majorities. Furthermore, the Conservatives now had a great deal at stake. The breakdown of world trade in 1930 brought economic disaster to the agricultural class, first because deflation made their mortgages unpayable, and second because closing markets made it impossible to sell their beef and mutton. Family after family went down in the general ruin, including names that had stood for fabulous fortune. The estancieros who did not sink sold some of their land and mortgaged the rest. From the débâcle very little was salvaged. Certainly, the economic base of the landed aristocracy was gone, and apparently forever. It was at the very moment that the economic bases of the landholding class were slipping away that this class sought to save itself by taking political control of the Argentine Government. To understand the policies of this minority government for the thirteen years it was in control one must not lose sight of this fact. Argentine foreign policy becomes very clear if you consider, not the national interests of the country, but the special interests of the group in power. Its economic life was at stake, and it was fighting for itself, not for Argentina.
When the Uriburu interlude ended, the Conservatives elected as president General Augustín P. Justo, leader of the anti-Irigoyen split of the Radical Party, known as the Anti-Personalistas. The Anti-Personalistas were in coalition with the Conservatives, and made a good pseudo-popular front. It is worth noting that at no time did the Conservatives ever nominate a Conservative for president. The Conservatives took the vice-presidency. This indicates very well what was the real popular feeling towards Conservatism. Justo served the Conservative interests well. His six-year term exemplifies all that the ruling minority stood for in the serving of special interests, in venality, in corruption.
It is worth noting that the world depression, with its breakdown in trade and the increasing emphasis everywhere on autarchy, in Argentina struck only the agricultural class. There were other interests that were well served by the paralysis of trade -- the sugar men of Tucumán, for instance, who needed high protection for their sugar; the wine producers of Mendoza, who could not compete in a free market with Chilean and European table wines; and above all the embryonic industrial class, ambitious to make textiles, shoes, hats, tableware and electrical equipment. All these groups wanted protective tariffs, and were in a state of economic civil war with the cereal and meat interests. They wanted to shut out British textiles, French wines, Cuban and Javanese sugar. On the other hand, the agricultural class, fighting for its life, wanted Argentina to buy at all costs abroad, and especially from England, so that it would have a market for its meat and grain surpluses.
It was at the depth of the depression, when many of the estancieros had seen the fortunes of several generations swept away, that a new, a more terrible disaster threatened. This was the possible shutting of the British market to Argentine meats as a result of the Imperial Preference agreement at Ottawa in 1932. The British Commonwealth of Nations signed pacts agreeing to put all non-member nations on a quota basis in products produced within the Empire. Almost immediately the Argentine quota was set, and month by month it was whittled away, until the British market was almost entirely closed to Argentine beef. For a black moment Argentina thought the world had come to an end. The life blood of the country was its relationship with Britain: selling beef in the Smithfield market, buying woolens and whiskies and machinery. More specifically, this reciprocity was the life of the agricultural class. The alarm of the Conservatives could be gauged when President Justo sent his Vice-President, Julio A. Roca, to London to negotiate with the British.
The British, like the Argentine estancieros, had some very special interests at stake in Argentina. Great Britain for more than a century had been the largest foreign investor in Argentina. British capital built railroads, electric light companies, municipal street railways and meat-packing plants. But by the 1930's all but the packing houses were in bad shape, physically and financially. The railroad cars were obsolete, and getting worse by the day. Bonded indebtedness was so heavy the rolling stock could not be renewed. The tram companies were worse. In Buenos Aires, the Anglo-Argentine tram company had cars that averaged twenty-five years old, and with each year it lost more money. Utility companies were in the same condition. Automobile competition was daily taking more passengers away from the dirty wooden trains and the slow streetcars. British investors were getting no dividends from their Argentine railway stocks, and with the financial condition of the companies getting worse every year there seemed little possibility they ever would.
Walter Runciman, President of the Board of Trade, had many complaints to make to Roca when he came to London in 1933 looking for a meat agreement. If Argentina did not want to be shut out entirely from the London market she would have to make concessions. Certain concessions were included in the treaty; others which were political dynamite are reported to have been made verbally. The following is what Argentina seems to have agreed to do. Argentine packing houses would not have more than 15 percent of the Argentine packing business. The rest would go to the great British and American packers. Argentina would stop building motor roads to compete with British railroads, and confine its road construction to feeder lines for the railroads. Argentina would pass a transport coördination law taking over the busses that competed with British railroads. Argentina would confiscate the Argentine-owned micro-busses that competed in Buenos Aires with British trams, and buy out the almost bankrupt Anglo-Argentine tram company. Argentina would give Great Britain favorable rates of exchange with the peso. Argentina would buy more from England and less from the United States. In return, Great Britain agreed not to reduce its quotas on Argentine meat any further than it already had.
The unfortunate thing about this agreement is that it tried by pressure to save a structure which might well have been saved simply by better business methods. The British railroads in Argentina were so old and gave such bad service, and their real capital value was so much less than the companies tried to make it appear, that only a stringent reorganization could have rescued them. They needed new rolling stock, yet had so little money that they were taking from the employees' pension fund to keep going. When automobile transportation came in, the answer of the railroads was not better service to compete with the busses, but a memorial to the Argentine Government, signed by all the railroads, protesting against the construction of highways.
Similarly, the Anglo-Argentine tram company, instead of trying to compete with the fast lines of micro-busses, called colectivos, pressed the British Government to urge the Argentine Government to confiscate the colectivos. Subsequent to the Roca agreement, the Argentine Congress passed the Transport Coordination Law. The capital of the Anglo-Argentine was recognized by law, and the company was guaranteed 7 percent on it. In lieu of taxes, the Argentine Government took shares in a new street railway monopoly to be made up of the Anglo-Argentine and other lines. Public indignation led to many acts of violence against the streetcars. Significantly, the first spontaneous act of the Argentine mobs when the June revolution broke out was to attack streetcars and burn them.
The Transport Law led to other abuses. The Compañía Hispano-Americana de Obras Públicas y Finanzas, a subway, was incorporated into the newly-created municipal monopoly. In an investigation organized by the Ramírez government the charge was made that the company's capital had been watered by 50 percent when it went into the municipal system. One thing is beyond dispute, and that is that this curious company was built 90 percent on bond issues. Yet the capital structure was recognized by the Justo government.
One incident under the Justo régime which attracted great attention involved the Buenos Aires electric light company, called the C.A.D.E. (Compañía Argentina de Electricidad), which is formally Belgian but seems to be controlled from New York. The Buenos Aires city council extended the company's franchise 15 years. The franchise, which was to expire after 50 years, stipulated that at the end of that time the company, with all its installations, was to be turned over free to the municipality. The council voted that when the franchise expired, the city had to pay the C.A.D.E. for its installations, which would run into millions. The day this ordinance passed, the papers spoke openly of how much each councilman had been paid for his vote. There was a dramatic scene in the council chambers after the vote. A spectator, who had been in the visitors' gallery, descended to the floor and stood before one of the councilmen. "Sold!" he screamed. "You have dishonored our father's name! You grafter!" It was the councilman's brother, a member of the same political party.
The corruption of the period, the concessions to foreign capital, and especially to British capital, were not accidental. The agricultural interests were paying the necessary price to keep the market open for their meat and cereals. The price included the strict maintenance of Anglo-Argentine bilateralism, and this involved shutting down the Argentine market to American goods. Before the Roca Pact, the United States was the largest seller in the Argentine market: after the Pact, England was, and the United States found itself shut out by every means at the disposal of the Conservative government. Exchange controls were instituted. People who wished to buy British goods could get pounds cheap. If they wanted to buy American automobiles, however, they paid 20 percent more for dollars. American goods were put on quotas, and finally more than a hundred items were embargoed altogether. The government also juggled trade figures to show that it had less dollar exchange available than it really had. The United States was angry, but protests evoked the reply: "You will not buy our beef. We buy from those that buy from us."
The economic hostility of the Conservative government towards the United States was reflected at every Pan American conference. What the Americans did not seem to realize was that the men in power had a vital stake in maintaining trade bilateralism with Great Britain. On the day that Argentina bought in the United States instead of in England, that day the meats and cereals of the agricultural class would cease to have a market.
The policies of the government nevertheless had enemies, and these became daily more numerous and more powerful. In spite of all its best endeavors, the government could not stop Argentine industry from mushrooming in the 1930's, when world trade came to a stop. Argentina began making all the light goods it had once imported, and the manufacturers grew rich. As their wealth grew, so did their power. Today their interests are directly at variance with the interests of the estanciero minority. They want to break Anglo-Argentine bilateralism. They want to buy heavy machinery in the United States and industrialize. They have their allies in the sugar and wine men.
This has been the underlying battle in all the political confusion of the thirties.
The average man-in-the-street was embittered and disillusioned by the spectacle of the corruption and fraud of the Conservative governments. The government bureaucracy, which is filled on the spoils system, was swept clean of the opposition and filled with incompetents who were friends of Conservative politicians. The touchstone to success was pull. With it, the most incompetent and dishonest man was made. Without it, no one, no matter what his education, no matter what his intelligence, could get so much as a clerical position. The young people who came of age in the decade 1930-1940 were a frustrated generation. Politically and economically they were ciphers. Graduate engineers, graduate chemists, graduate teachers found every avenue closed to them. Cynicism became the fashion, and this generation was so thoroughly, so effectively submerged that it has almost no representatives in Argentine politics today.
The opposition was scattered and confused. There was the small, hard-working, progressive Socialist Party, which habitually carries the national capital in elections. But its leaders are old, and young men do not join it. The Communists had a brief flurry in the early 1930's, when they were especially active in the universities. But they do not seem to be important now. At the other extreme were the nationalist groups favoring an Italian type of totalitarian-clerical state. They, too, were numerically small. Both extreme right and extreme left were united in denouncing the concessions to foreign capital, which became the great political issue of the day. Nationalism made strong headway in Argentina, and its whipping-boy was the foreign companies that were getting the unjustifiable concessions at the public's expense.
The great failure of the decade was the Radical Party, still the representative of the disorganized majority. The Radicals were demoralized and leaderless after the loss of Irigoyen, who had held them together by the sheer force of his personality. Without him their leadership was mediocre and corrupt. Radical deputies and councilmen were conspicuously involved in every financial scandal of the Justo régime. Instead of fighting Justo they came to an understanding with him that his successor would be Roberto M. Ortiz, another Anti-Personalista whom the Radicals had hopes of winning back to the party. Ortiz succeeded Justo in 1938, and began a strong campaign to restore honest voting to the country. For two breathless years the public watched as President Ortiz cleaned up province after province, and the Radicals, with honest voting, won back their majority in the Chamber of Deputies. But in 1940 Ortiz fell ill; diabetic and blind, he had to turn the government over to his arch-Conservative vice-president, Ramón S. Castillo.
Castillo brought back all the old frauds and corruption of the Justo régime, and with interest. In the face of this new blow, the Radical Party was again without leadership. The most it was capable of was unlimited obstructionism in the Chamber, tying up even such necessary measures as the budget. The public was disillusioned and cynical.
So blind was the hatred of the United States felt by Castillo and his Foreign Minister, Enrique Ruiz Guiñazú, that even at a time when it was the only nation in the world able to furnish Argentina with steel, coal and machinery, they preferred not to buy at all but retire their dollar debt and pile up a gold surplus. The results of this short sighted policy are now felt. Argentina has no stockpile of steel, machinery, telephones, electrical equipment, cars, or any of the other things it could have bought two years ago. The pinch is getting severe and will get worse. But the Conservative government to the last was true to its tradition: if it could not buy in England, it would not buy at all.
For 13 years Argentina watched its government grow worse without a single opposition party making its strength felt. The Radicals did nothing to express the popular resentment at what was going on. One of the most brilliant political figures of recent Argentine history, Lisandro de la Torre, who was the leader of a small agrarian party of the province of Santa Fé, made an exposé of the foreign packing house monopoly on the floor of the Argentine Senate that lasted two months. His revelations were sensational, so sensational that an attempt was made to shoot him on the Senate floor (the assassin instead killed his fellow-Senator from Santa Fé). Most of the big newspapers played down de la Torre's report, and it led to nothing. In 1939 he put a bullet through his heart.
The 13-year rule of the Conservative Party came to a fitting climax in 1943 when President Castillo chose as his successor a man whose landholdings in the north of Argentina ran to over a million acres. This powerful Conservative politician was reputed to have had a debt with the Banco de la Nación of approximately 20,000,000 pesos. He was known as an exploiter of Indian labor, which he transported from plantation to plantation in cattle cars. When it became apparent that he would be the next president there was deep anger, but so great was the political inertia that there was no chance of effective action. The President-Designate was referred to as "that negrero -- that slaver."
It was in this atmosphere of frustration that General Pedro P. Ramírez, Minister of War in the Castillo government, overthrew the President, and, a few days later, assumed the executive power.
Just before the revolution the Radicals and Socialists had been dickering over the formation of a united front against Castillo in the coming presidential elections. The negotiations had gone on for several months, and had finally come to nothing. In the crisis, neither party was capable of sacrificing its petty interests to defeat the Conservatives. The Radicals blamed the Socialists, the Socialists the Radicals. In any case, one thing only is certain, and that is that the Radical Party finally abandoned the proposed Democratic Front and decided to offer its candidacy to General Ramírez, the Minister of War. The reason for the move was simple. All that had kept the Conservatives in power was army support, and the Radicals were making a play for the army in a last desperate attempt to get into power.
Castillo heard of the negotiations with his Minister of War almost at once. He called on Ramírez to explain. The General, instead of explaining, and instead of accepting the Radical candidacy, decided to strike against Castillo and forcibly take power. His hand was forced, and the only alternative was resignation. The coup, as everyone knows, was easy, popular and successful, and the rotten and thoroughly disliked Castillo government fell almost without a push. For a few dizzy weeks the Argentine people thought that their troubles were over and that they had a popular government at last. Ramírez made a clean sweep of venal office holders, began investigations of all the foreign concessions, lowered rents and food prices, and made pronouncements in favor of democracy and coöperation with the Allies.
The failure of the Ramirez government to live up to its promises is too well-known to need repeating. Gradually it has turned to the extreme nationalist right for support, and coincidentally has moved from popularity to unpopularity. Its investigations have become muddled, government functions have been tied into a knot by the well-meaning intervention of military men who know nothing about politics, and it has made one diplomatic blunder which may cost it its life. That was the note of Admiral Storni to Secretary of State Cordell Hull. The Hull reply, which was one of the most calculated slaps-in-the-face in diplomatic history, immeasurably weakened the Ramírez government. At the moment it has lost its cabinet members of most prestige, and is wobbly, uncertain and unpopular. Worse, it is laughed at by the Argentines. Even Castillo was not held in as open contempt as are the militares.
One thing seems certain, and that is that there are great political changes ahead. The June revolution may have ushered in only an ephemeral régime, but it broke the almost unbearable paralysis of will that seemed to hold the Argentine people powerless to act. Opposition leadership is as uncertain as ever. The Radicals are tacitly supporting Ramirez in the forlorn hope that in some miraculous way, and without effort on their part, they will inherit his revolution. But the Radical Party, like similar parties in Europe, has lost its reason for being. It no longer represents any dynamic economic or political interest. The dead hand of the Conservative agricultural interests seems to have been pried loose at last. That much the Ramirez coup accomplished at any rate.
And for the future? The great political question is not: Will Ramirez last? It is: Who will take his place? Perhaps Argentina will create an industrialist-protectionist party, analogous to the Republican Party of the American nineteenth century, to mold national policies to suit new interests. Perhaps it will create a working class party to speak for the wage-earners. For the moment there is only a political vacuum, and the attempts of military men to fill it are vain. Some day, from somewhere, the solution will come. It will mark a fundamental change. This change will originate among young men and in a class that is moving forward, not one that is clinging desperately to the past. The outcome of the world conflict will affect its course profoundly. The Argentines themselves see this. Perhaps this in part explains the deep passivity in which they have been waiting.