Courtesy Reuters

Latin American Oil in War and Peace

WITH most of the Far East already fallen to the enemy and the Caucasus and Middle East in danger, Latin America is the only important oil producing area outside the United States not yet seriously threatened by the war. Its importance is enhanced by the fact that supply lines from Latin America to the major theaters of war are shorter than those from the United States. Curaçao and Aruba -- the hugh export bases in the Dutch West Indies -- are 800 miles nearer London than are the oil ports of Texas. Close collaboration between the two Americas in supplying oil to the United Nations is therefore a vital strategic necessity.

This collaboration is imperiled by a smoldering antagonism between the various Latin American governments and the oil companies which operate in their territories.[i] No longer is the huge empire of oil autonomous in Latin America. In most countries the companies are subject to strict government control; in some of them competing state oil companies have been established; and the Bolivian and Mexican expropriations in 1936 and 1938, respectively, indicated the possibility of total expulsion. The United States Government took a hand in both of the cases of expropriation, and the conflicts were settled within a framework of broader negotiations. Nevertheless, the principle of expropriation with indemnification was upheld, and the owners of the fields were not permitted to influence the general settlements. Many Latin Americans believe that a further decline in the influence of "absentee oil capital" is inevitable. So far the movement has not made marked progress in the main producing countries of northern South America -- Venezuela, Colombia and Peru. Everywhere, however, there is growing tension. Both sides have grievances, and the political and economic interests at stake are large.

How large the stakes may be is shown by the geological surveys of the past decade. These seem to indicate that the petroleum resources of the rest of the world are much greater than those of the United States, and

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