SCRIPT - US Strategy in Latin America, 1939 – 1949 (24/03/2019)

US Strategy in Latin America, 1939 – 1949

Introduction

This video will be about US strategy towards Latin America from 1939 to 1949, covering policy towards the Caribbean and South America during the ‘Good Neighbor’ Era and World War II. To prepare this side theater for the broader conflict, the US made use of a host of policy instruments: not just traditional political-military power, but geoeconomic and cultural diplomacy as well.

 

US Strategic Goals

In the most general sense, during this period the US wanted to defend and extend its hegemonic position in Latin America. By the early 1900s, it had obtained enough power to enforce the Monroe Doctrine and become the dominant political influence in the region. But this influence seemed under threat by the 1930s, and in any case, Europe continued to be a powerful cultural and economic force.

As World War II loomed, the US viewed the Axis powers, in particular Germany, as the region’s main threat, especially after the Fall of France in June 1940. Only two routes existed to invade the US, and one of them was through Latin America.

And in the other direction, Latin America could also be a key logistics corridor for US aid, especially over the winter when North Atlantic storms delayed transport. The Allies also needed Latin America for key materials like rubber, quartz, platinum, and quinine, a reliance heightened after the loss of the Dutch East Indies to Japan.

More specifically, the US focused on two strategic positions. The first was the Panama Canal, which let the US shift naval assets efficiently in response to Hemispheric threats. Canal security would require coordination across multiple territories, encompassing the Caribbean, the northern half of South America, and the Eastern Pacific.

The second was Northeastern Brazil, whose proximity to West Africa made it both a bottleneck for Axis invasion and Allied logistics. Defending this region meant dealing with Brazil, and by extension, Brazil’s internal problems and external relations.

US Strategic Threats

Arrayed against US strategic goals were a number of overt, covert and latent threats. Given what we know now about Axis priorities and capabilities, many of these threats might seem ludicrous; but it’s important to remember that had these plots succeeded, the damage done to the Allied cause could have been substantial.

The biggest threat was Axis control of the region’s strategic positions, not an idle fear following Vichy France’s control of West Africa. The US did not believe Latin Americans could repel an invasion, especially not a long-range bomber strike which could cripple airfields, ports or even the Canal without meeting significant resistance.

Subterfuge was another fear, though in reality the Axis gave it a low priority. The Germans had sabotaged the US in World War I, and the US constantly feared Axis involvement behind coups from Chile to Brazil to the Dominican Republic.

But most of the time, it was Latin American states that were the obstacle to US goals. Now, no state – not even Argentina – actively collaborated with the Axis. But just by following their own interests, Latin Americans threatened to overstretch and complicate US strategy.

The main issue was neutralism. Latin Americans did not view the Axis as an immediate threat and did not want to be its targets. Instead, as neutrals they hoped to get as much from both sides as possible, especially industrial and military assistance. But clearly, the US had other priorities and could not afford to accept every regional demand.

The US also had to deal with existing rivalries. Brazil, for example, would not garrison its Northeast, because all its troops were needed in the South against Argentina. Likewise, disputes between Peru and Ecuador, and between Peru, Bolivia, and Chile threatened to wreck inter-American cooperation to the benefit of the Axis.

Lastly, there was also domestic instability, as weak central governments faced economic hardships after the loss of European markets with the outbreak of war.

All these threats were underpinned by the Axis presence in Latin America. Radio Berlin targeted the 1.5m ethnic Germans in the region, and Francoist Spain similarly reached out to the Spanish-speaking elite.

Ethnic Germans and Italians also contributed significantly to local economies: Germans were responsible for 80% of Guatemala’s coffee exports, and German and Italian airlines, some still piloted by reservists, flew local routes

These businesses not only drove links between Latin America and the Axis, but were also of practical wartime use. German firms, for example, agreed to patch up Graf Spee in Montevideo, Uruguay, potentially extending the life of a ship that had tied down 8 Allied naval groups. The use of airliners for paradrop or bomb strikes was even more worrisome.

But the other side of Axis penetration was Latin American dislike of US dominance; and overcoming this would be an unspoken task for US strategy.

Pre-1939: Intervention and Indifference

From the 1904 to 1928, US strategy towards Latin America was guided by ‘Big Stick Diplomacy’, after President Theodore Roosevelt’s quip of ‘speaking softly and carrying a big stick’. Many Caribbean states were essentially bankrupt by this time, and the US feared that their European creditors might demand naval bases near the Panama Canal as payment. Big Stick Diplomacy was therefore a form of receivership, where the US would invade, organize debt repayment, and keep the Europeans away.

President Taft would then introduce ‘Dollar Diplomacy’, where Caribbean economies would turn to the US and not Europe, allowing firms like Standard Oil and United Fruit to expand throughout the region. But US intervention continued despite Europe’s exhaustion after World War I, with President Wilson now intervening to ‘defend democracy’ and US interests.

Seeking to calm anti-US sentiment, President Hoover first rejected US intervention in 1928, and public support for foreign wars collapsed with the Great Depression a year later. President Franklin Delano Roosevelt would officially reject intervention in 1936, by which time the US was already leaving Nicaragua and Haiti, and ending its protectorates over Cuba and Panama.

These actions were framed as the beginning of a ‘Good Neighbor Policy’ towards Latin America; but in reality, at this point it was less policy and more lack of policy. The US, dealing with its own economic crisis, had no desire to even appear involved in Latin American affairs.

But this was not really what Latin Americans wanted either. What they wanted was for US hegemony to contribute positively to their national goals. Democracy and liberty were appealing ideals, but the real desire was industrial modernity, prosperity, and economic independence.

This was not what the US offered. Instead, whatever benefits it might have had from shelving Big Stick Diplomacy were wasted thanks to its economic policy, which in its defense of US interests seemed to keep the region down as a set of agricultural ‘banana republics’.

In reality, of course, the US priority was on protecting its own industry. But the results of raising import tariffs in 1930 was to wreck economies from Cuba to Chile, now dependent on the US market. The US would only lower tariffs if Latin Americans did the same for US goods, which would mean drowning local industries under a wave of cheap US imports. Most refused.

Likewise, when Bolivia and Mexico nationalized US oil companies in 1937 and 38, the US punished them with severe economic boycotts.

Even in the one sector where US goods were definitely welcomed, US politics would throw up its own barriers. Neutrality Acts throughout the 1930s would block US arms exports to Latin America, minimizing US influence over regional militaries.

If the US would not provide what Latin Americans wanted, then they were perfectly happy to turn elsewhere. Unfortunately for the US, that would turn out to be the Axis.

In contrast to US indifference, fascist Italy, Germany and Spain marketed their ideology as an alternative for Latin America, combining modernity, social unity, conservative Catholicism, and even moderate social redistribution as a route to national greatness.

Investing in regional media and especially radio infrastructure, fascistic ideologies drew in a wide swathe of Latin American elites, from Caribbean dictators to Peruvian generals to Brazil’s Estado Novo under President Getulio Vargas.

Most important, Germany in particular also seemed willing to deliver on fascism’s promises. Its aski barter system let Latin Americans trade raw materials for advanced machines and weapons, often at a subsidized rate. Between 1932 and 39, Latin America quadrupled the percentage of goods it imported from Germany, and German firms came to kickstart Latin American industry.

It’s easy to dismiss Axis efforts here because the chances of a political alliance were never high; but that was not the objective of Axis strategy. In some areas there were immediate benefits, like when Germany bought all of Mexico’s boycotted oil exports in 1939 to build a 6-month war reserve.

But the real goal was to keep the region neutral and out of the coming war: by linking the Axis with modernity and might, by nurturing pro-Axis blocs especially within the military, and by promoting sympathy within the broader populace. The benefit to the Axis was not in allying with Latin America, but in stalling the US attempt to do the same.

1939-1941: Hemispheric Defense

After German aggression revealed itself at the Munich Conference, the US finally saw the need to re-engage with Latin America in order to achieve ‘Hemispheric Defense’. This was in line with self-interest: US security would only be threatened if the Axis captured strategic points in other American states, so cooperation with Latin American countries was essential.

And there was cooperation, to an extent. In 1938, regional states agreed to resist and ask the US for help in the event of Axis invasion, and in 1939 a neutral zone was established around most of the Hemisphere. An inter-American mutual defense pact was declared after the Fall of France in June 1940, and Brazil along with the Caribbean states agreed to let the US Navy patrol their coasts.

But that was about as much neutrality Latin Americans were prepared to voluntarily give up. They did not want the US dictating their political, diplomatic or military policy. They especially did not want to see US troops on their territory. And at the extreme end – Argentina – they rejected US leadership entirely and proposed a South American defense pact that would guard the continent itself.

Latin American states offered the US variations on the following deal: instead of US forces, Latin Americans would defend the continent according to US wishes – provided that the US modernize their militaries. Their requests were considerable: Brazil’s bill in June 1940, for example, was 250m dollars, or 30% of the US Army’s own budget!

That said, money was not the problem: Congress easily approved half a billion dollars for Latin American loans in 1940, and would do so again for Lend-Lease in 1941. The problem was that the US had already decided that its war production would first go towards its own rearmament, and then as aid to the UK. Growing the US Army from 230k in late 40 to 1.4m by mid-41 would consume all production until 1942, and the agreement to send half of US munitions production to the UK pushed this date back even further.

And this was because of a basic geostrategic assessment that underlay Hemispheric Defense and US strategy towards Latin America: the Americas would probably be safe, so long as Britain continued to box Axis surface fleets within the North and Mediterranean Seas. The key was to keep Britain alive through the Battle of the Atlantic, whether via the Destroyer-Bases Agreement, Lend-Lease or undeclared anti-sub warfare.

Even without Britain, the US was to be the one doing the heavy lifting against Axis invasion. All the Latin Americans needed was enough equipment to hold out until help arrived.

It’s important to remember that this assessment was still, on some level, a well-informed gamble. De-prioritizing Latin America meant giving up military cooperation with the region, especially Brazil. So should Britain actually be knocked out of the war, the region would be woefully unprepared and uncoordinated to meet an Axis challenge.

Even as late as mid-41, the US Army could only deploy 1 division without air cover in response to an invasion of Northeast Brazil, and that was assuming the Brazilians actually did call for help instead of defecting, as the US feared might happen if the Axis launched a coup at the same time. In any case, British seapower would be of little help against an Axis lightning strike or bombing raid against the Panama Canal.

So US strategy had to find a way to prepare and nudge the region towards Hemispheric Defense, without drawing on US production or requiring official military cooperation.

There was always force as a last resort. When President Arias of Panama, an Axis sympathizer in US eyes, stalled defense plans for the Canal, the US ousted him in a coup in late 1941. The US was prepared to invade Brazil and Vichy France’s Caribbean colonies if either threatened to fall into Axis hands. Latin American military negotiators were to be reminded that ‘the US will defend the Western Hemisphere from the Axis, with or without Latin American cooperation’.

Still, the US wanted Latin American cooperation, and was prepared to deploy a variety of tools to get it. It freed as much Army surplus as it could under the Neutrality Laws, it lent money under the guise of ‘secret military expenditure’, and in one case, even shipped German weapons bought by Brazil past the British blockade.

The US also tried entangling Brazil in Allied operations, by inviting it to occupy Dutch Surinam. It even considered using legal sleight of hand, replacing US Navy planes with US Army ones and slowly working its way up to boots on Brazilian ground.

Failing cooperation, the US could at least use geoeconomics to bypass some aspects of Latin American neutralism. Pan-American Airways would prove to be a very useful tool in this regard: against Axis airlines, instead of asking regional governments to shut them down, the US instead funded Pan-Am to set up rival routes, undercut the competition, and finally buy them out and fire all ethnically-suspect personnel.

The US would also pay Pan-Am to build and upgrade airfields under the guise of civilian use. Of course, these airfields would be tailored to military specifications, in particular ones that would allow the US to rapidly send a force to Northeast Brazil.

Last but not least, the US also began an intensive effort at public diplomacy, headed by the Office of Inter-American Affairs or OIAA. OIAA aimed to fight ‘psychological warfare’ against two concepts that underpinned neutralism. The first was the so-called ‘intellectual imperialism’ of fascist ideas. The second was the idea that Latin American interests were separate from US interests.

OIAA’s response would come in the form of the ‘American Way of Life’, ‘American’ here meaning pan-American. The ‘American Way of Life’ was modern, free, and middle-class prosperous, and Latin Americans had as much right to enjoy it as North Americans. Most importantly, the US was here to help them achieve it.

Mobilizing US media from journalism to Hollywood, OIAA set up a network of magazines, radio broadcasts and movie screenings throughout the region, backed by US advertising which would fund up to 40% of OIAA-approved broadcasters. The masses were treated to radio stars and Disney cartoons, while the elite got edutainment programs and glossy magazines – all talking about the ‘American Way of Life’.

Historians have praised OIAA as a particularly altruistic episode in US foreign policy, but we must remember that this program served a strategic purpose. That purpose was to reduce support for neutralism and increase it for the Allied cause, and to achieve it OIAA pandered and pleased rather than patronized and lectured. Most notably, when Orson Welles’ documentary on poor and black Brazilians angered his host, he was immediately sent packing.

We should also be cautious about calling OIAA a total success. Certainly it raised Latin American goodwill towards the US to levels never seen before or since, but that goodwill did not end neutralism.

Despite that, neutralist Latin America still contributed to US Hemispheric Defense. Army cooperation remained a stumbling block, but many minor ways – airfield construction, naval cooperation and counterespionage – regional states quietly assisted US actions, even behind the backs of their own citizens. Most importantly, they did not create additional problems for the US, most notably in rejecting Argentina’s proposal for a neutralist bloc.

1942-1944: Supporting Allied Offense

Despite US efforts, Latin American neutralism continued after Pearl Harbor and the entry of the US into the War. Most regional states, except Chile and Argentina, agreed to break ties with the Axis, but only Peru out of the non-Caribbean states immediately declared war. For Mexico and Brazil, German U-Boat warfare would actually make that decision for them, bringing them into the Allied camp by mid-42.

The US was still unable to supply material to Latin America throughout 1942, which limited the value of military cooperation in Hemispheric Defense. In any case, the Allied capture of North and West Africa in November definitively removed any direct Axis threat to Latin America. The US was moving beyond Hemispheric Defense towards a Europe-first offense, and Latin American troops weren’t needed for that. Ironically, only now would US arms start flowing to the region in earnest.

While Latin America played a role in defending the Panama Canal and anti-sub warfare, the key role for the region was as a conduit for Allied logistics. As soon as Brazil entered the War, its Northeastern ports were handling US tanks destined for El Alamein. Airfields designed for Hemispheric Defense now funneled US equipment to the Western, Eastern, Indian and Chinese Theaters, with Natal-Parnamirim, the largest overseas US airbase, handling fifteen hundred planes, or about ten air groups a month in 1944, meaning one plane every three minutes.

US strategy therefore had to ensure that this role would not be disrupted. Top of the agenda were the regional disputes, which were alive and kicking: Peru had even gone to war with Ecuador in July 41, threatening US efforts to defend the Pacific end of the Panama Canal.

The US position was simple: disputes had to be frozen immediately regardless of right, and Ecuador was pressured to admit defeat despite Peru being the invader.

Still, US strategy saw some value in keeping regional states wary of each other. After their war, for example, Ecuador and Peru hurried to approve US base requests to gain favor. In the same way, the US directed Lend-Lease towards Chile’s old rivals Bolivia and Peru, eventually pressuring the country to cut ties with the Axis in 1943.

Another worry was regional economic destabilization. Inter-American economic committees had been established as early as 1939 to replace blocked European markets with the US, but the situation turned critical with German U-Boat warfare. In 1942, 75% of Brazil’s merchant fleet and 38% of Venezuela’s oil revenue went to the bottom of the sea, and US rationing of fuel and other materials added to the economic pressure. Between 1939 to 1945, Brazil’s cost of living rose by 25%; El Salvador’s by 100%, and Nicaragua’s by 700%.

The US answer was to buy up Latin American exports. This was already the case for some strategic materials, notably the entire supply of Colombian platinum. Now the US would do the same for Central American coffee, Caribbean crops, Peruvian cotton and Chilean nitrates, paying above-market rates and distributing them around the region where needed. The US also encouraged substitutes where possible, for example, Cuban rum instead of European liquor.

US strategy also understood that it needed to make good on OIAA promises by adjusting its economic relationship with Latin America. It stopped backing Big Oil, forcing them to accept Mexico’s nationalization and lending money to pay for compensation. It also agreed to support Latin America’s industrial development, especially in Brazil, which absorbed 75% of all Lend-Lease to the region. The US took over German contracts to develop a Brazilian steel industry, and OIAA itself launched a public health and infrastructure campaign for the Amazon, hoping to improve Brazilian production of local rubber. The bracero program provided agricultural employment in the US for Mexican laborers.

Still, it’s important to remember that the overall result of US efforts still increased its dominance over Latin America, especially in the economic and cultural field. Pan-Am, for example, got rid of its local competitors, while regional states became even more dependent on the US market. OIAA advertising created demand for American consumer products, while shifting Latin American culture in the US’ direction.

This is important when considering the most controversial aspects of US strategy. In January 1942, the US issued a List of Blocked Nationals, banning US firms from dealing with what it considered ‘Axis-linked’ individuals. The list was not checked and was probably more a list of US competitors than actual Nazis, but the US asked Latin America to enact similar bans anyway.

The US soon asked regional states to deport ethnic Germans and Japanese to US detention camps. In reality, the regional implementation of these demands was so haphazard that it’s difficult to imagine that they actually hurt the Axis. Instead, especially in Central American dictatorships which happily seized ethnic German property, the result was the removal of US competitors.

All in all, US strategy from 1942-44 did what it needed to, which was to keep Latin America stable as a corridor for Allied logistics. The US no longer needed the military participation of regional troops, and the later exploits of the Brazilian Expeditionary Force and the Mexican Aztec Eagles were more due to their countries’ desire to have a say in the peace.

We should also note that US strategy, despite OIAA altruism, also enhanced the country’s economic and cultural position in Latin America, displacing European influence and in some sectors reaching almost monopolistic dominance. This was not necessarily a bad outcome for either side, but it would depend on US policy after the end of the War.

1944-1947: Return to Indifference

As the US prepared to assume global responsibilities with the end of World War II, its strategy towards Latin America began to lose focus. The region’s wartime services were no longer needed, and the incoming Truman Administration brought in new men less aware of the region’s contribution to the War. Latin Americans didn’t help their case by withdrawing from global affairs, especially Brazil’s decision not to join in the occupation of Austria.

But while US interest in Latin America was waning, Latin American expectations of continued US aid remained strong – and here we have to ask whether OIAA propaganda oversold the US case. Demanding the fulfillment of the ‘American Way of Life’, Latin Americans ousted dictators from Guatemala to Brazil, electing governments that promised prosperity and economic redistribution underwritten by US help.

That help would not come. US demobilization after 1945 meant the end of Lend-Lease, OIAA and even loans to Latin America. Keen to exploit the economic position it gained over World War II, the US returned to prewar economic diplomacy and again started demanding Latin Americans open their markets. Pan-American solidarity under the Organization of American States and the Rio Treaty defense pact had little to say regarding economic development.

Worse still, when large-scale US aid resumed with the beginning of the Cold War, it was clear that Latin America would be put behind even former Axis powers. Regional hopes for a Marshall Plan for Latin America would be dashed, especially for Brazil, which hoped its wartime cooperation would be the start of a ‘special relationship’, but instead found itself lumped with the other states and even uncooperative Argentina. Regional states would vent their frustration by refusing to invoke the Rio Treaty during the Korean War, with Colombia the only state to send troops upon US request.

But US indifference was at least better than US hostility. This was the situation Argentina would find itself in by the end of the War, and here we can see how US anti-Axis strategy would begin to morph into its notorious anti-Communist strategy.

Argentina was actually a ‘closeted member’ of the Allies. Despite rejecting US leadership, flirting with fascism and allowing Axis smuggling and espionage, the country’s major contribution to the War was, in fact, supplying meat to the UK, starting from Day 1 and at favorable terms.

During the period of Hemispheric Defense from 1939 to 42, the US did not want Argentina to make trouble for Brazil, and so tolerated its behavior and gave it aid. That changed in 1943, when the Axis threat to the region had passed. The US now upped the pressure: stopping aid, refusing to recognize the new government, arming Brazil, and via OIAA, painting the country as an Axis menace to the free world.

In 1945, Argentina finally caved and declared war on the Axis, in return for a seat at the United Nations. The US saw this as an opportunity to reconcile, only now to fall victim to its own propaganda, as the public protested against dealing with a ‘Nazi’ state. Resetting relations with Argentina would require much political capital, capital that would be better used dealing with problems in more important parts of the world.

So the US surrendered control over Argentine policy, bowing to public opinion and re-demanding Argentina ‘fully reject the Axis’, without defining what ‘full rejection’ actually meant. Inevitably, this meant that Argentine concessions were only met with goalpost-moving and harsher punishments, an uncontrolled escalation that meant by 1946, the US was blockading and destabilizing the country to achieve regime change.

The culmination of this effort was naked US interference in the 1946 Argentine election, where it published a ‘Blue Book’ smearing Juan Peron as an Axis stooge. Naturally, this attempt backfired and Peron became President by a narrow margin.

Ironically, out of all the regional states, the US could probably least afford to offend Argentina. The country remained a crucial food supplier for postwar Europe, and the US quickly reasserted policy control in 1947, after Britain warned that Argentine export retaliation would boost Communism throughout Europe.

But the precedent had been set. US strategy now had a global focus, and it thought it could delegate policy when it came to its secure, unimportant backyard of Latin America. In 1954, Guatemala began to curb United Fruit’s dominance in the name of prosperity and economic freedom. US inattention would again result in uncontrolled escalation, and ultimately a CIA coup in the name of anti-Communism.

This action would end the era of ‘Good Neighbor Diplomacy’, and a new US strategy for Latin America would be made to meet the Soviet challenge.

Conclusion

In first defending, then uniting Latin America against the Axis, US strategy from 1939-49 focused on two general directions. First was to undo the results of decades of intervention and neglect, and second was to sell a positive vision of US regional hegemony. To achieve this, the US used a variety of political, economic and cultural tools, centered around the Good Neighbor ideal of inter-American cooperation.

As we have seen, US strategy was at most a qualified success. The Western Hemisphere would ultimately be defended not so much by inter-American cooperation, but by British seapower supported by US resources. US efforts never fully overcame Latin American neutralism until their contribution became unimportant. And OIAA’s success in generating goodwill masked a dangerous overselling of US altruism. But in the end, Latin America did not obstruct Allied strategy, and that is something whose value should not be underestimated.

Thanks for watching the video, and please like and subscribe! If you have any questions, I’ll be happy to answer them in the comments section.