Strangulation by Red Tape

All that Latin America wanted from its big Good Neighbor Uncle Sam last week was a little more quid for its quo. Latin America had just cause for complaint: while the American republics were shipping to the U.S. nearly all of their strategic raw materials, the U.S. had so far failed to send them enough manufactured goods to get along.

Behind the republics was a record of Good Neighborliness that includes parallel export control systems (in some instances more stringent than the U.S. parent system); an enforced blacklist (U.S.-drafted) of Axis-influenced firms; 80 to 100 Axis ships immobilized in Latin American ports for hemisphere use; agreements whereby the U.S. gets first call (literally an airtight monopoly) on vast supplies of strategic materials.

In return they have asked for Lend-Lease assistance and sufficient processed raw materials and manufactured goods to maintain an internal economy hard hit by war-closed foreign markets. The U.S. has supplied some of the items in small volume, others in dribbles, others not at all.

Southbound commerce is strangled by red tape. Priority ratings for Latin America sometimes have to be cleared by six to ten Government agencies; refusals come easy to officials worried about shortages at home. Nearly 50% of U.S. exports to Latin America, until last month, were subject to individual licenses by Brigadier General Russell L. Maxwell, Administrator of Export Control, which involved more red tape. Many a U.S. manufacturer, with domestic markets booming, stopped trying to sell in Latin American markets, considered them not worth the red tape and risk.

Latin America ships to the U.S. far more strategic materials than it wants back in finished goods. It provides the U.S. with 36% of its refined copper, wants back only about 6% of the U.S. supply. It furnishes 25% of U.S. zinc, wants 8%. Of lead it supplies 25%, wants 9%. It has been getting about one-fifth of its needs in these materials. It supplies the U.S. with raw aluminum, mercury, tungsten and antimony, but can get none back in manufactures.

Last month the Export Control Office was moved into Good Neighborly Vice President Henry Wallace's Economic Defense Board. That helped to centralize U.S. export machinery. But by last week, in spite of persistent pestering by Coordinator Nelson Rockefeller and some gentle prodding by the State Department, little had been done to remove priority red tape. Latin America was losing patience. So were those U.S. officials who had worked long and hard to be Good Neighbors. Said one: "If this red tape isn't broken by the end of October, hemisphere defense is going to start getting sour."

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