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12/20/1954 - Peruvian Economy and Foreign Capital by William H. MacLeish

NOT FOR PUBLICATION INSTITUTE OF CURRENT WORLD AFFAIRS WH Casilla Peruvian Economy Arequipa Per Foreign Capital December NLr Walter S Rogers Institute Current World Affairs Fifth Avenue New Yozk New York Dear Ir Rogers It until I several articles Jist United States economic policy in_the International Ed ition New York Times Time magazine I realized importance pamphlet given Dr _Jose Bustamante Rivero after interview Wh utitled La gconoma Peruana E1 Capital Extranjero pamphlet reality lication speech given Dr Ugarteche during monies marking opening academic April Univrsidad Nacional San Agustin ArequiAa It remembered importance University Latin America political educational New forms itical economic thought latino universities volutions start within their walls The studen taken vChole poarful political group As William Lytle Schurz Latin America E P Dutton Co New York Student Lain American universities ifferent United States University buildings usually located older crowd A campus extra curricular student activ ities which center around American universities almost tirely lacking On other students disposed politically minded As often thorn political pvers Universities someties closed Havana during ohado regime order check political activities students sometimes urged lieral minded professors In Argentina Pern government employed handed methods purging universities professors suspected hostile policies The students given monstrations protests several times precipitated itical crises against goverznent The political history ublics replete examples their revolutionary activities martyrdoms resulted their reckless audacity In Arequipa revolutions certain students San Agustin played ortant One certainly passive audience The importance Dr Polar speech cannot underestimated Although revolutionary political terms represent attack customary complacency which afflicts country I quite Dr Polar gifted oratory coupled factsich doled haven awake students reality The December issue Time agazine featured spread entitled Front Cold Last architect friend Herman Bedoya Fora Dr Polar In addition being professor Peruvian Culture San Agustin Polar Secretary Chamber Commerce lawyer British Ferrocarriles Sur Per When office closin meeting Chamber Comm When ushered office hever relaxed chair became typical college professor The office piled pamphlets reports books there knowled about place Professor Polar first clear several questions which arisen during translation article When I asked clarification event Polar would about apers through reports answers I facts please favor askin dates technical questions It would answer The cunversation drifted around problem Peruvian economy I asked Polar thought bottom country difficulties I would satisfactory stabilization currency ofthematter We dangerous ition unable maintain value If Government keeps issuing paper money without sufficien serves behind never solve problem I asked thought change control U S Con gress would Latin America I enough expert prediction Your politics comused issues McCarthyism Communism politicians befuddled You understand cCarthy NAcCarthyism They reactionary Dr Polar This I simply realist I tried articles speeches accurate picture economic social conditions country I tried audiences necessity becominG pioneers instead telling themselves potentially country In U S tpioneers Nature their Here Nature against It rains where water needed selva Coast remains desert You never succeed improvin Per Get conquer Nature I asked Dr Polar impressions recent economic conference Petropolis He thoughtt impor development conference invest foreign directly private enterprises rather practice lending funds cehtral Governent The Government liable middleman I Chilean inter American Go through A would larer countries wouldeconomically dominate smaller nations As leaving Dr Polar turned There misunderstanding concerninG United States The relationship between Latin America country deterior ating since Good NeiGhbor policy dropped People understand United States keeps tariff policies loans money dictatorships It extremely difficult American explain these things people believe G S talkinG acting Sincerely William E acgeish PERUVIAN ECON0 AND FOREIGN CAPITAT MRIO POLAR UGARTECHE A years rostrum I Per unknown entityand needed approach allty orderto advance toward future confident It doubtless advancing times countr young But doubtless Jean Fourasti plane flying through without radio radar We aremoving impact against wingsf clear forces which along capacity machine stops location landing field which searching Our people mature enlightened In other words their problems their possibilities To strive develop consclousness highest portance University For eason Recto klndness deliver Discuso Orden inaugural monies present academic I accepted offer responsibilltis which implies I believed professor Peruvian Culture exPOund public several observations which I accumulated during years observations connection problem culture concerning economy Per Impor tance advantages dangers foreign capital I believe error consider problem strictly economic I contrary enormous cultural importance Culture arise exclusively Impasloned conflict between historic period surprising development conunications interdependence subjected other periods powerful external Influences which continually modifying original structure accentuating fundamental racial mixture being All modern universal culture tremendous fascination explosive charge contradictions cercises powerful spiritual pressure Cultural process The noble corse transitory perman oecumenical values lready influencing youth culture greater greater extent Peruvianculture subjected spiritual ideological influences important economic influences My purpose discussion examine ctual economic potentiality measure possible course portance these inZluences For culture genuous young girls believe adornment Culture essence people fundamentally cultural problems After introduction which I thought indis pensable justification incursions professor Peruvian Culture field economy I going brief evaluation economy Per oblig atory introduction problem foreign capital We always fabulously At least generstion educated under concept The Incas which worldwide large responsible spite chroniclers period described great clarity simplest among Indians Inca epoch little roasted boiled potatoes served sustain family during whole Work production which would appear insufficient enough growing population cause paternalistic absolute administration scrupulously careful adapt necessities possibilities harvest The curious thing notwithstanding ancient historians notwithstanding level among people which position taking appearances incontrovertible truth I slize beginning independence necessary stimulate development proud national science sensible utilize lever pariotlc spirit But gained lativ national maturity eistence serves demagoguery Anyone truth about country which ususl belle common Why wealth great people especially those Andes suppot lowest levels world badly The swers these questions believers themyth deuagoguery Theefoe I believe destroy legend fabulous wealth fundamentally ideas concerning potential riches If persist looking reality oonstruck onquest future cannot build spitefully neglect which after arduous struggle weaken sirit initiative I convi secure better tomorrow people treading ground bUilding founds tions fragile myths Our people capable rising above themselves dominating stlmulsted spirit pioneer instead sentimentality dreamer For nations thinking luxury nstions tinklng necessity W concrete which measure wealth country Perd aromd hundred thousand square kilometers equiv alent Italy islands Frs Belgium Holland E nglsnd Irelsnd Iceland In thins enormous inhabitants according figures Direcci6n Nacional Estadstica while forementioned European countries similar total shelter lation O00 O00 inhabitants The comparison serves appreciate territory small amount exploited wealth therein We reach conclusion considerstlon Europeans average standard infinitely superior million inhab itants country To Understsn apparent paradox million people 1400000 square kilometers being poorer million similar necessary account teritory fundamentally geographers anecdmene inhabitable inexploitsble while occupied_by aforementioned European peoples almost completely ecmmene habltsble exploitable The major itory represented deserts abrupt nomutins penetrable jungles useful lands fraction total The census revealed country essen tially sgrsrisn ecause major source wealth because msjor Ity people their living means agriculture The Direcci6n Nscional Estsdsticas calculated people living lqowever total amount useful Per agrarian point represents total country From figure excluded fallowlsnd ectress natural psstos siera This means would possible under cultivation Department ioquegua smallest Perd remaining lacks immediate agricultural significance This explains Peruvian farmers average living Concrete6facts reveal depth problem The engin Derteano study published National Agrrlan Society proceeded divide estimate total income received agriculture total agrarian population arriv average capita income soles A lower figure would difficult imagine According culations average income farmers taken regions expressive In coastal region average soles slerra O0 soles selva soles There great difference tureen coast other regions And though average income coastal farmezs still quite relation sierra This explains development roads resulting tremendous migration sierra coast intensified larger pects profit offered cities mines highways The reduced cultivation relation agric ultural population explains average income farmers But reveal gravity problem The tivated relation population Per hectrea inhabitant which country insufficlent agricultural prodcti6n produce sufficient quantity satisfy needs people We deficie especially wheat meats oleaginous materials This explains growing quantit foodstuffs In imported metric foodstuffS while importation articles risen metrc Our defic increases angerous Then populs growing O00 inhabitants without proportionate increase amount In order maintain current relationship between population tsking account growth former would necessary increase amount tivated ctreas basically In crease hectrea The being explains progressive increase production deficit gowth imported foodstuffs Formerly importation would divlsas arising exportation materials cotton sugar wools But those products international markets problem scarcity becomes sharper There countries those Europe which compensate eakness their agricultural industry means otSer resources This unfortunately 5appened country Our industrial potential still altSoug5 shoing promising growth Lima quipa where electricity motive power because purchasing Dower people meager TSe considerations wSic5 shall explain later depends factors outside control However influences incipient manufacturing industry PerG mining co2erce rising average capita income country though Tqe Economlc Studv reached stisfactor level Latin America published CEPAL C0mm iSSin United Nations Economic Social Council calculated national income Per US Keeping population Perd change effect S dollar calculate average income US S person during An average income reveals actual wealth small indeed comparison other neighboring countries Thus average income Chile US person Brazil US Colombia US ccording stimations CEPAL In foregoing facts I consider contlnution fabulous wealth mockery truth Other information confirms condition At Conference Hot Springs kilos annum fixed minimum consumption required human ccord Divisi6n Estudios Econ6micos SCIPA erage consumption person annum Perd kilos This means consumption inhabitant increased order satisfy minimum recommended Hot Springs All reveals surprising clrity fundsmental pre0ccuption Perd should augmenting production We should realize production augmented progress really satisfactory manner bitter struggle better distribution income The average income S citizen quoted CEPL figures brings conclusion mathematically equal distribution profits solve basic problem poverty caused sufficient production capitl It recognize standard living substantially sectors urban population years But observe situation improvemen large cities circles businessmen employees workers elevation standr living noted among population among agrarian poletar especially among great msses Indians The migratory influxes Andes which invading skirts Lima Arequlpa other cities Coastal prospect getting higher wages their inducing Indians leave their homes The result supersaturation populatlons these cities respect means llvll Perd hopes increase roduction consequently economic capacity place herself higher ition among concert nations raise standard living among people terms average However being being impossible Production increased However general apprais economy I bBlieve adverse factors should mentioned topography distance Ours rough difficult country The coast archipelago oases sierra snother archipelago valleys hills gorges The isolation populated determined distances times enorm between topography which impedes struction straight inducing instead development serpentine gradient trails Topography distance count heavily costs production selling prices often possible exploit mines mineral deposits spite cheap because mendous transportation Thus there beautiful interandine valleys being exploited solely primitive methods their inhabitants because horbitant intensive exploitation transportation distant centers consumption Hence building important irrigation I should clarify other neighboring countries developed faster Per because among other things their topography flatlands because their principal centers duction situated great central vlley In spite topogrphy distances possible increas yearly produce Perd Agricultural production insufficient country enlarged opening fields cultivation means irrigation increas nomic zhere possible increase physical It calculated modern adequate technlques possible increase between SO yearly production fields under cultivation progressive grarian calmly studle would favor velopment Dr Fuentes Llguno suggested lecture given Law School Mining production increased minerals And finally industries created existing industries expanded However increase production requires there basic materials water agriculture mineral deposits mining there markets produce labor possible capital invest Our internal market small chasing people There would nonetheless ample market increased national agricultural produce since import cereals oleaginous mateFials I believe there would consumers market large series manufactured articles light industry which nowadays import But heavy industry would justi spite Chimbote Marcona Notwithstanding labor purchasing power country modest expensive Ufactured articles would buyers In addition I think Peruvian industries would position compete foreign companies outside market Thanks techniques production employed large countries articles manufactured which could equalled small industries It would ridiculous think establishing automobile airplane factories Per6 purchasing power among inconsiderable times account whatsoever regions slerra One remember temporary crisis arose short while connection effects importation foreign textile industry necessary raise tariffs order protect national indUstry The industrial development Per6 which refers manufactured goods chasn power people Hence exceptional national certain articles leather foreign market It therefore evident although development manufacturing greet interest inasmuch contributes progress national economy higher wages development cannot unlimited whenever depends exclu sively purchasing power population When talks rapid miraculous progress industrialization paying economics The growth mining industry depends almost exclusive foreign markets The Est West above Korean aused rapid quotations called strategic materials erals quality exploited The easing international tension signing truce Korea caused other prices And although painful world peace would serious economic crisis those South American countries whose incomes holdings principally mining A larger utilization those materials peacetime manufacture would lution However important development mining industry although protected national Code depends fundamentally growth stability markets cannot control I phrase which coined watchword Venezuela years height Hay sembrsr petr6 A prosperity based chance roeri which ruined exhaustion basic materials scientific discovery effective substitutes dangerous prosperity The obtained these South American countries ploitation minerals hydrocarboniferous materials invested utmost arable investment sulting wealth stable evidently permanent The problem labor force necessary growth production serious We eventually there scarcity labor coastal agricultural tricts mines increased program public works intensified But demand labor contributes level machines eventually replace muscles certain regions country eontsi people actually supported present means livelihood Thus while Scot shepherd flock hundred sheep sierra whole family dedicates itself watching animals In reality Per sierra large population surplus which partially As Incas migrations peoples mitimas attracting surplus populations overpopulated Centers preparing Indian We favor immigration qualified foriegners Indi preparation There examples power sslmilatlon techniques treated aborigines The serious problem whole program basic growth national production sufficient capital The national assets small especlslly those capital which im_ediately The index capitalization still Furthermore nation capitalists general timid faint hearted In circles Lima provinces ginning investments However thing savings especially small savings provincials invested estate frequently already existing urban property being doled fracL tions loans mortgsgeable guarantees solve temporary financial difficulties borrowers This popular system investment general lender because growing devaluation receives contract money whose purchasing power reduced One easily deduce there loans guarantees DorPower Then lender chance gaged property nominal after unsuccessful sales But aside beirg timid national economy evidently insufficleDt accomplish production growth The Bancos Fomento Industrial Agrlcola Minero sufficient funds finance amount necessary It cently small savings middle classes being vested stocks bonds large business concerns which reveals certain amount progress But neither movement amount funds ample enough Thus projects calling private enterprise investments found necesssry projects irrigation works electric plans State great cpltalist asked carry through Mowever funds lational Budget usually allotted Support those services already existing because which balance unallotted money never chance revenues taxes customs duties exceed chronic optimism legislators surplus their figures It there ardent desire gress elevstion standard living order satisfy deslre people asked Government irrigation projects electric plants roads hospitals order clamor higher wages Goverzment resorted cours collective reclamtlons course which lways prove successful since general wages without corresponding production results inflation nlysis All clearly reveals necessity increasing ductlon fundamental general progress But national economy insufficient think evitably foreign capital And arrive Gord Knot problem Mny writers class Latin American countries colonial category since great their sources production hands tives rther those foreigners It doubtless influence oreign capital exercised economy Country increases subordination country But evident without foreign italy possibilities obtaining basic mentation production consequently positive standard living We dealing problem which erudeness without euphamisms Shouting slogans going solve problem Sen timental flags without having satisfsCtery results It thinking about magnitude problem start looking practical solutions It could against pinful drsmatic dilemma either mintain reltive pendence resign ourselves level among peoPle sccept greater dependence ntion basiSally improve standsrd population With traditlonl proclivity absolutes consc remnant ancestral divide ourselves supporters opposers another without realizing solutions often compromises based concessions Which conveniently elastic stable I subject which I concerning myself explosively controversial I incontrovertible solution Hozever I press thoughts ability hopes contribution towards better explanation problem I pleasing Ltln American belong society working foreign msters But extreme which found reality exceptions except election speeches public opinion expresses dsslre heroic solutions periods Crisis I believe heroes mrtyrs I blieve thanks there frequently useful galvanizstlohs But I believe heroes andmartyrs hysterical filled passion perchance goodness ingenuous people underdeveloped sense responsibility The subject foreign capital should considered during periods relative should considered Universities though towards ultimate publication among masses deals With problems laborstory since detaied estbiish clrity elements composiin It capital econmy insufficietL resort otside world solve problems inprovee But asking foreign cpital careful Comes conditions fvorab It direct foreign government amortizable privste investment In nother It Indeed extent amrlcano ltlno amricano country Pan American Conference Caracas foreign capital Ib requests depending leftist centralist rightest indefinite characteref govern ments represented The interesting cpital ceming We therefore consider following propositions We careful acquire loans super flcial projects We eceed possibilities pyment firms sustained foreign capital operation since otherwise inflation spoil fruits which those firms harvest We foreign investments leave Perd something money payrolls taxes stimulate reinvestment profits We favor formation mixed enterprises foreign national funds participation possible private savings We careful foreign enterprises circumst ances submit legisl_tion judicial uthorities Perd I I could easily larger exacting conditions By doing however I would track reality I capital national foreign neither moral rather amoral By logic essence follo waters rivers least resistance For reason preference those countries which offer better prospects profit promise ample sntees econo social stability Think about private investmeuts No investor living industrial forced goverrn create sources wealth other countries Therefore underdeveloped countries Foster Dulles attract investments But Latin American cotries accepted called justice countries begin those investme conceding larger larger privileges advantages reduce enlarge profits zhich foreign capital There exists policy among _tates hemisphere cerning foreign investments On contrsry countries guided initiative facilitating istence b_a_t_i_d_o detalle I believe called military jargon In countries proceeding national foreign enterprises It could measure response popular conviction there reasons order which justify It evident however policy areas applied constituted formidable sentimental success found economic failure The workers abandoned shafts mines blaim obtain nationalized perty anged despair desire aareness perhaps temporary collection hopes ucceeded within organization improving quantity their hones which poverty increased The reduction production result fight between little Davids Gol laths latter themselves taken slingstones paralyzed economy those countries ntionalization Their currencies their purchasing power alarming manner which means sooner later poverty increase depth problemv What quite strange these countries demand foreign capital revive their wealth It possible cause strategic reasons obtain great powers contingent specific But doubtful attract foreign investment The surpluses national savings great industrial countries overflot their frontiers follot Jing rivers I mentioned least resistence It probable influx lifegiving capital rescue countries The popularity certain measures dication their success What important thinking passions people satisfy their needs Our countries sufficient power independence venture alone risky economic experiments especially foreign capital needed impulsively shuns retires aggressive measures In contrast other mature utries approved special promulgated statutes foreign investors guaranteeing integrity investments permitting their exportation after reasonable period exempting importation duties capital brought intothe country machinery equipment implements facilitating exportation profits permitting revalorization assets matters concerning taxable goods accord variations exchange guaranteeing raise established rates taxation ithin periods years exonerating frozen prices industries govern Measures aforementioned interference really tempting foreign investor However I lieve loose competition between backward cotries attract capital reduces advantages which these countries could obtain investment It opinion people South America obtain larger advantages foreign succeed ifying their policy concerning foreign invest ments fixing norms handling capital Foreign private vestors respond merely demonst ations hospitality certain proofs Since Latin American countries nificance considered separately logical think their possibilities would infinitely better unified their criteria respect investment policy fixed norms acceptance foreign capital within rational boundaries Think about President Eisen hower nerous Latin American publics taken whole principal source supplies U S outside boundaries largest world market manufactured items products The above revealing which iloreover better comprehension problems consideration while countries foreign capital great industrial cotmtries supplementary sources materials sumers markets their productloh surplus investment markets surplus internal savings which cannot easily placement within their saturated markets The Industri Revolution which started century started growing interdependence Eric Johnson President Chamber Coerce declared construct automobile materials different countries needed Furthermore basic English working based Argentine Dutch butter Egyptian Australian New Zealand wheat illustrates which drives point autarchy disappeared powerful countries world Even Russia which occupies sixth world strategic material which requires those materials which possesses exist sufficient quantities needs The famous Christmas Pudding Queen Victorla concocted ingredients every corner British Emplre advance notice growing interdependence which ourselves today I brought these considerations discussion I believe without clear comprehension interdependence would difficulty understanding problems For reason although I abusing attention kindness I going permit myself examine briefly evolution world economy century until today In century underdeveloped countries interested great industrial powers Only source supply materia because manufactured articles which consumed almost entirely within countries because countries interest consumers markets owing their purchasing power In other words production manufactred goods century reached point where necessary consumers markets From moment which backward countries known pasescampo became providers materials industrial countries paKses mqulna looked sources supply cheapest possible prlce order augment their margins profit This cause colonial policy great century conspicuous cause conflagrations Our South Amrica defended Monroe Doctrine could parcelled again colonies began pressure industrial enterprises great powers desirous obtaining material lower Although situation better colonies result competition still development general sentiment known imperiallsm could prevented The costs materials means inevitably wages consequently standard living workers The movie industry revealing films standard living among workers great pcers contributed deepening resentment difficult imagine thoughts barefoot Indians emerge tunnels mines screens movie houses workers habit falling dugthers mlllonalres The destructive forces which engendered these reveal contrasts difficult measure Notwithstanding remembered certain mines grade exploited because labor since expoitatlon rough difficult regions expenses transportation reduce times render imposslble prospect financial Exploiting mlnerl deposit State Oklahom which close highway thing openlng volcanic inferno Andes In spite these consi erations logical imagine sentiments brefoot miner Jho contact outside world through medium North Americs films would precisely those peace GermanArclniegasl would These fbricators dreams engender surely without wishing vivid dramas The imperialism century result forces which originally loosed undergoing evolutionary rnsformtion The countries which formerly looked materials merdeveloped States sesrching almost miraculous groth their industrial countries production consumers markets since otherwise drown their abundance manufactured goods This phenomenon understood light economic history U S present North Americs entering First World War extrordlnary effort troops supply armies civilian population Allies Inorder accomplish transformed industries peace industries built factorles stimulated production general At fightlng ndwhen North American Congress turning Wilson thesis League Of Nations Initiated thepolicy isolation industries transformed industries North America produce scale unknown As Europe devastated without funds demand Amerlcn merchandise first exceeded supply which resulted truly extraordinary industrial It unsatisfied demand inflated prices merchandise there workers growth profits wages larger prices spite inflation latter North American standard living togetherwith index savings This period great prospe which thought sooner later every Americanworkerwould having mention radios electric stoves refrigerators house The large foreign market primsry manufactured U S extraordinary stimulant productivity Great Republic North spite Of isolationism began depend foreign consumers markets since without would impossible bring potentialities unsuspected height Even Mr Hoover President Unlon predicted prosperity without interruption andashewasanengineer hewabIIev Hoever there occurred great rupture expected crash known crisis production The value stocks began decline violentlyn Stock Exchange A little later banks industrial enterprises failed A savings middle classes invested stocks bonds trusts melted though Subjected great Many millionaires onverted beggars finan panlc considerably acCentuated effects causes touched country roots dramatic suicides In resulting confusion investigations begun cause crisls discovered North American merchandise begun without market Europe stanched wounds which inflicted Her fields factories again productlon although needed would continue North AmericSn products merchandise dollars reduced considerably buying TherefOre North American products accumulating warehouses Her ports herareas production lacking moved If takes account pe2iod millions world could scarcely satisfy their necessities a2rlve conclu called crisis production reality crisis consumption insuff icient purchasing world ulation In order counteract effects Violent deflation production partially destroyed artificial scarcities created maintain level prices Thousands Chicago slaughtered without having isfied human needs In Brazil Spain htmdre4 coffee oranges thrown This heroic measure defense naturally provoked protests moral character hunger raging areas world produce Was being destroyed From crisis production consumption arose grave problem unemployment It impossible former levels production Many fBctories closed while other reduced their minimum The ployment problem generally affect countries alrming proportions The number Of employed numbered millions To solve ituation prevent p0pulton starving destroying establshed social order their despair relief evolved whereby those employed helped sustain those without The experience crises first production later unemployment brought light conclusive facts interdependence Countries individual nation isolationism nothing sentimental dream great tries canmaintain their industrial growth improve standard living their peoples insofar capable enlarging their foreign markets Neither U S England Germany industrial country absorb production anufactured goods It evident therefore social economic stability industrial nations depends greater greater extent forei markets This important economic phenomenon century great courtries longer remain indifferent poverty under developed areas Upon wellbeing stability latter depends wellbeing progress world A great development civil production Estados possible E_stados camDo_ aided evation their purchasing power which ation standard living their inhabitants Aid great countries backward countries vieed light Charity vital necessity nations cerned President Roosevelt power beginn aforenentioned crisis clear changes vhich being brought about impact reality imperialist phenomenon Because fought against isolationism country When Sec Ond World War broke declared United States The Arsenal Democracy realizing vital importance start thining problems peace future North American soldiers unlimbered their overse The Four Freedoms Atlantic Pact which applied nations dowel program boundless hopes pirations From Atlantic Pact arose weapons peace United Nations Marshall Plan International Bank Reconstruction Development Point IV Program During World Two U S increased production cpacity extraordinary supply troops civilian populations allied countries armaments Thanks fabulous expansion Lend Lease program which feqilitated Allies possible first contain destroy Hitlerism Wti But peace broke someone irony countries devastated think satisfying their urgent needs which accum ulated during rebuilding their production capacity especially their industries since their factories damaged destroyed Europe needed American during rehabilitation period during For second America found itself compelled increase production mthought levels satisfy demand overseas oreover Europe economically drained began scarcity dollars dollars which materials urgently needed Thus England herself compelled sacrifice great investments South Amerlc order which people needed order survive famous Andes Pact handed Argentina extensive British roads country return rozen meats which needed hunger people Such situation cannot prolonged indefinitely without causing economic exhaustion Europe On other collapse North nerican industry because excessive production which cannot absorbed For reason Marshall Plan designed those countries devastated The Plan helped Old World emerge which afflicted facilitating importation machinery urgently needed rebuild production temporarily lessened danger super production consumption crisis U S The iarshall Pln which described dollars round tickets simple charitable program It economic inspired principle which I principle since vital importance United States Europe The problem hoever temporarily resolved Europe rebuilt production capacity compete U S international markets Thus after several years absence English German Japanese merchandise appeared Latin American markets TO emerge crisis improve standard living their people large countries siderably increasing their production capacity Upon maintenance dynamic production depends their wellbeing stability However because progress technology production rising populations industrial countries If under developed countries helped increase purchasing their inhabitants economic crisis sequent unemploYment appear distinct danger horizon WHM For reson Chancellor Perd asked larshall Plan Latin America reason Point IV Prog arose backward tries reason International Bak Reconstruction Development Export Iport BarLk granted easily amortizable loans Estados camDo augment their production capacity consequently purchasing power reason there vital terest investment surplus savings Est_ad0s m__uina_ underdeveloped countries effective means stimulating their development converting large consumers markets The vrious Economic Missions erent countries recently visiting capitals Latin American cotries proof interest At present development production hemisphere being stimulated through direct volved Point IV Program through loans means investment private capital Republ Direct still maintained modest We right during contributed effective towards ultimate victory accepting ceiling prices strategic mterials If supply demand function freely would conflict savings diisa greter mounts those ctually recorded money which could satisfy urgent needs But accepted prices contributing towards winning Now prices Of machines manufactured items which risen considerably should effective direct According recent report given President Eisen hower American Congress Budget little million dollars ermrked economic technical military Latin American countries Of total millions destined military US economic technical This distribut similar those years generally considered insufficient though I explain later there reasons present insuffiency In sections Latin AmeriCa military serves reduce indispensable economic technical oreover seves increase fears suspicions between neighboring countries strengthen armies political factors increase national Budgets matters defense items Ltin American countries according Pre sident Eisenhower invested million dollars program hemispheric defense One account however amount direct reduced because enormous effort U S Korean because effort armaments caused between East West The expenditures defense absorb energy Union extent funds available direct inevitably reduced Howe considers importance great nations countries entreat enlarged especially remembers sacrifices which Democracy darkest hours At least should suggested United States defense expenses dimin ished relaxation international tension sould invested solid foreign countries urgent necessary aforesaid military defense The armament industries limiting production articles peace maintaining together level employment If those industries suddenly shifted production items civlallan would stumble dangerous obstacle inadequate consumers market If armies demobilized index unemployment would alarmingly Besause sensible think peace possible growing profits Which being defense dustries should invested reproductive Outside Id several myopic taxpayers U S asked tempt reduce taxes A deflation cused sight would consequences grave those We receive indirect U S country liberalizes importation reoves customs barriers which defend production In Latin American countries would receive better pricis materials which export The loans especially those granted International Bank Reconstruction Development because their comfortable quotas amortization interest among other things advantage debtor nations italize nationalize investments However taken loans invested really repro ductive works programs repayment loans capabilities debtor countries Otherwise violent demand divisas_ cover payments loans destroy equilibrium balance paymentS monetary devaluation dangerous processes flation capable destroying advantages lready obtained Up Perd obtained little International Bank Of US S South merican countries October S1 S S toPerd The celebrat agreement concerning payment English bonlst_s removed obstacles which heretofore limited those ioans How remember possibilities bbtaining loans depend larvae abilit bought economically feasible proects The requirements International BarG sensible respect remembers famous champagne loans third decde century Finally economy vitalized private investments In influence investments already noted foreign xchange holdings It evidauttht powerful nations interest seeing capital countries ceiving The difficulty investing surplus capital country which originated advantages obtained stimulation buying power under developed countries factors which promote interest The report Randall Connission group headed Milton Eisenhower recognized However private investments follo private initia logical tendency private investor search larger surer profits comes before interest safeguarding equilibrium international As couutries settle unified policy concerning private capital persist current competition tract capital private investments tinue follow least resistance It logical capital should profit logical underdeveloped countries should balanced distribution profits This possible countries hemisphere surmo ternational differences inevitable jealousies bases uniform policy concerning private capital preventingthepossibilityof tido_edealle Thehil approved Caracas whereby American nstions would Economie Conference opens possibility problem fully dealt I convinced Latin American countries connon front familiarly investor nstions obtain their peoples share which always claimed capitalists least generous equitable participation profits Dr Polar urges audience students realize without potentialities country never become realities He closes following words Per living trance We frontiers future sleeping We awken But courage Let prepare conquest tomorrow pioneers confronted still unconquered equipped little courage tools Let prepare knowledge resources formidable blood breathes youth heart there ability Each means promise Let therefore travel thinking clear stones pebbles bruise nsked still And tomorrow Bueno tomorrow enjoy company which conquered possibility wearing shoes W I FOOTNOTES Jean Fourasti contemporary French writer economics Discurso Orden speech honor ceremonies markin beginning academic DirectiOn National Estadstica governmental gathering aency Lima Heo acres Pasto yellowish bunch which grows pampas hills Dertean0 engineer Sociedad National Arariaw problem several years Divisas foreign currency holdinss CEPAL Ec0nomc Commission Latin American ountries Dr Polar facts those Preston James titled Latin America Odyssey Press New York James quotes erage annual inome capita estimated population Per SCIPA Interamerican Go operative Society A ricultural Produce Fuentes Llauno lawyer Rector Universidad Nacional San Austin Arequipa Hay sembrar petroleo We petroleum ference importance above Venezuela itimaes system enforced migration communities employed Incas insure preservation peace outlyin provinces maximum producti available Bancos Fomento banks development aencies which loans individuals roups purpose minin aricultural exploitation Batidos detalle piecemeal attacks individual skirmishes Nationalizin countries Bolivia Argentina countries ferred The Goliaths least those Bolivia three families which controlled production Bolivia their bankin elsewhere Patio Hochschild Aramayo Germu Arcinieas contemporary Colombia writer Andes Pact arranged durin years Chancellor Per official would correspond State Department His Garca Sayan During thirties Latin American pressure salesmanship especmally Peru induced English AmeriCan investorsto various countries Peru President Agusto B Leguma highly instr campaign The English bonistas referred discovered Per could their until agreement reached hereby English their claim accumulated interest settled lower figure payment according Dr Polar Before agreement however International Bank sinking funds Per especially membered loans country thirties which resulted graft personal rofit maz4v cases champagne Received New York