c r r xx ; .

r o r x
Perns Gambit: The United States
and the Argentine Challenge to the
Inter-American Order, i,,ci,,
The threat which gives us the worst case of cold shivers, State Department
ocer Guy Ray wrote in i,,, is that of a southern bloc dominated by
Argentina.
i
The Truman administration had good reason to fear the emer-
gence of Colonel JuanDomingo Perns NewArgentina. Pernhaddedicated
himself to a dramatic revision of Argentinas social hierarchy and to a program
of state-driven economic growth, both of which stood in stark contrast to the
liberal capitalist order favored by U.S. policymakers. What is more, Pern did
not conne his vision to Argentina but worked diligently to export his populist
brand of state corporatism to the other nations of the Southern Cone of South
America. In short, he sought to rectify what he believed to be the incompre-
hensible error by which the Southern Cone had been divided into a number
of separate nations and to create instead an integrated southern bloc behind
Argentine leadership.
z
Although U.S. leaders were not entirely unsympathetic to a limited govern-
ment role in the national economy and to the integration of regional markets
indeed, they were promoting these same goals in Western Europe through the
Marshall Plan Perns programrelied far more heavily on statist intervention
than most U.S. ocials deemed necessary or wise. They had all witnessed the
Great Depression, the rise of fascism, and the coming of World War II, and the
lesson they had learned was that economic statism of the sort promoted by
Pern spawned unnatural or articial industries, constricted global trade,
Dirroa+ic His+or\, Vol. zc, No. i (Winter zooz). zooz The Society for Historians of American
Foreign Relations (SHAFR). Published by Blackwell Publishing, Inc., ,o Main Street, Malden,
MA, ozi,, USA and io Cowley Road, Oxford, OX, iJF, UK.
i
*The author wishes to express his gratitude to Michael J. Hogan, Peter Hahn, Carlos Escud,
and the anonymous reviewers of Diplomatic History for lending invaluable assistance in the
development of the ideas put forward inthis article. Financial support for this project was provided
in part by the Tinker Foundation.
i. Rayto secretaryof state, , Januaryi,,, General Records of the Department of State, Record
Group ,,, ;ii.,, National Archives II, College Park, Maryland (hereafter RG,,, with le number).
z. Bowers to secretary of state, zz June i,,, RG ,,, cz,.,i. See also Samuel Baily The United
States and the Development of South America, :,,y:,y (New York, i,;c), czc; and Robert Alexander,
Prophets of the Revolution: Proles of Latin American Leaders (New York, i,cz), z,,ci.
andled todepression andwar.

They therefore dedicatedthemselves tobuilding

a liberal capitalist order based on convertible currencies, multilateral trade,
corporate capitalism, and private enterprise and, with this goal in mind, worked
to dissuade Latin Americans from adopting the sort of state-centered corpora-
tism that Pern envisioned.
,
In their eyes, Peronism utilized policies and
strategies disturbingly similar in some respects to those of European fascism
and communism, and it appealed to the same nationalistic working-class
constituencies.
Nor was the State Department completely o the mark. Despite strong U.S.
opposition, Pern had won the Argentine presidency in March i,,c by mobi-
lizing a populistic alliance of workers, the army, and the urban poor. Once in
power, moreover, Argentinas Number One Worker had dedicated himself to
the cause of industrialization, economic diversication, nationalization of
foreign investment, and autarchic self-suciency, arguing that Argentinas
traditional agrarian economy doomed his nation to remain an underdeveloped
exporter of raw materials. Presaging dependency theorists and echoing old
nationalist appeals, Pern concluded that Argentina could not in the long run,
continue to export only raw materials if its workers hoped to achieve a
standard of living just one-quarter as high as that of the average American
working man. Toward this end, he instituted a program of rapid, state-driven
economic growth.
,
The cornerstone of his reform eort was to be the Instituto
Argentino para la Promocin del Intercambio (IAPI), a government import-export
monopoly that promised to use technocratic expertise to translate Argentine
agricultural wealth into industrial development.
c
In theory, at least, IAPI would
break the back of the old agropastoral and commercial elite that had raised fat
cows and thin peons and would help to create in its place an organized
. U.S. leaders like Dean Acheson, James Byrnes, Will Clayton, and George Marshall were
veterans of the battle against fascism and were in certain respects very much the heirs of Cordell
Hull. In the Southern Cone, Byrnes selected George Messersmith who had served in Germany
during the i,os and Austria during the anschluss as ambassador to Argentina and Joseph Flack,
another veteran of the Berlin embassy, to serve in La Paz. With Gen. Francisco Francos old
nemesis, Claude Bowers, serving in Chile, no small part of the team that had fought fascism in
Europe during the i,os had been reunited in South America. Claude Bowers, Chile through Embassy
Windows, :,,,:,y, (New York, i,,); Jesse H. Stiller, George S. Messersmith: Diplomat for Democracy
(Chapel Hill, i,); Lloyd Gardner, Economic Aspects of New Deal Diplomacy (Boston, i,c,); Michael
J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, :,,:,y.
(Cambridge, England, i,), ;,,, ioi.
,. Michael Grow, The Good Neighbor Policy and Authoritarianismin Paraguay (Lawrence, KS, i,i),
esp. i,i; Hogan, The Marshall Plan, esp. i,.
,. Embassy Buenos Aires to secretary of state, Transmitting Memorandum Furnished by
Enrique Faltisek with reference to Conversation with Colonel Pern, i, December i,,,, RG ,,,
,.oo; Antonio Caero, Cinco aos despues . . . [Five years after . . .] (Buenos Aires, i,ci), zo,; Jorge
Fodor, Perns Policies for Agricultural Exports, in Argentina in the Twentieth Century, ed. David
Rock (London, i,,), i,ci; Alejandro Horowicz, Los Cuatros Peronismos [The four Peronisms]
(Buenos Aires, i,), io,.
c. Instituto Argentino para la Promocin del Intercambio, Memoria Anual [Annual Report],
Ejercicio i,,, (Buenos Aires, i,,o); see also Paul Lewis, Crisis of Argentine Capitalism (Chapel Hill,
i,,o), i;,i.
z : r i r r o a + i c n i s + o r \
community (comunidad organizada) capable of bringing social justice to the
lower classes and nally winning Argentinas economic independence.
;
Pern argued that his program constituted nothing less than a major new
Third Position between capitalism and communism, and one that was also
appropriate for other developing nations.

Indeed, in December i,,c Pern

made his rst eorts to formally disseminate the Third Position outside of
Argentina by dispatching dozens of labor attachs to Argentine embassies
throughout Latin America. Drawn fromthe ranks of loyal unions, these attachs
were instructed to report on, make contact with, and inuence workers in other
nations. By advertising the tangible benets that peronismo had brought to the
Argentine descamisados (shirtless ones), they were to extend Perns cult of
personality and mobilize discontent against both the established order and the
United States. As two Congress of Industrial Organizations (CIO) ocials
returning from a tour of Latin America put it, Perns envoys comprised an
indefatigable task force whose propaganda line was nothing short of a
denunciation of Yanqui Imperialism, racial discrimination and exploitation of
Latin American workers by American corporations.
,
Bypromoting his brandof state-driveneconomic development, Pernaimed
to challenge U.S. hemispheric leadership, which he sawas a barrier to progress,
and to unite the disparate strands of Latin American nationalism under his
banner. Through true revolution, his spokesmen argued, Argentina had
escaped the thinly veiled plutocratic facade of Anglo-Saxon democracy,
broken the chains of gold, and created instead a popular democracy that
served all members of society. We are not anti-American, Peronists insisted,
but we do not desire to march to the beat of foreign drums.
io
But for Pern
to become the paladin for a Latin bloc, his propagandists had to rst capture
the attention of South Americans and then discredit the United States.
ii
Peronista eorts in Peru illustrated well both the tone and the aims of this
approach. According to Argentine ambassador Hugo Oderigo, the United
States was absorbing the economy of Peru without bringing progress or
assuring the economic liberty of the people. A number of disenchanted
;. Mann to Brown, zo December i,,,, RG ,,, ,.oo; Juan Domingo Pern, La comunidad
organizada [The organized community] (Buenos Aires, i,,,).
. Alberto Conil Paz and Gustavo Ferrari, Poltica exterior argentina, :,,o:,v. [Argentinas
foreign policy, i,oi,cz] (Buenos Aires, i,cc), i;; Joseph S. Tulchin, Argentina and the United States:
A Conicted Relationship (Boston, i,,i), io,.
,. Martin Kyne and Ernest Schwarz Report on Trip to Latin America, z; October i,,,, James
Carey Papers, box ,, Walter Reuther Archives of Urban and Labor History, Wayne State
University, Detroit, Michigan.
io. Periodico Seminal del C.G.T., ic Enero i,,;, Rollo ,, Fundacin Simon Rodriguez (FSR),
Buenos Aires; Hoyt to Braden, Briggs, Trueblood, Mann, andLyon, i January i,,;, RG,,, Records
of the Oce of American Republics Aairs, Memoranda Relating to Individual Countries
(MRIC): Argentina. See also Carlos Escud, La Argentina: Paria Internacional? [Argentina: Interna-
tional pariah?](Buenos Aires, i,,), ,.
ii. E. Henry Norweb to secretary of state, io July i,,;, RG ,,, ;,.;; Hoyt to Braden, Briggs,
Trueblood, Mann, and Lyon, i January i,,;, RG ,,, MRIC: Argentina.
Perns Gambit :
Peruvians apparently agreed and were therefore watching the Argentine alter-
native closely. Oderigo reported that they constituted a burgeoning undercur-
rent of resentment that could serve Peronists well. It is very common to hear
people repudiating the North Americans, he wrote, and to hear them say that
what we need here is a Pern, even if they had to say so very quietly.
iz
To
encourage the spread of this sentiment, the embassy sta broadcast a weekly
radio program, the Voice of Argentina, which detailed the principal accom-
plishments of our country, and tirelessly distributed pamphlets, booklets, and
magazines explaining Perns social work, solution of economic problems,
recuperation of the country, and orientation in international politics.
i
But just as Latin America was taking note of Perns ideological oensive,
so too were policymakers in Washington. Although Argentine proponents of
the Third Position supposedly denounced both Communism and American
imperialism, the emphasis, U.S. statesmen lamented, was sadly but clearly on
the latter.
i,
According to Ambassador James Bruce, Perns attacks on Yanqui
plutocracy, imperialism, and racism paralleled those of Vishinsky or Molo-
tov.
i,
In other words, the line adopted by Argentine labor is very similar to
the line adopted by the communists.
ic
To North American eyes this similarity
was reinforced by Eva Pern, the presidents wife and self-styled benefactress
of the downtrodden, and Luis Prestes, the powerful head of the Brazilian
Communist party. The former repeatedly proclaimed that she would join the
Communists if this was the only way to press her ght against privilege and the
oppressive capitalist system,
i;
while the latter proclaimed Pern to be a fellow
crusader against capitalism in the last Latin American nation in which
Yankee capital does not predominate.
i
When a young Fidel Castro sought
support against Yankee imperialism in i,,, he turned rst not to the Soviet
Union but to Peronist emissaries in Cuba who helped nance his famous trip
to Bogota.
i,
If Argentine propaganda served as a call for political unityagainst the United
States and the liberal capitalist order that had retarded Latin American devel-
opment, it also featured a creative appeal to religious, cultural, and ethnic
iz. Oderigo to Bramulgia, zi Marzo i,,;, Archivo del Ministerio de Relaciones Exteriores y
Culto (AMREC), Departamento Poltico (DP), Peru i,,;, Caja iz, Expediente i, Buenos Aires,
Argentina; Oderigo to Bramulgia, ic Septiembre i,,;, AMREC, DP, Peru i,,;, Caja iz, Expediente
i; Embajada Lima, Memoria Anual, i,,;, AMREC, DP, Peru i,,;, Caja iz, Expediente ,.
i. Embajada Lima, Memoria anual, i,,,, AMREC, Peru i,,,, Caja z, Expediente ,;
Embajada Lima, Memoria anual, i,,;, AMREC, Peru i,,;, Caja iz, Expediente ,.
i,. Dearborn to Tewksbury, Woodward, Daniels, and Armour, i May i,,, RG ,,, ;ii.,; see
also Pern, La fuerza es el derecho de las bestias [Force is the right of the beasts] (Santiago, i,,c), z,.
i,. Dearborn to Tewksbury, z December i,,;, RG ,,, MRIC: Argentina.
ic. Dearborn to Tewksbury, Woodward, Daniels, and Armour, i May i,,, RG ,,, ;ii.,.
i;. Maleady, Fanatical Seora Pern would go Communist, March i,,o, RG ,,, ;ii.,
i. Mario Rapoport, Poltica y diplomacia en Argentina: Las relaciones con Estados Unidos y Unin de
Republica Sovietica [Politics and diplomacy in Argentina: Relations with the United States and the
Soviet Union] (Buenos Aires, i,c), z,z; Davis to Flack, i, March i,,c, RG,,, MRIC: Argentina.
i,. Tad Szulc, Fidel: A Critical Portrait (New York, i,c), ic;o.
, : r i r r o a + i c n i s + o r \
solidarity. Perncouldclaimtohave at least the nominal backing of the Catholic
church, quite unlike either the Communists or the predominantly Protestant
United States. Pern, to be sure, had never received ocial papal approval, but
important members of the clergy had backed him and his brand of state
corporatism that harkened back to the papal encyclicals, Rerum Novarum (i,o)
and Quadragesimo Anno (i,i).
zo
Furthermore, Pern also enjoyed close ties with
Generalissimo Francisco Franco, which allowed him to capitalize on cultural
ties based on much of Latin Americas blood relationship with Spain. When
a new Argentine ambassador arrived in Cuba, for example, he made a point of
reminding the Cubans of the common noble Hispanic origin and of the
Catholic, Apostolic, and Roman religion that they shared with the Argen-
tines.
zi
Ironically, the same Latin American Catholicism that had earlier pro-
vided a natural bulwark against atheistic communism was nowbeing made into
a wedge by Pern.
At the outset the peronistas had entertained the hope that they might be able
to unify not only the labor unions of Latin America but also the American
Federation of Labor (AFL) and the CIO behind their propaganda line.
Indeed, they invited AFL representatives to Buenos Aires in late i,,c in order
to cement an alliance against both Yanqui plutocracy and communism.
zz
Believing that the U.S. unions had suered at the hands of imperialistic Wall
Street capitalism and would therefore welcome the support of their southern
brethren, the Peronists even hoped that Argentinas Confederacin General de
Trabajadores (CGT) could spearhead the AFLs new, anti-Communist, inter-
American labor federation. Arguing that the English-speaking unionists of the
United States evidently cannot, as the minority they are, take the initiative to
establish any system of hemispheric union cooperation, the CGT hoped to
secure a major international role for itself and to impress U.S. unionists with
the maturity of the Argentine proletariat.
z
Unsurprisingly, however, the AFLdetermined that the Peronist unions were
nearly as great a danger to the hemisphere as the Communists themselves and
opted to forge an alliance with the State Department to combat both.
z,
Serano
Romualdi, the AFLs foremost Latin American specialist, argued that Perns
militaristic totalitarian type of propaganda, like that of the Communists,
zo. Howard J. Wiarda, Corporatism and National Development in Latin America (Boulder, i,o);
Primera Plana, i Octubre i,cc, c; ibid., i Noviembre i,cc, ,c; ibid., Noviembre i,cc, c,o.
zi. Norweb to secretary of state, io July i,,;, RG ,,, ;,.;. See also Hoyt to Briggs, Wright,
and Mann, i, March i,,;, RG ,,, MRIC: Argentina.
zz. Periodico Seminal del C.G.T., ic Enero i,,;, Rollo ,, FSR. See also Serano Romualdi,
Presidents and Peons (New York, i,;o), ,z,; Joseph Page, Pern (New York, i,), i;ci.
z. Periodical Seminal del C.G.T., ic January i,,;, Rollo ,, FSR; Periodico Seminal de la C.G.T, i
Julio i,,c, Rollo ,, FSR. See also Ferrer Vieyra, Informe sobre el movimiento huelgista ocurrido
en los EE.UU desde i,,o a i,,,, n.d., AMREC, DP, EE.UU. i,,c, Caja , Expediente .
z,. Serano Romualdi speech at Rutgers, , June i,,;, Papers of Serano Romualdi, Interna-
tional Ladies Garment Workers Union Collection, ,,,,/i/c, M. P. Catherwood Library, Cornell
University, Ithaca, NewYork; Romualdi, Presidents and Peons, ,c, ;z;; Ronald Radosh, American
Labor and United States Foreign Policy (New York, i,c,), c;i.
Perns Gambit : ,
germinates very well in the psychologies of people who are victims of confu-
sion and of political disillusionment and economic suering.
z,
Communism
and Peronism had that much in common, he wrote, and also shared an antago-
nism against capitalistic democracy in general, and the United States in par-
ticular. As one Chilean taxi driver informed his ambassador, We need Pern.
He takes care of the descamisados, can handle the Yankee imperialists and drive
them out of the country, and will put the capitalists, including our own, in
their place.
zc
But while the State Department regarded the Soviet Unions
half-hearted eorts to destroy the inuence of the United States and create
antagonisms within the hemisphere as little more than minor irritants, Perns
nationalist, Hispanicist, and class-based appeals seemed to be more formidable,
at least in i,,c.
z;
Although Perns eorts were clearly designed to weaken U.S. prestige and
win adherents to his own system of state corporatism, there was little that the
State Department could do to counter themdirectly. As U.S. charg John Moors
Cabot noted,
With a disproportionately large part of the economic wealth of the country
in the hands of foreigners and a selsh, Europeanized plutocracy which
never did an honest lick of work in its life, this country has been over-ripe
for reform. Pern has been practically the rst man to do anything eective
about it. To say that his means have been totalitarian does not impress the
working masses. They contrast his acts with the empty words of his corrupt
political predecessors.
z
Even Venezuelan president Romulo Betancourt, an ally of the United States,
warned that Latin Americas masses had been taught to fear dollar imperial-
ism and were willing to give [Argentina] the benet of the doubt, as a sister
Hispanic country. Moreover, he cautioned that assailing Pern who had
undeniably won a free, democratic election and was actively enriching the lower
classes would only foster the perception that Yankee imperialists opposed
any Latin American economic development. After all, the United States had
taken no action against openly dictatorial leaders in the Caribbean and Central
z,. Romualdi, draft of memorandum, iz May i,,,, Romualdi Papers, ,,,,/c/. See also
Romualdi speech at Rutgers University, , June i,,;, Romualdi Papers, ,,,,/i/c.
zc. Braden to Lovett and Armour, zc June i,,c, RG ,,, z,.oo.
z;. Central Intelligence Group, Soviet Objectives in Latin America, io April i,,;, ORE
Report ic and Enclosure A, Dissent by the Intelligence Organization of the Department of State,
National Archives II. See also Leslie Bethell and Ian Roxborough, The postwar conjuncture in
Latin America: Democracy, Labor, and the Left, in Latin America between the Second World War and
the Cold War, :,,,:,,:, ed. Bethell and Roxborough (Cambridge, England, i,,z), ioi.
z. Cabot to Pepper, i April i,,c, John Moors Cabot Papers, Argentina, (on microlm), Harry
S. Truman Presidential Library, Independence, Missouri.
c : r i r r o a + i c n i s + o r \
America such as Tiburcio Caras, Rafael Trujillo, and Anastasio Somoza,
Betancourt argued, because U.S. capital still predominated in their nations.
z,
U.S. ocials had other reasons to fear that a direct counterattack against
Perons propaganda would backre. The State Department had launched such
an assault on Pern prior to his election by publishing the Blue Book, a catalog
of his alleged ties with the Nazis, but Argentinas Number One Worker had
managed to transformthe attack on himinto one on Argentine sovereignty and
had used it to rally patriotic Argentines to his cause.
o
Well aware that the mere
mention of U.S. intervention raised hackles on the back of every politician as
far south as Cape Horn and that our unilateral blasts have alienated people
throughout the Hemisphere, including many who have hitherto opposed
Pern, U.S. statesmen concluded that strong action against the only man who
had . . . achieved some successes in really helping the lower classes might revive
old Latin American fears and tear to ribbons the precious amity built by
Franklin Roosevelts Good Neighbor policy.
i
Furthermore, engaging in an
open propaganda battle with Pern would only give him a forum to discuss his
brand of state-centered corporatism at a time when U.S. leaders were trying to
discourage any discussion of alternatives to liberal capitalism.
z
In short, U.S. policymakers could not openly oppose Pern without risking
the perception that Yanqui plutocrats were working to hold back Latin
Americas economic growth by opposing a potentially viable developmental
strategy. While Pern may have hoped for another confrontation that would
increase his prestige as a revolutionary spokesman, U.S. policymakers refused
to oblige him, despite being constantly embittered by being kicked in the rear
when they werent looking.

For the time being at least, the self-styled Paladin

of Social Justice would be able to continue to pluck the eagles feathers and
make the imperialist United States a whipping boy without fear of open
retaliation.
,
z,. Dawson to secretary of state, February i,,c, RG ,,, ,.oo.
o. Gary Frank, Juan Pern vs Spruille Braden (Lanham, i,); C. A. MacDonald, The Braden
Campaign and Anglo-American Relations in Argentina, i,,,i,,c, in Argentina Between the Great
Powers, :,,,:,,v, ed. Guido Di Tella and D. C. Watt (Pittsburgh, i,,o), i;,; Rapoport, Gran
Bretaa, Estados Unidos y las clases dirigentes argentinos, :,,o:,,y [Great Britain, the United States,
and the governing classes of Argentina, i,,oi,,,] (Buenos Aires, i,o).
i. Cochran to Cabot, , January i,,c, and Cabot to Pepper, June i,,c, Cabot Papers,
Argentina; Oakley to Messersmith, iz December i,,c, George S. Messersmith Papers, iz,
University of Delaware Library, Newark.
z. Stephen G. Rabe, The Elusive Conference: United States Relations with Latin America,
i,,,i,,z, Diplomatic History z (Summer i,;): z;,,,.
. Gris to Miller, i August i,,o, Records of the Assistant Secretaries of State (RASS), lot le
,Dzc, Subject File, box i, Argentina Folder, National Archives II.
,. Periodico Seminal del C.G.T., z, Febrero i,,;, Rollo ,, FSR; Cabot to secretary of state,
General Survey of the Political Situation in Argentina, , January i,,c, RG ,, Records of the
Foreign Service Posts, Buenos Aires (BA), National Archives II; Embassy Buenos Aires to
Department of State, i March i,,o, RASS, lot le ,Dzc, Subject File, box i, Argentina Folder.
Perns Gambit : ;
Indirectly, however, the United States could act and act eectively, as it did
to counter Perns attempt to advance his cause by capitalizing on food sur-
pluses in Argentina and shortages elsewhere. Peronists learned quickly that the
postwar food shortage could be used as a lever by nations like Argentina that
possessed exportable agricultural surpluses. Through what critics labeled eco-
nomic blackmail, Perns economic czar, Miguel Miranda, or other Peronist
functionaries used IAPI to slow or stop critically needed food shipments until
other nations acceded to Argentine demands.
,
By focusing on neighboring
states, Peronists added a new dimension to their ideological gambit and evi-
dently hoped to instill a more cooperative attitude in those nations that might
comprise a Southern Bloc. There were examples of this blackmail in Perns
dealings with Bolivia and Brazil, but the most notable instance occurred in
mid-i,,c when Pern moved against his foes in Uruguay.
Throughout his presidential campaign in late i,,, and early i,,c, Pern had
been blistered by violent and tendentious propaganda emanating from Uru-
guayan journalists and anti-Peronist refugees or exiles residing in Mon-
tevideo.
c
After emerging victorious, he sought and found an appropriate
retaliation. In April, in the midst of the heated Uruguayan presidential cam-
paign between the mildly anti-U.S. candidate, Luis Alberto Herrera, and the
avowedly pro-U.S. candidate, Toms Berreta, Pern entered the fray.
;
In what
can only be construed as a crude attempt to manipulate the election, the
Argentine government abruptly terminated wheat shipments to Uruguay and
announced that it would provide assistance only when Herrera requested it.
The Uruguayan government urgently requested of the United States emer-
gency shipments of grain to compensate for the Argentine refusal to supply it.
The State Department supported the petition, and seventeen thousand tons of
wheat originally destined for Europe were diverted to Uruguay instead, along
with a promise of another seventeen thousand tons. When Berreta won,
members of his administration publicly thanked the United States for its
assistance and vowed to hold the line against Argentine aggression. Even the
State Departments most levelheaded commentators noted that this intrigue
represented a good reminder of the continued danger Pern represents for
us.

,. Messersmith to Flack, z; August i,,c, RG,, Buenos Aires; Smith to Braden, zo September
i,,c, RG ,,, io.ciii; Orloski to secretary of state, zo December i,,c, RG ,,, cz,.,i.
c. Pern to Cesar Ameghino, o Abril i,,,, AMREC, DP, Uruguay i,,,, Caja iz, Expedi-
ente z.
;. Guillermo Spika Santilln, La Prensa in el Uruguay, z Enero i,,;, AMREC, DP,
Uruguayi,,;, Caja i, Expediente ,; Fernando Lopez-Alves, WhyNot Corporatism? Redemocra-
tizationandRegime FormationinUruguay, inLatinAmerica inthe :,,os: War and Postwar Transitions,
ed. David Rock (Berkeley, i,,,), i;zo,; Liborio Justo, Argentina y Brasil en la integracin continental
[Argentina and Brazil in continental integration] (Buenos Aires, i,), ,,,.
. Braden to Acheson and Marshall, i February i,,;, Harry S. Truman Papers, Presidents
Secretary Files (PSF), Foreign Aairs, Marshall File, Truman Library; Cabot to secretary of state,
iz April i,,c, RG ,,, ;ii.,. See also Dawson to secretary of state, z April i,,c, RG ,,, ,.z,; and
: r i r r o a + i c n i s + o r \
Although Pern could withhold food to pressure opponents of his regime,
U.S. policymakers noted that his allies received support and assistance. Lt. Col.
Gualberto Villarroel and Vctor Paz Estenssoro, revolutionary leaders of Bo-
livia, had long been linked to Pern. When Villarroel seized power in i,,, U.S.
policymakers had attributed the coup to Nazi Germany and Argentines, like
Pern, who they believed to be Nazi puppets.
,
While there was little conclusive
evidence of cooperation between the Germans and either Pern or Villarroel,
both South American leaders had embarked on nationalistic reforms and had
suered at the hands of the United States. As a result, U.S. diplomats compared
Argentinas blackmailing tactics toward Peru, Brazil, and Uruguay, especially
when it came to the shipping of wheat and meat, with the fact that ample
meat supplies continue to be received in Bolivia. Hector Adam, the U.S.
ambassador in La Paz, concluded in May i,,c that Bolivia must have come to
terms which Argentina demanded before such concessions were made. In
other words, there can no longer be any doubt that Bolivia, either through fear
of reprisals or genuine willingness, has now signed up in . . . a bloc with
Argentina.
,o
Although Adam overstated his case badly, it was nonetheless clear
that Pern was utilizing wheat exports as both carrot and stick in his diplomacy
with neighboring states.
Peronistas vehemently but fruitlessly denied that they were utilizing such a
Machiavellian policy. The counselor of the Argentine embassy in Washington
protested that the Argentines were damned if [we] do, damned if [we] dont.
If genuine transportation diculties slowed Argentine food shipments to third
countries, U.S. leaders did not hesitate to jump to the conclusion that we are
trying to starve them in order to impose our will. But if Pern did make his
deliveries, then Argentina was accused of trying to form a southern bloc . . .
directed against the U.S.
,i
Although there was some validity to this defense
some U.S. commentators blamed stalled food shipments on local Argentine
ocials who were acting without instructions from Buenos Aires diculties
in transportation seemed to arise and disappear all too conveniently to be
entirely coincidental.
,z
Unfortunately for Pern, economic blackmail was an inherently awed
tactic that could never produce more than minor, temporary results. For
example, by threatening to slow or stop food shipments to Brazil and Europe,
Pern had been able to procure badly needed coal, petroleum, and rubber from
Oce of the Undersecretary of Economic Aairs, Current Economic Developments ,, (z, April i,,c),
Truman Library.
,. U.S. Department of State, Consultation among the American Republics Regarding the Argentine
Situation (Washington, i,,c), o.
,o. Adamto secretary of state, The Bolivian Government Points to Close Collaboration with
Pern, i May i,,c, RG ,,, ;z,.,.
,i. Oscar Ivanissevich to Bramulgia, c Enero i,,;, AMREC, DP, Chile i,,c, Caja io, Convenio,
Legajo z, Expediente ,.
,z. Messersmith to Braden, z August i,,c, and Messersmith to Flack, z; August i,,c, RG ,,
Buenos Aires.
Perns Gambit : ,
the United States in early i,,c.
,
By and large, however, economic blackmail
was far too easily countered, as had been the case in Uruguay. Whenever Pern
seemed to be applying pressure on a third nation, the State Department could
respond by promising to send, or actually sending, emergency shipments of
food, thereby spik[ing] the deal and lifting Argentinas economic strangle-
hold on the South American food supply.
,,
In eect, Perns coercion gave the
State Department an opportunity to intervene benevolently and cement the
loyalty of South American governments like Berretas in Uruguay. Even U.S.
ambassador George S. Messersmith, Perns foremost defender, had to implic-
itly concede Argentine disingenuity when he informed his superiors that the
Peronists had learned from the Uruguayan experience that the holding up of
foodstus did not pay.
,,
If Perns ultimate goal was, as many in the State
Department believed, to drive countryafter countrytopolitical subservience,
it was a strategy doomed to failure.
,c
Recognizing this, Pern turned toward a more positive approach in Decem-
ber i,,c the use of loans andcredits towin friends throughout the hemisphere.
Throughout the war, the Argentine government had sent great quantities of
wheat and meat to the Allies and had amassed large reserves of gold, sterling,
and dollars. Although Jorge Fodor has illustrated that this wealth was not as
much an asset as some initially believed it to be, it nonetheless provided Pern
with a unique opportunity to increase through credits and subsidies the
already considerable economic dependence of neighboring states on Argentine
food and trade.
,;
Starting in December i,,c, Pern and Miranda negotiated
comprehensive treaties with Chile and Bolivia (and attempted to do the same
with Paraguay, Peru, and Venezuela), calculated to tie these nations to Argen-
tina and, in the words of Miranda, begin the Southern Cones emancipation
from foreign tutelage. If Pern prudently denied that he was working to
assemble a southern bloc, the far more candid Miranda did not. It is my desire,
he boldlyasserted, to economicallyrecreate the Viceroyaltyof La Plata, Chile
would be brought in rst, then Bolivia, Peru, Uruguay and Paraguay.
,
,. U.S. Department of State, ForeignRelation of the UnitedStates, :,,v (Washington, i,c,), ,: iii,.
,,. Maleady to secretary of state, io September i,,;, RG ,, Buenos Aires; Gilmore to Mann,
i, October i,,c, RG ,,, ,.,o.
,,. Messersmith to Flack, z; August i,,c, RG ,, Buenos Aires.
,c. Gilmore to Mann, i, October i,,c, RG ,,, ,.,o.
,;. Memorandum for the secretary of state, January i,,;, Records of the Deputy Assistant
Secretaries of State for Inter-American Aairs, i,,,i,,c (RDAS), lot le ,;D,,, Policy-Position
Papers, i,,,i,,,, box c, National Archives II. See also Jorge Fodor, Perns Policies for Agricul-
tural Exports: Dogmatism or Commonsense? i,ci, and idem, Argentinas Nationalism: Myth
or Reality? in The Political Economy of Argentina, ed. Torcuato Di Tella and Rudiger Dornbusch
(Pittsburgh, i,,), i,,.
,. Created in i;;c by the Spanish crown, the Viceroyalty of La Plata was an colonial
administrative unit comprising most of the Southern Cone and governed by ocials in Buenos
Aires. Miranda interview in Zig-Zag, z Enero i,,;, AMREC, DP, Chile i,,c, Caja io, Convenio,
Legajo z, Expediente ,; Miranda interview in Review of the River Plate, io January i,,;, i,.
io : r i r r o a + i c n i s + o r \
As the rst step, Miranda opened negotiations with Chilean senator Jaime
Larran that culminated in the Argentine-Chilean Trade Agreement on i De-
cember i,,c. The treaty provided for bilateral barter between the two nations
and for the creation of a sort of customs union that would permit the duty-free
movement of many goods across the borders of both nations. Although these
tari concessions were not to be applied to third nations, neighboring states
could be exempted from this limitation, which left open the possibility that
Pern could bring other states into the bloc. Miranda had overcome Chiles
traditional mistrust of Argentina and induced Larran to sign the pact by
oering a developmental loan and credit package of over $i;, million the
biggest in Latin American history, and ve times the total war and postwar
nancial aid which Chile . . . received from the United States.
,,
These credits
were to be administered by a joint Argentine-Chilean board and were to give
high priority to projects that increased Chilean mineral production and com-
merce between the two nations. By building highways and rail lines across the
Andes cordillera, permanent links would be established between the comple-
mentary economies of Argentina and Chile, and a history of rivalry and
suspicion would gradually dissipate.
,o
Startled by the speed with which Pern had moved, journalists and State
Department ocers likened the pact to the Nazi anschluss and saw in it a
dramatic repudiation of both the United States and open commerce.
,i
To fulll
the barter requirements of the treaty, the Chileans would be compelled to
exercise a much higher degree of centralized planning and control over private
enterprise, and Perns agents would be playing a central role in that planning.
Still worse, the agreement provided for government-to-government loans and
for the export to Argentina of large quantities of Chilean copper, which Pern
would use to establish an Argentine copper processing industry.
This sort of statism alarmed the State Department. If Pern wanted to
modernize the Argentine cattle industry, or export processed linseed oil rather
than linseed, U.S. policymakers would not complain, as these initiatives took
advantage of Argentinas natural niche in the regionally specialized global
economic order. By initiating state-to-state loans and barter agreements and by
supporting the creation of heavy industries through trade restrictions and
special concessions, however, Pern was moving down the same destructive
,,. Carleton Beals, Chile, Copper and Communism, in Latin America in the Cold War, ed.
Walter M. Daniels (New York, i,,z), i,o,i.
,o. Leonor Machinandiarena de Devoto y Carlos Escud, Las relaciones argentino-chilenas,
i,,ci,,, y las ilusiones expansionistas del peronismo, [Argentine-Chilean relations, i,,ci,,,
and the expansionist illusions of Peronism] in Argentina-Chile: Desarrollos paralelos [Argentina-
Chile: Parallel developments], ed. TorcuatoDi Tella (Buenos Aires, i,,;), i,ozoo; Machandiarana
de Devoto, La inuencia del justicialismo en Chile, i,,ci,,z [The inuence of Justicialismo in
Chile, i,,ci,,z] (Tesis de Doctorado, Universidad de Buenos Aires, i,,,), zcz,.
,i. Simmons to secretary of state, i December i,,c, RG ,,, cz,.,i; Gilmore to Braden and
Mann, i December i,,c, RG ,,, cz,.,i.
Perns Gambit : ii
path that economic nationalists had trod in the i,os. Although the State
Department was well aware that Argentine cooperation is something less than
a prerequisite for a successful system of international commercial liberalism,
the spread of Perns brand of economic nationalism could mean the break-
down of any eorts toward economic peace.
,z
By using economic integration
to forward his own statist experiment, and by trying to extend that experiment
to Chile, Pern was striking a blow against free trade, sound national devel-
opment, and economic peace.
By signing and endorsing a pact that was an obvious repudiation of U.S.
principles and leadership, Chilean president Gabriel Gonzlez Videla seemed
willing to bolt the Good Neighborhood and cast his lot with Pern. Indeed,
Gonzlez Videlas program had already aroused considerable suspicion in
Washington. Like Pern, he had committed himself to economic inde-
pendence, industrialization, and a populistic redistribution of wealth; but
unlike Pern, he had forged an open alliance with the Communist party to
accomplish these goals. Not surprisingly, many in the State Department were
disturbed by the emerging entente between Gonzlez Videlas red-tinged
government and Pern. Radicals of the Left and Right seemed to be uniting
behind the common conviction that private enterprise capitalism was not a
viable system for promoting economic growth in Latin America. If, as former
Secretary of State Cordell Hull had once noted, the political line-up followed
the economic line-up, then Chile was following Argentina into rebellion
against U.S. leadership.
,
Therein lay the thinking that led the State Department to block Peronist
economic integration of the Southern Cone. Pern hoped to create some sort
of southern union as a vehicle by which Argentina could opt out of the liberal
capitalist world economy and bring the rest of the Southern Cone with it. We
cannot talk of an important building up of commercial intercourse . . . on an
exclusively private initiative basis, peronista ambassador Julio Lpez Muiz
toldChileans, because the problems whichwe are facing are of suchmagnitude
that they escape the scope of private solutions.
,,
For U.S. leaders, the Soviet
Unions reluctance to participate in their global economic program was a
serious but predictable blow, as were Britains eorts to hold on to its Sterling
bloc. Perns southern bloc was clearly similar in certain respects, and
Peronists awaited the inevitable counterattack from Washington, which, in
the words of one Argentine, does not want to lose its economic dominance
here.
,,
,z. State Department memorandum, Argentinas Post-War Economic Policies, zi March
i,,c, RG ,,, ,.,o.
,. Cordell Hull, The Memoirs of Cordell Hull (New York, i,,), i: c,.
,,. Bowers to secretary of state, z April i,,, RG ,,, cz,.,i.
,,. Memorandum for Bramulgia and Miranda, zz Febrero i,,;, AMREC, DP, Chile i,,c, Caja
io, Convenio, Legajo z, Expediente . See also Miguel Angel Guezales to Carlos Mathus Hoyos,
z, May i,,;, AMREC, DP, Chile i,,;, Caja ,, Expediente i.
iz : r i r r o a + i c n i s + o r \
That counterattack was soon forthcoming, though it would be more subtle
than the Argentines might have expected. Indeed, U.S. ambassador Claude
Bowers warned his superiors against any dramatic action that might arouse
nationalistic sentiment in Chile. Gonzlez Videla still had to convince the
Chilean Senate to ratify the pact, so Bowers suggested that the State Depart-
ment simply let the Chileans make the ght against the treaty.
,c
U.S. repre-
sentatives should remain silent inpublic andinsteadgive sotto voce advice behind
the scenes to Chilean senators and to Gonzlez Videla. If the State Department
worked openly to subvert the pact, Bowers argued, Pern could raise the
familiar cry of Wall Street imperialism and possibly rally nationalistic Chile-
ans to his cause. Under the circumstances, it was better to rely upon a rapier,
not a meat axe, to defeat the treaty, just as U.S. policymakers were quietly but
unobtrusively working to derail Perns domestic agenda.
,;
In short, few in the State Department wanted another explosive confronta-
tion with Pern. Instead, the Truman administration wanted Chilean opposi-
tion to develop without subjecting the opponents of the treaty to the demagogic
charge of Yankee pressure.
,
The State Department therefore followed Bow-
erss advice and was soon rewarded for its forebearance. Before the year had
ended, Bowers was reporting that Gonzlez Videla was becoming apprehen-
sive over our reaction, and the fact that we remain silent but clearly interested
is causing himsome concern.
,,
Larran, who had not spoken to Bowers in eight
years, suddenly sought him out, nervously inquiring about the U.S. reaction.
This was convincing proof, Bowers chortled, that our silence on the Argen-
tine treaty is eective.
co
Bowers did break that silence once, and in a decidedly threatening way.
Secretary of State James Byrnes instructed him to approach the Chilean
government and discuss informally with Gonzlez Videla two points that
were troubling the Truman administration. First, the i, trade agreement
between the United States and Chile supposedly provided reciprocal, uncon-
ditional and unlimited most-favored-nation treatment. Byrnes was curious to
knowhowthe Chileans were going to reconcile this provision with the blatantly
discriminatory features of the Argentine-Chilean pact. Second, Bowers was to
remind the Chileans that they had large and special responsibilities to conform
[to the] ITO Charter, as they had helped draft that document. Since the pact
with Argentina did not create a true customs union and was only the
extension of discriminatory preferences under the mere guise of a customs
,c. Bowers to Braden, i December i,,c, Claude Bowers Manuscript Collection (Bowers MSS
II), box c, Lilly Library, University of Indiana, Bloomington.
,;. Bohan to Nicholas Bowen, z February i,;, Papers of Merwin Bohan, Correspondence
File, Argentina, box c, Truman Library. See also, G. J. Dorn, Bruce Plan and Marshall Plan: The
United States Disguised Intervention against Peronism in Argentina, i,,;i,,o, International
History Review zi (June i,,,): i,z.
,. Bowers to Byrnes and Braden, i December i,,c, RG ,,, cz,.,i.
,,. Bowers to Braden, z December i,,c, Bowers MSS II, box c.
co. Bowers to Braden and Byrnes, January i,,;, RG ,,, cz,.,i.
Perns Gambit : i
union, Chiles position in the ITO would have to be reassessed. Bowers was
not instructed to make threats, rattle sabres, or otherwise brandish a big stick,
but merely to inform Gonzlez Videla of these apparent contradictions.
ci
The
implications were clear, however. If Chile ratied the Argentine treaty, it ran
the risk of losing its advantages under the ITOcharter and the U.S.-Chile trade
agreement of i,.
The response was almost immediate. Within a week of receiving Byrness
message, the Chileans summarily amended the treaty to meet U.S. specica-
tions. Larran announced in late January i,,; that the Chilean chancellery had
acted to comply with the ITO charter but did not mention Bowerss comments
and went so far as to ask the State Department not to give [the] impression
that [the] treaty was being modied in any way as a result of U.S. repre-
sentations. Just as U.S. policymakers did not want to provoke a nationalistic
response by showing their hand in the aair, Larran and Gonzlez Videla had
no desire to be painted as quislings to Yanqui imperialists.
cz
Within months, Chilean opposition to the treaty did surface, as Bowers had
predicted. Aside from the Communists, who viewed the pact favorably as a
step toward the formation of an anti-imperialist bloc, and Gonzlez Videlas
Radicals, who backed their leader, most other parties had serious reservations
about a treaty that thrust their nation, as one magazine put it, into the jaws of
the wolf.
c
Still, the Liberal Party and elements of the Conservative Party
seemed willing to ratify the pact if Gonzlez Videla moderated his eorts to
unionize rural workers in Chile a very popular program among his Commu-
nist supporters. The ensuing stalemate served the State Department well, and
in late September i,,; Bowers informed his British counterpart in Santiago that
I doubt that [Washington] will instruct us to protest unless prospects of the
treaty brighten considerably.
c,
Gonzlez Videla found himself in an untenable
position: torn between Perns overtures and the United States and, on the
homefront, between the demands of the Communist party and those of the
more traditional Chilean political parties.
Although Gonzlez Videla wavered, events soon forced his hand. In October
his erstwhile Communist backers, emboldened by a strong showing in o-year
local elections and weary of his vacillation, called a strike in the Chilean coal
mines that threatened to paralyze the nation. In desperation, Gonzlez Videla
appealed to Truman for emergency coal shipments that would allow him to
ci. Byrnes to embassy Santiago, i; December i,,c, and , January i,,;, RG ,,, cz,.,i.
cz. Bowers to secretary of state, i January i,,;, RG ,,, cz,.,i.
c. El Siglo, i Enero i,,;, ; Zig-Zag, z; Diciembre i,,c, i. See also Luti to Bramulgia, o
December i,,c, AMREC, DP, Chile i,,c, Caja io, Convenio, Legajo i, Expediente i; Memorandum
for Miranda and Bramulgia, Febrero i,,;, AMREC, DP, Chile i,,c, Caja io, Convenio, Legajo z,
Expediente ; and memorandum for Valenti, ic Febrero i,,, AMREC, DP, Chile i,,;, Caja ,,
Expediente z.
c,. Bowers to Leche, z October i,,;, Bowers MSS II, box c. See also memorandum for
Bramulgia and Miranda, Febrero i,,;, AMREC, DP, Chile i,,c, Caja io, Convenio, Legajo z,
Expediente .
i, : r i r r o a + i c n i s + o r \
crush the uprising in the mines. When Truman pledged U.S. support, Gonzlez
Videla expressed his deep appreciation and informed Bowers, almost with
tears in his eyes, that he wanted to work in closest cooperationwith the United
States.
c,
After breaking the strike, he swiftly eliminated the Communists from
his cabinet and enacted the Law for the Permanent Defense of Democracy,
which eectively banned the Communist party. His lot cast decisively, he also
entered negotiations that culminated in an Export-Import Bank loan and other
forms of nancial assistance from the United States. At the same time, he
abandoned his irtation with Pern and began looking for a way out of the
treaty with Argentina.
cc
While Gonzlez Videla still saw some value in acquiring Argentine loans
and tari concessions, the Conservative opposition became a blessing that
gave him a pretext for letting [the] treaty languish. His only interest now was
to ensure that Chile did nothing to prejudice her relations with [the United
States] or the world bank by proceeding with the treaty when she would quite
possibly be left holding the bag.
c;
Miranda and Pern recognized the shift
immediately. Although the Chilean economic situation remained desperate,
Gonzlez Videla was doing nothing to press forward with the pact, which he
had originally advertised as Chiles salvation. On the contrary, he was now
working with Conservatives and Liberals united in an anti-communist alli-
ance, supporting North American interests and opposing good relations with
Argentina. Gonzlez Videla, Peronists claimed, had renounced his reform
agenda in order to forge a reactionary alliance with the large landowners and
directors of American businesses.
c
This had been accompanied by a similar
entente with the U.S. government, which had in the end succeeded in carrying
the government of Chile . . . down paths chosen by Washington.
c,
With the prospects for ratication dimming, Pern tried to salvage the pact
by accusing the State Department of intervening against him. In May i,, he
announced in a speech before Congress that foreign interests had secretly
interfered in Argentinas dealings with Chile and Bolivia. On hearing this, U.S.
ambassador James Bruce reported to his superiors that the communists have
in some way unknown to us persuaded the Argentine government that the State
Department was instrumental in causing the non-armation of the Argentine
c,. Memorandum of conversation, Bowers and Gonzlez Videla, z, December i,,;, Bowers
MSS II, box c.
cc. Baily, The United States and the Development of South America, i;,;c; Brian Loveman, Chile:
The Legacy of Hispanic Capitalism (NewYork, i,), zc,z; Francis Parkinson, Latin America, the Cold
War, and the World Powers, :,,y:,,: A Study in Diplomatic History (Beverly Hills, i,;), ii,.
c;. Bowers to secretary of state, z April i,,, RG ,,, cz,.,i; Bowers to Armour and Daniels,
i November i,,;, RG ,,, cz,.,i.
c. Varas and Pallas to Lopez Muiz, , Septiembre i,,, AMREC, DP, Chile i,,, Caja ;,
Expediente ,; Portela to Lopez Muiz, i; Marzo i,,;, AMREC, DP, Chile i,,, Caja ;, Expedi-
ente ,.
c,. Lpez Muiz to Anadn, i, Abril i,,, AMREC, DP, Chile i,,, Caja c, Copias de las
notas de la embajada argentina en Chile.
Perns Gambit : i,
trade agreement with Chile. Acting Secretary of State Robert Lovett told his
ambassador to categorically deny any statements indicating that the U.S.
government has exerted pressure to prevent ratication, but condentially
conceded that the State Department did object in informal discussion. The
State Departments goal had been to impede the treaty, but to do so by acting
behind the scenes. This it succeeded in doing. Pern was not given the oppor-
tunity to credibly portray himself as the victim of U.S. depredations, and the
treaty was never ratied.
;o
While peronistas initially may have considered Gonzlez Videla to be a
natural ally, events in Mirandas second target, Bolivia, seemed to bode ill for
dreams of a southern bloc. Perns ally, Lieutentant Colonel Villarroel, had
been toppled and executed in July i,,c, allowing the traditional oligarchy to
reassert itself.
;i
The Peronists had no illusions with regard to the new regime,
recognizing that the United States will have great inuence in the new
government. Still, Bolivia remained completely dependent on Argentine food
exports and therefore vulnerable to Argentine pressure. Argentine ambassador
Mariano Buitrago Carillo believed that no one can replace us
;z
and urged his
superiors to present the Bolivians with a comprehensive trade treaty as soon as
possible one that would allowArgentines to penetrate Bolivia economically
and thereby change its social attitude and international orientation. Argen-
tina has a particular interest in establishing close ties with Bolivia, he con-
cluded, because this is the easiest place for the inltration of Yankee
imperialism which has to be combatted in South America.
;
Evidently sharing this belief, Miranda presented the newBolivian junta with
a pact that mirrored the Argentine-Chilean treaty in December i,,c, only
weeks after making his rst overture to Gonzlez Videla. Under its terms, taris
would be lowered and loans oered to build rail lines and newmining facilities.
The Argentines would receive quantities of Bolivian tin, lead, wolfram, coca,
and other products through bilateral barter, while the Bolivians would be
guaranteed food imports. For Pern, the real prize was the apparent willingness
of the Bolivians to permit Argentine exploitation of the iron deposits in the
region of Mutn. Argentines had long sought access to the gigantic quantities
of ore in this region but had in the past been rebued by Brazilian leaders
determined to prevent the emergence of an Argentine-Bolivian alliance.
;,
;o. Bruce to secretary of state, zz April i,,, RG ,,, ;ii.,; Lovett to embassy Buenos Aires, ,
April i,,, RG ,,, cz,.,i. See also Lpez Muiz to Anadn, , Mayo i,,, AMREC, DP, Chile
i,,, Caja c, Copias de las notas de la embajada argentina en Chile.
;i. James M. Malloy, Bolivia: The Uncompleted Revolution (Pittsburgh, i,;o), izzc.
;z. Movimiento Revolutionario de Bolivia, zi Julio i,,c, AMREC, DP, Bolivia i,,c, Caja i,
Expediente i, Anexo z, Parte i.
;. Buitrago Carrillo, memorandum, z Noviembre i,,;, AMREC, DP, Bolivia i,,;, Caja i,
Expediente z; Flack to secretary of state, z; December i,,;, RG ,,, ;z,.,. See also Rios Mrmol
a Bramulgia, Junio i,,, AMREC, DP, Bolivia i,,, Caja i, Expediente z.
;,. The Brazilians apparently also made a counterproposal to Bolivian president Enrique
Hertzog, promising economic aid to prevent the ratication of the pact. Since the United States
was doing nothing substantial toward this end, Brazil might conceivably be considered as pulling
ic : r i r r o a + i c n i s + o r \
Despite knowing that the treaty would antagonize both Brazil and the
United States, Miranda pressed forward, condent that the rewards for Argen-
tina could be substantial. There was no good reason why Bolivian iron, like
Chilean copper, could not augment the peronista industrialization scheme. Just
as Pern envisioned an Argentine state operated copper industry based on
imports from Chile, so too would Bolivian minerals fuel the development of
Argentine steel and tin mills. In the process, Bolivia would be drawn away from
the United States and Brazil and into the Argentine orbit. Once again, Pern
aimed to meld his own domestic industrialization program with the spread of
Argentine inuence in the Southern Cone, to secure vital raw materials and
markets in the region, and to undercut the position of the United States in the
process.
;,
Despite signing the treaty, the Bolivians apparently did not seriously enter-
tain the notion of aligning with Pern. More likely, new Bolivian president
Enrique Hertzog was simply stalling the Argentines, perhaps hoping to exact
some concessions from the United States and secure his own rather precarious
position. Vctor Paz Estenssoro and other members of the defeated regime had
ed to Buenos Aires after Villarroels death, plotting their return to Bolivia. In
the beginning, Paz Estenssoro reported, Pern had received the rebels with
open arms; but once negotiations with Hertzog seemed to be bearing fruit, it
was almost impossible for any of the MNR exiles to get in touch with any
important Argentine ocial.
;c
Although Peronists argued that Estenssoros
faction was the only one which could respond to our overtures for the
formation of a bloc against the penetration of Yankee and Brazilian imperi-
alisms allied against us, Perns dealings with Hertzog were promising enough
that he did not oer signicant aid tothe exiles.
;;
Onthe other hand, the Hertzog
government barraged U.S. ocials with stories detailing the real or imagined
perdity of Pern and arch end Miranda. This duplicity is revealing.
Hertzog continued his negotiations with Pern to dissuade the Argentine from
lending assistance to Paz Estenssoro and out of fear that an Argentine-Chilean
alliance would isolate his nation but covered his bets by regularly denouncing
Pern to the United States.
;
our own chestnuts out of the re. Dawson to Wells, Braden, and Briggs, i, March i,,;, RG ,,,
;z,.,; Flack to secretary of state, c March i,,;, RG,,, cz,.,i. See also Rios Marmol a Bramulgia,
i Agosto i,,, AMREC, DP, Bolivia i,,, Caja i, Expediente z.
;,. Carles, Sobre inltracin brasilea en Santa Cruz de la Sierra, , Septiembre i,,c,
AMREC, DP, Bolivia i,,c, Caja i, Expediente ii, Anexo i; Mrmol to Bramulgia, ; Septiembre
i,,, AMREC, DP, Brasil i,,, Caja , Expediente z; Messersmith to secretary of state, , March
i,,;, NA, DS, RG ,,, cz,.,i.
;c. Robert J. Alexander, The Bolivaran Presidents: Conversations and Correspondence with Presidents
of Bolivia, Peru, Ecuador, Columbia and Venezuela (London, i,,,), ici;.
;;. Rios Marmol a Bramulgia, i Agosto i,,, AMREC, DP, Bolivia i,,, Caja i, Expediente z.
;. Flack to secretary of state, , June i,,, RG ,,, ;z,.,; Espy to Hall, z May i,,;, RG ,,,
;z,.,; Flack to secretary of state, zo March i,,;, RG ,,, cz,.,i.
Perns Gambit : i;
Whereas Gonzlez Videla in Chile had seriously entertained Perns pro-
posals, Hertzog, wedded completely to the old order, had no intention of
allowing the deal to be consummated. As it became clear that the Argentine-
Chilean treaty was not going to be ratied, the Bolivians started to systemati-
cally water down their pact with Argentina. When it was nally ratied in i,,,
it was but a shadow of the original document, and almost meaningless.
;,
Although Pern also accused the United States of suborning this pact, Lovett
was able to earnestly deny any intervention in this case. Despite Perns
accusations, U.S. policymakers had not been forced to apply signicant pres-
sure, condent that the Bolivian elite would not wed itself to the volatile
Peronist revolution. Gonzlez Videlas irtation with Pern and the Commu-
nists had been credible enough to win him concessions from Washington, but
the Bolivians were unable to elicit a similar response.
Although the State Department was able to safely stand on the sidelines
while Argentina negotiated with Bolivia, Perns concurrent initiative toward
Peru did not allow that luxury. Determined to reverse Perus gravitation
toward the United States,
o
and perhaps emboldened by the results of their
propaganda campaign, Pern and Miranda oered a third treaty in early i,,;
to President Jos Luis Bustamante y Rivera, the embattled chief of a nation
wracked by industrial strife, agricultural collapse, and economic chaos. Eyeing
Peruvian iron ore, coal, and oil, Miranda found Bustamante to be reluctant and
in April drastically increased the price of Argentine wheat exports to Peru.
i
The idea, clearly, was to accentuate Perus economic dependence upon Argen-
tina, temporarily resurrect economic blackmail, and thereby force the Peru-
vians into a trade deal similar to those oered to Bolivia and Chile. U.S.
ambassador Prentiss Cooper recommended that the State Department send
wheat and food oils to forestall any hard bargaining on the part of Argentina,
but Assistant Secretary of State Dean Acheson reluctantly turned down the
appeal.
z
Fearful that oering U.S. wheat at this late date would be interpreted as a
blatant intervention and would be pretty dicult to justify, U.S. ocials
eventually opted instead to arrange the sale of Canadian wheat to Peru. The
embassy presented a memorandum to the Peruvian Foreign Oce stating its
intent to meet Perus food needs, condent that the informal approach would
dissuade the Peruvian Government from completing an arrangement with the
Argentine Government. This condence was not misplaced, as the Peruvians
decided to abandon the Argentine project once the Canadian wheat deal had
;,. Argentine embassy La Paz, condential memorandum, , Agosto i,,, AMREC, DE,
Brasil-Bolivia, Legajo z; Flack to secretary of state, , March i,,,, RG ,,, ;z,.,.
o. Embajada Lima, Memoria anual, i,,;, AMREC, Peru i,,;, Caja iz, Expediente ,.
i. Cooper to secretary of state, zz March i,,;, RG ,,, cz.,i; embassy Lima to secretary of
state, ; April i,,;, RG ,,, cz.,i.
z. Cooper to secretary of state, zz March i,,;, RG ,,, cz.,i. See also Acheson to embassy
Lima, zo March i,,;, RG ,,, cz.,i.
i : r i r r o a + i c n i s + o r \
materialized.

Once again the State Department had utilized quiet persuasion

to impede Argentine economic expansion and Perns eorts to forge an
anti-U.S. bloc in the Southern Cone.
In the end, Perns dreams of forging an austral bloc failed miserably, but
they are nonetheless instructive. His analysis of the impediments to Latin
American modernization was sophisticated, and the solution he presented was
bold and novel. Pern had proposed that public funds might replace private
foreign investment and that Latin Americans might nance their own industri-
alization, independent of foreign tutelage, through regional integration. It
was an analysis he would continue to press until his death, persisting in the
belief that the year zooo would see South America either united or conquered.
,
Still, Pern himself must shoulder much of the blame for the failure of his
bold challenge, which was riddled with contradiction, to say the least. At the
same time he was trying to win over Gonzlez Videla, for example, peronistas
in Santiago were apparently plotting with Chilean army ocers attempting to
seize power in that country.
,
Similarly, he was providing a haven for Bolivian
revolutionaries and his propaganda in Peru was, at the very least, encouraging
opposition to Bustamantes government dissent that Perns friend General
Manuel Odra would exploit during his i,, coup.
c
Lending tacit support for
revolutionaries like Odra and Estenssoro, and utilizing economic blackmail
against governments that he was wooing, did little to build Perns image as a
trustworthy ally. By failing to either consistently support revolution or coop-
erate unconditionally with established governments such as Gonzlez Videlas
or Bustamantes, both his revolutionary propaganda and his posture as South
Americas benecient nancier were weakened. Furthermore, while Pern
promised that his overtures would uplift the region as a whole, they were all
too easily interpreted as a revival of old Argentine dreams to dominate the
Southern Cone, for clearly Argentina would prot most as the industrialized
economic center of any southern bloc.
;
Above all else he was an Argentine
. Martin to Tewksbury, zi March i,,,, RG ,,, cz.,i.
,. Pern, Doctrina universal: continentalismo, ecologa, universalismo [Universal doctrine: Conti-
nentalism, ecology, universalism] (Buenos Aires, i,;,); Siracusa memorandum, zz January i,,,,
RG ,,, c,.oo.
,. Machinandiarena de Devoto, La inuencia del justicialismo en Chile, z,,.
c. Perns role in Odras i,, golpe de estado (if any) is still unknown. Even Bowers, who
reported that he had not met a single South American who has any doubt that [Odras coup was]
inspired in Buenos Aires, conceded that we have no documentary proof. Nonetheless, accord-
ing to Oderigo, the members of the new regime repeatedly expressed their respect and admira-
tion for Pern, while Odra professed great friendship with General Peron, whom he admires
and esteems. Bowers to secretary of state, January i,,,, Bowers MSS II, box ;; Oderigo to Paz,
iz Enero i,,, AMREC, DP, Peru i,,,, Caja z, Expediente ii; Oderigo to Paz, ii Agosto i,,,,
AMREC, DP, Peru i,,,, Caja z, Expediente . See also Bowers to secretary of state, ; December
i,,, RG ,,, z,.oo; and embassy Lima to Paz, Septiembre i,,,, AMREC, DP, Peru i,,,, Caja
z, Expediente ,.
;. Escud, Argentine Territorial Nationalism. Journal of LatinAmerican Studies zo (May i,):
i,c,.
Perns Gambit : i,
nationalist, and if exploiting his neighbors was the price he had to pay for
Argentine greatness, few doubted that he would do so.
Certainly, U.S. leaders hadno suchdoubts. Theywere convinced that Perns
program, if allowed to succeed, would subvert their own eorts to forge a more
open international economy based on convertible currencies and multilateral
trade. Nor was that the worst of it. With its emphasis on state-centered
development, it challenged the U.S. faith in the power of private enterprise, just
as his eorts to consolidate a southern bloc posed a real threat to U.S. leadership
in the region. U.S. ocials had gotten used to a larger government role in
managing their own modern economy, but Pern had pushed too far in this
direction, andin so doing hadraised the prospect of replacing private enterprise
with an economic totalitarianism. Similarly, U.S. leaders were in favor of
regional economic integration and were pushing toward this goal in Western
Europe. But they did not want integration to result in an autarchic economic
bloc of the sort Pern apparently envisioned. Not only would Perns success
exclude or limit U.S. inuence, it would lead to the sort of statism and controls
that Americans associated with depression and war. For these reasons, they
opposed Pern on almost every front, through acting so far as possible in a
subtle fashion that would not oend Latin American nationalists. And in the
end these eorts combined with Argentine blunders to guarantee U.S. success.
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