All-American Plan

Franklin Roosevelt slept through the fall of France with a clear conscience, awaking in time for the 8 a.m. radio newscast. For this moment he was prepared, as ever. Now was the time, at last, to jerk from his hat something bigger than a rabbit. Months ago, the President had pondered the grave new world, had brooded on the dread possibility of a United States of Germany which would have terrific economic striking power.* As usual, the President asked aides to submit suggestions. An adviser with a real passion for anonymity, working under Harry Hopkins and Adolf Berle, conceived a formula for a giant international economic union of North and South America.

This plan (which four members of the Cabinet are now pondering, and expect to adopt with slight modifications) would meet economic force with force. Its big proposal: to buy up all South America's exportable surplus (see p. 71).

About 55% of South American exports normally go to Europe. Before the war, the U. S. took 32% of South America's exports, Germany took 17%. If Germany commanded continental Europe, she would be roughly twice as large a South American buyer, therefore twice as important to South American sellers. A Nazi Europe could deal separately with 21 American countries, could bring dissidents to heel by transferring advantages to others.

So if the U. S. is to defend South America, its defense must be economic as well as military. Under the proposed plan, one international corporation would be set up, subject to Congressional and diplomatic approval, to act as a single clearing house.

Example: The Corporation would open up a $300,000,000 credit for Brazil. Brazil would have to use that credit for purchases in the U. S. or ask the Corporation to buy abroad for her. Then the Corporation would take over all Brazil's exportable surpluses: coffee, cotton, etc.

The U. S. at its option would then barter, sell, give away, dump or destroy those goods. If the U. S. sold Brazilian coffee in Europe, it would reduce the $300,000,000 credit by the amount sold. Theoretically such transactions should be done at a profit--and profits were mentioned at the White House--but no profits can be foreseen. Actually, the program would probably show a dead loss of $300,000,000 to $500,000,000 annually. This cost, Mr. Roosevelt was advised, would be better defense than $500,000,000 in tanks.

The proposed corporation would be a two-billion-dollar agency, set up by direct Congressional appropriation, would include the proposed inter-American bank, to which there are already eight signatories.

This plan was based on the grimmest of assumptions: i) that Germany will shortly crush England; 2) that U. S. policy is utterly committed to military and economic defense of every speck of this hemisphere; 3) that the U. S. is strong enough to protect South America militarily.

The plan, enormously costly, emergency in nature, totalitarian in control, was Franklin Roosevelt's answer to the desperate news from abroad. Last week, with the first unmistakable nips of Nazi economic pincers in South America (see p. 32), the need for U. S. action became desperately urgent. This plan for all-American economic defense became the biggest "must" on the Government's program.

Signs were that it would be rushed through Congress, adopted by an inter-American conclave, put into action at the earliest possible date. Still the President was optimistic, still he worked hard at his mountainous desk, with the easy swing of a veteran fire chief who knows that no five-alarm fire can last forever, knows too that his men are not only playing hoses on the flames but wetting down all adjoining buildings. The fire cannot be put out now, he seemed to believe, but it must not spread--even if fire must be met by fire.

* It was the day after seeing Roosevelt, month ago, that Dorothy Thompson wrote in her column that the real Nazi danger lay in economic penetration of South America.

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