perón’s gambit

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.

Perns Gambit: The United States

and the Argentine Challenge to the

Inter-American Order,

The threat which gives us the worst case of cold shivers, State Departmentofficer Guy Ray wrote in , is that of a southern bloc dominated byArgentina. The Truman administration had good reason to fear the emer-gence of Colonel Juan Domingo Perns New Argentina.Pern had dedicatedhimself to a dramatic revision of Argentinas social hierarchy and to a programof state-driven economic growth, both of which stood in stark contrast to theliberal capitalist order favored by U.S. policymakers. What is more, Pern didnot confine his vision to Argentina but worked diligently to export his populistbrand of state corporatism to the other nations of the Southern Cone of SouthAmerica. 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 numberof separate nations and to create instead an integrated southern bloc behindArgentine leadership.

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 theMarshall Plan Perns program relied far more heavilyon statist interventionthan most U.S. officials deemed necessary or wise. They had all witnessed theGreat Depression, the rise of fascism, and the coming of World War II, and thelesson they had learned was that economic statism of the sort promoted byPern spawned unnatural or artificial industries, constricted global trade,

D H, Vol. ,No. (Winter). The Society for Historians of AmericanForeign Relations (SHAFR). Published by Blackwell Publishing, Inc., Main Street, Malden,MA,, USA andCowley Road, Oxford, OX JF, UK.

*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 thedevelopment of theideas put forward in this article. Financial supportforthis projectwas providedin part by the Tinker Foundation.

. Rayto secretaryof state,January , General Recordsof the Departmentof State,RecordGroup, ., National Archives II, College Park, Maryland (hereafter RG, with file number).

. Bowers to secretary of state,June, RG,.. See also Samuel BailyThe United

States and the Development of South America,(New York, ),; and Robert Alexander,Prophets of the Revolution: Profiles of Latin American Leaders(New York, ),.


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andled todepressionand war. They thereforededicated themselves tobuildinga liberal capitalist order based on convertible currencies, multilateral trade,corporate capitalism, and private enterprise and, with this goal in mind, workedto dissuade Latin Americans from adopting the sort of state-centered corpora-

tism that Pern envisioned. In their eyes, Peronism utilized policies andstrategies disturbingly similar in some respects to those of European fascismand communism, and it appealed to the same nationalistic working-classconstituencies.

Nor was the State Department completely offthe mark. Despite strong U.S.opposition, Pern had won the Argentine presidency in Marchby mobi-lizing a populistic alliance of workers, the army, and the urban poor. Once inpower, moreover, Argentinas Number One Worker had dedicated himself tothe cause of industrialization, economic diversification, nationalization of

foreign investment, and autarchic self-sufficiency, arguing that Argentinastraditional agrarian economy doomed his nation to remain an underdevelopedexporter of raw materials. Presaging dependency theorists and echoing oldnationalist appeals, Pern concluded that Argentina could not in the long run,continue to export only raw materials if its workers hoped to achieve astandard of living just one-quarter as high as that of the average Americanworking man. Toward this end, he instituted a program of rapid, state-driveneconomic growth. The cornerstone of his reform effort was to be theInstitutoArgentino para la Promocin del Intercambio(IAPI), a government import-export

monopoly that promised to use technocratic expertise to translate Argentineagricultural wealth into industrial development. In theory, at least, IAPI wouldbreak the back of the old agropastoral and commercial elite that had raised fatcows 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 wereveterans of the battle against fascism and were in certain respects very much the heirs of CordellHull. In the Southern Cone, Byrnes selected George Messersmith who had served in Germanyduring thes and Austria during theanschluss as ambassador to Argentina and Joseph Flack,

another veteran of the Berlin embassy, to serve in La Paz. With Gen. Francisco Francos oldnemesis, Claude Bowers, serving in Chile, no small part of the team that had fought fascism inEurope during the s had been reunited in South America. Claude Bowers, Chile through EmbassyWindows, (New York, ); Jesse H. Stiller,George S. Messersmith: Diplomat for Democracy(Chapel Hill,); Lloyd Gardner,Economic Aspects of New Deal Diplomacy(Boston,); Michael

J. Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, (Cambridge, England,),,.

. Michael Grow, The Good Neighbor Policy andAuthoritarianism in Paraguay(Lawrence, KS, ),esp.; Hogan,The Marshall Plan, esp..

. Embassy Buenos Aires to secretary of state, Transmitting Memorandum Furnished byEnrique Faltisek with reference to Conversation with Colonel Pern,December, RG,.; Antonio Cafiero, Cinco aosdespues. . . [Five years after . . .] (Buenos Aires, ), ; Jorge

Fodor, Perns Policies for Agricultural Exports, inArgentina in the Twentieth Century, ed. DavidRock (London, ), ; Alejandro Horowicz,Los Cuatros Peronismos[The four Peronisms](Buenos Aires,),.

. Instituto Argentino para la Promocin del Intercambio,Memoria Anual[Annual Report],Ejercicio(Buenos Aires,); see also Paul Lewis,Crisis of Argentine Capitalism(Chapel Hill,),.

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community (comunidad organizada) capable of bringing social justice to thelower classes andfinally winning Argentinas economic independence.

Pern argued that his program constituted nothing less than a major newThird Position between capitalism and communism, and one that was also

appropriate for other developing nations. Indeed, in December Pernmade hisfirst efforts to formally disseminate the Third Position outside ofArgentina by dispatching dozens of labor attachs to Argentine embassiesthroughout Latin America.Drawn from theranks of loyal unions, these attachswere instructed to report on, make contact with, and influence workers in othernations. By advertising the tangible benefits thatperonismohad brought to theArgentine descamisados (shirtless ones), they were to extend Perns cult ofpersonality and mobilize discontent against both the established order and theUnited States. As two Congress of Industrial Organizations (CIO) officials

returning from a tour of Latin America put it, Perns envoys comprised anindefatigable task force whose propaganda line was nothing short of adenunciation ofYanquiImperialism, racial discrimination and exploitation ofLatin American workers by American corporations.

By promoting hisbrand of state-driven economic development, Pern aimedto challenge U.S. hemispheric leadership, which he saw as a barrier to progress,and to unite the disparate strands of Latin American nationalism under hisbanner. Through true revolution, his spokesmen argued, Argentina hadescaped the thinly veiled plutocratic facade of Anglo-Saxon democracy,

broken the chains of gold, and created instead a popular democracy thatserved all members of society. We are not anti-American, Peronists insisted,but we do not desire to march to the beat of foreign drums. But for Pernto become the paladin for a Latin bloc, his propagandists had tofirst capturethe attention of South Americans and then discredit the United States.

Peronistaefforts in Peru illustrated well both the tone and the aims of thisapproach. According to Argentine ambassador Hugo Oderigo, the UnitedStates was absorbing the economy of Peru without bringing progress orassuring the economic liberty of the people. A number of disenchanted

. Mann to Brown, December , RG, .; Juan Domingo Pern,La comunidadorganizada[The organized community] (Buenos Aires,).

. Alberto Conil Paz and Gustavo Ferrari,Poltica exterior argentina, [Argentinasforeign policy, ] (Buenos Aires, ),; Joseph S. Tulchin,Argentina and theUnited States:

A Conflicted Relationship(Boston,),.. Martin Kyne and Ernest Schwarz Report on Trip to Latin America,October, James

Carey Papers, box , Walter Reuther Archives of Urban and Labor History, Wayne StateUniversity, Detroit, Michigan.

. Periodico Seminal del C.G.T., Enero , Rollo , Fundacin Simon Rodriguez (FSR),

BuenosAires;Hoyt toBraden, Briggs,Trueblood, Mann, andLyon, January , RG, Recordsof the Office of American Republics Affairs, Memoranda Relating to Individual Countries(MRIC): Argentina. See also Carlos Escud,La Argentina: Paria Internacional?[Argentina: Interna-tional pariah?](Buenos Aires,),.

. E. Henry Norweb to secretary of state,July, RG,.; Hoyt to Braden, Briggs,Trueblood, Mann, and Lyon,January, RG, MRIC: Argentina.

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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 hearpeople 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. Toencourage the spread of this sentiment, the embassy staffbroadcast a weeklyradio program, the Voice of Argentina, which detailed the principal accom-plishments of our country, and tirelessly distributed pamphlets, booklets, andmagazines explaining Perns social work, solution of economic problems,recuperation of the country, and orientation in international politics.

But just as Latin America was taking note of Perns ideological offensive,so too were policymakers in Washington. Although Argentine proponents ofthe Third Position supposedly denounced both Communism and American

imperialism, the emphasis, U.S. statesmen lamented, was sadly but clearly onthe latter. According to Ambassador James Bruce, Perns attacks on Yanquiplutocracy, imperialism, and racism paralleled those of Vishinsky or Molo-tov. In other words, the line adopted by Argentine labor is very similar tothe line adopted by the communists. To North American eyes this similaritywas reinforced by Eva Pern, the presidents wife and self-styled benefactressof the downtrodden, and Luis Prestes, the powerful head of the BrazilianCommunist party. The former repeatedly proclaimed that she would join theCommunists if this was the only way to press herfight against privilege and the

oppressive capitalist system, while the latter proclaimed Pern to be a fellowcrusader against capitalism in the last Latin American nation in whichYankee capital does not predominate. When a young Fidel Castro soughtsupport against Yankee imperialism in, he turnedfirst not to the SovietUnion but to Peronist emissaries in Cuba who helpedfinance his famous tripto Bogota.

If Argentine propaganda served as a call for political unity against the UnitedStates and the liberal capitalist order that had retarded Latin American devel-opment, it also featured a creative appeal to religious, cultural, and ethnic

. Oderigo to Bramulgia,Marzo, Archivo del Ministerio de Relaciones Exteriores yCulto (AMREC), Departamento Poltico (DP), Peru , Caja , Expediente , Buenos Aires,Argentina; Oderigo to Bramulgia, Septiembre , AMREC, DP, Peru , Caja , Expediente; Embajada Lima, Memoria Anual,, AMREC, DP, Peru, Caja, Expediente.

. Embajada Lima, Memoria anual, , AMREC, Peru , Caja , Expediente ;Embajada Lima, Memoria anual,, AMREC, Peru, Caja, Expediente.

. Dearborn to Tewksbury, Woodward, Daniels, and Armour,May, RG,.; seealso Pern,La fuerza es el derecho de las bestias[Force is the right of the beasts] (Santiago,),.

. Dearborn to Tewksbury,December, RG, MRIC: Argentina.

. Dearborn to Tewksbury, Woodward, Daniels, and Armour,May, RG,... Maleady, Fanatical Seora Pern would go Communist,March, RG,.. 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 theSoviet Union] (Buenos Aires, ), ; Davis to Flack, March , RG, MRIC: Argentina.

. Tad Szulc,Fidel: A Critical Portrait(New York, ),.

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solidarity. Perncould claim tohave at leastthenominalbackingof theCatholicchurch, quite unlike either the Communists or the predominantly ProtestantUnited States. Pern, to be sure, had never received official papal approval, butimportant members of the clergy had backed him and his brand of state

corporatism that harkened back to the papal encyclicals,Rerum Novarum()andQuadragesimo Anno(). Furthermore, Pern also enjoyed close ties withGeneralissimo Francisco Franco, which allowed him to capitalize on culturalties based on much of Latin Americas blood relationship with Spain. Whena new Argentine ambassador arrived in Cuba, for example, he made a point ofreminding the Cubans of the common noble Hispanic origin and of theCatholic, Apostolic, and Roman religion that they shared with the Argen-tines. Ironically, the same Latin American Catholicism that had earlier pro-vided a natural bulwark against atheistic communism was now being made into

a wedge by Pern.At the outset theperonistashad entertained the hope that they might be able

to unify not only the labor unions of Latin America but also the AmericanFederation of Labor (AFL) and the CIO behind their propaganda line.Indeed, they invited AFL representatives to Buenos Aires in latein orderto cement an alliance against both Yanquiplutocracy and communism.

Believing that the U.S. unions had suffered at the hands of imperialistic WallStreet capitalism and would therefore welcome the support of their southernbrethren, the Peronists even hoped that ArgentinasConfederacin General deTrabajadores(CGT) could spearhead the AFLs new, anti-Communist, inter-American labor federation. Arguing that theEnglish-speaking unionists of theUnited States evidently cannot, as the minority they are, take the initiative toestablish any system of hemispheric union cooperation, the CGT hoped tosecure a major international role for itself and to impress U.S. unionists withthe maturity of the Argentine proletariat.

Unsurprisingly, however, the AFL determined that the Peronist unions werenearly as great a danger to the hemisphere as the Communists themselves andopted to forge an alliance with the State Department to combat both. Serafino

Romualdi, the AFLs foremost Latin American specialist, argued that Pernsmilitaristic totalitarian type of propaganda, like that of the Communists,

. Howard J. Wiarda,Corporatism and National Development in Latin America(Boulder, );Primera Plana, Octubre , ; ibid., Noviembre , ; ibid., Noviembre , .

. Norweb to secretary of state,July, RG,.. See also Hoyt to Briggs, Wright,and Mann,March, RG, MRIC: Argentina.

. Periodico Seminal del C.G.T., Enero , Rollo , FSR. See also Serafino Romualdi,Presidents and Peons(New York, ),; Joseph Page,Pern(New York, ),.

. Periodical Seminal del C.G.T.,January, Rollo, FSR;Periodico Seminal de la C.G.T,

Julio, Rollo, FSR. See also Ferrer Vieyra, Informe sobre el movimiento huelgista ocurridoen los EE.UU desdea, n.d., AMREC, DP, EE.UU., Caja, Expediente.

. Serafino Romualdi speech at Rutgers,June, Papers of Serafino Romualdi, Interna-tional Ladies Garment Workers Union Collection,//, M. P. Catherwood Library, CornellUniversity, Ithaca, New York; Romualdi, Presidents andPeons,, ; RonaldRadosh,AmericanLabor and United States Foreign Policy(New York,),.

Perns Gambit :


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germinates very well in the psychologies of people who are victims of confu-sion and of political disillusionment and economic suffering. Communismand 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 theYankee imperialists anddrivethem out of the country, and will put the capitalists, including our own, intheir place. But while the State Department regarded the Soviet Unionshalf-hearted efforts to destroy the influence of the United States and createantagonisms within the hemisphere as little more than minor irritants, Pernsnationalist, Hispanicist, and class-based appeals seemed to be more formidable,at least in.

Although Perns efforts were clearly designed to weaken U.S. prestige and

win adherents to his own system of state corporatism, there was little that theStateDepartment could do tocounter them directly. As U.S.chargJohn MoorsCabot noted,

With a disproportionately large part of the economic wealth of the countryin the hands of foreigners and a selfish, Europeanized plutocracy whichnever did an honest lick of work in its life, this country has been over-ripefor reform. Pern has been practically thefirst man to do anything effectiveabout 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 corruptpolitical predecessors.

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 benefit of the doubt, as a sisterHispanic country. Moreover, he cautioned that assailing Pern who hadundeniably won a free, democratic election and was actively enriching the lowerclasses would only foster the perception that Yankee imperialists opposedany Latin American economic development. After all, the United States hadtaken no action against openly dictatorial leaders in the Caribbean and Central

. Romualdi, draft of memorandum, May , Romualdi Papers, //. See alsoRomualdi speech at Rutgers University,June, Romualdi Papers,//.

. Braden to Lovett and Armour,June, RG,... Central Intelligence Group, Soviet Objectives in Latin America, April , ORE

Report 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 inLatin America: Democracy, Labor, and the Left, inLatin America between the Second World War andthe Cold War,, ed. Bethell and Roxborough (Cambridge, England, ),.

. Cabot to Pepper,April, John Moors Cabot Papers, Argentina, (on microfilm), HarryS. Truman Presidential Library, Independence, Missouri.

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America such as Tiburcio Caras, Rafael Trujillo, and Anastasio Somoza,Betancourt argued, because U.S. capital still predominated in their nations.

U.S. officials had other reasons to fear that a direct counterattack againstPerons propaganda would backfire. The State Department had launched such

an assault on Pern prior to his election by publishing theBlue Book, a catalogof his alleged ties with the Nazis, but Argentinas Number One Worker hadmanaged to transform the attack on him into one on Argentine sovereignty andhad used it to rally patriotic Argentines to his cause. Well aware that the meremention of U.S. intervention raised hackles on the back of every politician asfar south as Cape Horn and that our unilateral blasts have alienated peoplethroughout the Hemisphere, including many who have hitherto opposedPern, U.S. statesmen concluded that strong action against the only man whohad . . . achieved some successes in really helping thelowerclasses might revive

old Latin American fears and tear to ribbons the precious amity built byFranklin Roosevelts Good Neighbor policy. Furthermore, engaging in anopen propaganda battle with Pern would only give him a forum to discuss hisbrand of state-centered corporatism at a time when U.S. leaders were trying todiscourage any discussion of alternatives to liberal capitalism.

In short, U.S. policymakers could not openly oppose Pern without riskingthe perception that Yanqui plutocrats were working to hold back LatinAmericas economic growth by opposing a potentially viable developmentalstrategy. While Pern may have hoped for another confrontation that would

increase his prestige as a revolutionary spokesman, U.S. policymakers refusedto oblige him, despite being constantly embittered by being kicked in the rearwhen they werent looking. For the time beingat least, the self-styled Paladinof Social Justice would be able to continue to pluck the eagles feathers andmake the imperialist United States a whipping boy without fear of openretaliation.

. Dawson to secretary of state,February, RG,... Gary Frank,Juan Pern vs Spruille Braden(Lanham,); C. A. MacDonald, The Braden

Campaign and Anglo-American Relations in Argentina,, inArgentina Between the GreatPowers, , ed. Guido Di Tella and D. C. Watt (Pittsburgh, ), ; Rapoport,GranBretaa, Estados Unidos y las clases dirigentes argentinos,[Great Britain, the United States,and the governing classes of Argentina,] (Buenos Aires,).

. Cochran to Cabot, January , and Cabot to Pepper, June , Cabot Papers,Argentina; Oakley to Messersmith, December , George S. Messersmith Papers, ,University of Delaware Library, Newark.

. Stephen G. Rabe, The Elusive Conference: United States Relations with Latin America,,Diplomatic History(Summer):.

. Griffis to Miller, August , Records of the Assistant Secretaries of State (RASS), lotfileD, Subject File, box, Argentina Folder, National Archives II.. Periodico Seminal del C.G.T., Febrero , Rollo , FSR; Cabot to secretary of state,

General Survey of the Political Situation in Argentina, January, RG, Records of theForeign Service Posts, Buenos Aires (BA), National Archives II; Embassy Buenos Aires toDepartment of State,March, RASS, lotfileD, Subject File, box, Argentina Folder.

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Indirectly, however, the United States could act and act effectively, as it didto counter Perns attempt to advance his cause by capitalizing on food sur-pluses in Argentina and shortages elsewhere. Peronists learned quickly that thepostwar 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 Peronistfunctionaries used IAPI to slow or stop critically needed food shipments untilother nations acceded to Argentine demands. By focusing on neighboringstates, Peronists added a new dimension to their ideological gambit and evi-dently hoped to instill a more cooperative attitude in those nations that mightcomprise a Southern Bloc. There were examples of thisblackmail in Pernsdealings with Bolivia and Brazil, but the most notable instance occurred inmid-when Pern moved against his foes in Uruguay.

Throughout his presidential campaign in late and early , Pern hadbeen blistered by violent and tendentious propaganda emanating from Uru-guayan journalists and anti-Peronist refugees or exiles residing in Mon-tevideo. After emerging victorious, he sought and found an appropriateretaliation. In April, in the midst of the heated Uruguayan presidential cam-paign between the mildly anti-U.S. candidate, Luis Alberto Herrera, and theavowedly pro-U.S. candidate, Toms Berreta, Pern entered the fray. In whatcan only be construed as a crude attempt to manipulate the election, theArgentine 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 ofwheat originally destined for Europe were diverted to Uruguay instead, alongwith a promise of another seventeen thousand tons. When Berreta won,members of his administration publicly thanked the United States for itsassistance and vowed to hold the line against Argentine aggression. Even theState Departments most levelheaded commentators noted that this intrigue

represented a good reminder of the continued danger Pern represents forus.

. Messersmith to Flack, August , RG , Buenos Aires; Smith toBraden, September, RG,.; Orloski to secretary of state,December, RG,..

. Pern to Cesar Ameghino,Abril , AMREC, DP, Uruguay , Caja , Expedi-ente.

. Guillermo Spika Santilln, La Prensa in el Uruguay, Enero , AMREC, DP,Uruguay ,Caja , Expediente; Fernando Lopez-Alves, WhyNot Corporatism?Redemocra-

tizationandRegimeFormation in Uruguay, in LatinAmericainthes:WarandPostwarTransitions,ed. David Rock (Berkeley,),; Liborio Justo,Argentina y Brasil en la integracin continental[Argentina and Brazil in continental integration] (Buenos Aires,),.

. Braden to Acheson and Marshall,February, Harry S. Truman Papers, PresidentsSecretary Files (PSF), Foreign Affairs, Marshall File, Truman Library; Cabot to secretary of state,April, RG,.. See also Dawson to secretary of state, April, RG,.; and

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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, U.S.

policymakers had attributed the coup to Nazi Germany and Argentines, likePern, who they believed to be Nazi puppets. While there was little conclusiveevidence of cooperation between the Germans and either Pern or Villarroel,both South American leaders had embarked on nationalistic reforms and hadsuffered at the hands of the United States. As a result, U.S. diplomats comparedArgentinas blackmailing tactics toward Peru, Brazil, and Uruguay, especiallywhen it came to the shipping of wheat and meat, with the fact that amplemeat supplies continue to be received in Bolivia. Hector Adam, the U.S.ambassador in La Paz, concluded in Maythat Bolivia must have come to

terms which Argentina demanded before such concessions were made. Inother words, there can no longer be any doubt that Bolivia, either through fearof reprisals or genuine willingness, has now signed up in . . . a bloc withArgentina. Although Adam overstated his case badly, it was nonetheless clearthat Pern was utilizing wheat exports as both carrot and stick in his diplomacywith neighboring states.

Peronistasvehemently but fruitlessly denied that they were utilizing such aMachiavellian policy. The counselor of the Argentine embassy in Washingtonprotested that the Argentines were damned if [we] do, damned if [we] dont.

If genuine transportation difficulties slowed Argentine food shipments to thirdcountries, U.S. leaders did not hesitate to jump to the conclusion that we aretrying to starve them in order to impose our will. But if Pern did make hisdeliveries, then Argentina was accused of trying to form a southern bloc . . .directed against the U.S. Although there was some validity to this defense some U.S. commentators blamed stalled food shipments on local Argentineofficials who were acting without instructions from Buenos Aires difficultiesin transportation seemed to arise and disappear all too conveniently to beentirely coincidental.

Unfortunately for Pern, economic blackmail was an inherentlyflawedtactic that could never produce more than minor, temporary results. Forexample, 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

Office of the Undersecretary of Economic Affairs,Current Economic Developments( April),Truman Library.

. U.S. Department of State,Consultation among the American Republics Regarding the ArgentineSituation(Washington,),.

. Adam to secretary of state,The Bolivian Government Points to Close CollaborationwithPern,May, RG,..

. Oscar Ivanissevich to Bramulgia, Enero , AMREC,DP, Chile , Caja , Convenio,Legajo, Expediente.

. Messersmith to Braden,August, and Messersmith to Flack,August, RG,Buenos Aires.

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the United States in early. By and large, however, economic blackmailwas far too easily countered, as had been the case in Uruguay. Whenever Pernseemed to be applying pressure on a third nation, the State Department couldrespond 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 effect, Perns coercion gave theState Department an opportunity to intervene benevolently and cement theloyalty 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 thePeronists had learned from the Uruguayan experience that the holding up offoodstuffs did not pay. If Perns ultimate goal was, as many in the StateDepartment believed, to drivecountry after countrytopolitical subservience,

it was a strategy doomed to failure.

Recognizing this, Pern turned toward a more positive approach in Decem-ber the use of loans and credits to win friends throughout the hemisphere.Throughout the war, the Argentine government had sent great quantities ofwheat 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 asmuch an asset as some initially believed it to be, it nonetheless provided Pernwith a unique opportunity to increase through credits and subsidies thealreadyconsiderableeconomic dependence of neighboring states on Argentine

food and trade. Starting in December, Pern and Miranda negotiatedcomprehensive treaties with Chile and Bolivia (and attempted to do the samewith Paraguay, Peru, and Venezuela), calculated to tie these nations to Argen-tina and, in the words of Miranda, begin the Southern Cones emancipationfrom foreign tutelage. If Pern prudently denied that he was working toassemble a southern bloc, the far more candid Miranda did not. It ismy desire,he boldly asserted,toeconomically recreate theViceroyaltyof La Plata,Chilewould be brought infirst, then Bolivia, Peru, Uruguay and Paraguay.

. U.S. Department of State, Foreign Relation of the United States, (Washington, ), : .. Maleady to secretary of state, September, RG, Buenos Aires; Gilmore to Mann,

October, RG,... Messersmith to Flack,August, RG, Buenos Aires.. Gilmore to Mann,October, RG,... Memorandum for the secretary of state, January, Records of the Deputy Assistant

Secretaries of State for Inter-American Affairs,(RDAS), lotfileD, Policy-PositionPapers,, box, National Archives II. See also Jorge Fodor, Perns Policies for Agricul-tural Exports: Dogmatism or Commonsense?, and idem, Argentinas Nationalism: Myth

or Reality? inThe Political Economy of Argentina, ed. Torcuato Di Tella and Rudiger Dornbusch(Pittsburgh,),.. Created in by the Spanish crown, the Viceroyalty of La Plata was an colonial

administrative unit comprising most of the Southern Cone and governed by officials in BuenosAires. Miranda interview inZig-Zag,Enero, AMREC, DP, Chile, Caja, Convenio,Legajo, Expediente; Miranda interview inReview of the River Plate,January,.

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As thefirst step, Miranda opened negotiations with Chilean senator JaimeLarran that culminated in the Argentine-Chilean Trade Agreement onDe-cember. The treaty provided for bilateral barter between the two nationsand 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 thesetariffconcessions were not to be applied to third nations, neighboring statescould be exempted from this limitation, which left open the possibility thatPern could bring other states into the bloc. Miranda had overcome Chilestraditional mistrust of Argentina and induced Larran to sign the pact byoffering a developmental loan and credit package of over $million thebiggest in Latin American history, andfive times the total war and postwarfinancial aid which Chile . . . received from the United States. These creditswere 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 theAndescordillera, permanent links would be established between the comple-mentary economies of Argentina and Chile, and a history of rivalry andsuspicion would gradually dissipate.

Startled by the speed with which Pern had moved, journalists and StateDepartment officers likened the pact to the Nazianschlussand saw in it adramatic repudiation of both the United States and open commerce. To fulfillthe barter requirements of the treaty, the Chileans would be compelled to

exercise a much higher degree of centralized planning and control over privateenterprise, and Perns agents would be playing a central role in that planning.Still worse, the agreement provided for government-to-government loans andfor the export to Argentina of large quantities of Chilean copper, which Pernwould use to establish an Argentine copper processing industry.

This sort of statism alarmed the State Department. If Pern wanted tomodernize the Argentine cattle industry, or export processed linseed oil ratherthan linseed, U.S. policymakers would not complain, as these initiatives tookadvantage of Argentinas natural niche in the regionally specialized global

economic order. By initiating state-to-state loans and barter agreements and bysupporting the creation of heavy industries through trade restrictions andspecial 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,),.

. Leonor Machinandiarena de Devoto y Carlos Escud, Las relaciones argentino-chilenas,, y las ilusiones expansionistas del peronismo, [Argentine-Chilean relations,,

and the expansionist illusions of Peronism] in Argentina-Chile: Desarrollos paralelos[Argentina-Chile: Parallel developments],ed. Torcuato DiTella(Buenos Aires, ), ; Machandiaranade Devoto, La influencia del justicialismo en Chile, [The influence ofJusticialismoinChile,] (Tesis de Doctorado, Universidad de Buenos Aires,),.

. Simmons to secretary of state,December, RG,.; Gilmore to Braden andMann,December, RG,..

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path that economic nationalists had trod in the s. Although the StateDepartment was well aware that Argentine cooperation is something less thana prerequisite for a successful system of international commercial liberalism,the spread of Perns brand of economic nationalism could mean the break-

down of any efforts toward economic peace. By using economic integrationto forward his own statist experiment, and by trying to extend that experimentto 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 seemedwilling to bolt the Good Neighborhood and cast his lot with Pern. Indeed,Gonzlez Videlas program had already aroused considerable suspicion inWashington. Like Pern, he had committed himself to economic inde-

pendence, industrialization, and a populistic redistribution of wealth; butunlike Pern, he had forged an open alliance with the Communist party toaccomplish these goals. Not surprisingly, many in the State Department weredisturbed by the emerging entente between Gonzlez Videlas red-tingedgovernment and Pern. Radicals of the Left and Right seemed to be unitingbehind the common conviction that private enterprise capitalism was not aviable system for promoting economic growth in Latin America. If, as formerSecretary of State Cordell Hull had once noted, the political line-up followedthe 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 Peronisteconomic integration of the Southern Cone. Pern hoped to create some sortof southern union as a vehicle by which Argentina could opt out of the liberalcapitalist world economy and bring the rest of the Southern Cone with it. Wecannot talk of an important building up of commercial intercourse . . . on anexclusively private initiative basis,peronistaambassador Julio Lpez MuiztoldChileans, because the problems which wearefacingare of such magnitudethat they escape the scope of private solutions. For U.S. leaders, the Soviet

Unions reluctance to participate in their global economic program was aserious but predictable blow, as were Britains efforts to hold on to its Sterlingbloc. Perns southern bloc was clearly similar in certain respects, andPeronists awaited the inevitable counterattack from Washington, which, inthe words of one Argentine, does not want to lose its economic dominancehere.

. State Department memorandum, Argentinas Post-War Economic Policies, March

, RG,... Cordell Hull,The Memoirs of Cordell Hull(New York, ),:.. Bowers to secretary of state,April, RG,... Memorandum for Bramulgia and Miranda, Febrero , AMREC, DP, Chile, Caja

, Convenio, Legajo, Expediente. See also Miguel Angel Guezales to Carlos Mathus Hoyos,May, AMREC, DP, Chile, Caja, Expediente.

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That counterattack was soon forthcoming, though it would be more subtlethan the Argentines might have expected. Indeed, U.S. ambassador ClaudeBowers warned his superiors against any dramatic action that might arousenationalistic 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 thefight against the treaty. U.S. repre-sentatives should remain silent in publicandinstead givesotto voceadvice behindthe scenes to Chilean senators and to Gonzlez Videla. If the StateDepartmentworked openly to subvert the pact, Bowers argued, Pern could raise thefamiliar 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 butunobtrusively 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 demagogiccharge of Yankee pressure. The State Department therefore followed Bow-erss advice and was soon rewarded for its forebearance. Before the year hadended, Bowers was reporting that Gonzlez Videla was becoming apprehen-sive over our reaction, and the fact that we remain silent but clearly interestedis causing him some concern. Larran, who had not spoken to Bowers in eightyears, 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 effective.

Bowers did break that silence once, and in a decidedly threatening way.Secretary of State James Byrnes instructed him to approach the Chileangovernment and discuss informally with Gonzlez Videla two points thatwere troubling the Truman administration. First, the trade agreementbetween the United States and Chile supposedly provided reciprocal, uncon-ditional and unlimited most-favored-nation treatment. Byrnes was curious toknow how theChileans were going to reconcile this provision with the blatantly

discriminatory features of the Argentine-Chilean pact. Second, Bowers was toremind the Chileans that they hadlarge andspecial responsibilities toconform[to the] ITO Charter, as they had helped draft that document. Since the pactwith Argentina did not create a true customs union and was only theextension of discriminatory preferences under the mere guise of a customs

. Bowers toBraden, December , ClaudeBowers Manuscript Collection (Bowers MSSII), box, Lilly Library, University of Indiana, Bloomington.

. Bohan to Nicholas Bowen, February, Papers of Merwin Bohan, Correspondence

File, Argentina, box , Truman Library. See also, G. J. Dorn, Bruce Plan and Marshall Plan: TheUnited States Disguised Intervention against Peronism in Argentina, , InternationalHistory Review(June):.

. Bowers to Byrnes and Braden,December, RG,... Bowers to Braden,December, Bowers MSS II, box.. Bowers to Braden and Byrnes,January, RG,..

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union, Chiles position in the ITO would have to be reassessed. Bowers wasnot instructed to make threats, rattle sabres, or otherwise brandish a big stick,but merely to inform Gonzlez Videla of these apparent contradictions. Theimplications were clear, however. If Chile ratified the Argentine treaty, it ran

the risk of losing its advantages under the ITO charter and the U.S.-Chile tradeagreement of.

The response was almost immediate. Within a week of receiving Byrnessmessage, the Chileans summarily amended the treaty to meet U.S. specifica-tions. Larran announced in late Januarythat the Chilean chancellery hadacted to comply with the ITO charter but did not mention Bowerss commentsand went so far as to ask the State Department not to give [the] impressionthat [the] treaty was being modified 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 affair, Larran and Gonzlez Videla hadno desire to be painted as quislings to Yanquiimperialists.

Within months, Chilean opposition to the treaty did surface, as Bowers hadpredicted. Aside from the Communists, who viewed the pact favorably as astep toward the formation of an anti-imperialist bloc, and Gonzlez VidelasRadicals, who backed their leader, most other parties had serious reservationsabout a treaty that thrust their nation, as one magazine put it, into the jaws ofthe wolf. Still, the Liberal Party and elements of the Conservative Partyseemed willing to ratify the pact if Gonzlez Videla moderated his efforts to

unionize rural workers in Chile a very popular program among his Commu-nist supporters. The ensuing stalemate served the State Department well, andin late September Bowers informed his Britishcounterpart in Santiago thatI doubt that [Washington] will instruct us to protest unless prospects of thetreaty brighten considerably. Gonzlez Videla found himself in an untenableposition: torn between Perns overtures and the United States and, on thehomefront, between the demands of the Communist party and those of themore traditional Chilean political parties.

Although Gonzlez Videla wavered, events soon forced hishand. In Octoberhis erstwhile Communist backers, emboldened by a strong showing in off-yearlocal elections and weary of his vacillation, called a strike in the Chilean coalmines that threatened to paralyze the nation. In desperation, Gonzlez Videlaappealed to Truman for emergency coal shipments that would allow him to

. Byrnes to embassy Santiago,December, andJanuary, RG,... Bowers to secretary of state,January, RG,... El Siglo, Enero , ; Zig-Zag, Diciembre , . See also Luti to Bramulgia,

December , AMREC,DP, Chile ,Caja , Convenio, Legajo , Expediente ; Memorandum

for Miranda and Bramulgia, Febrero, AMREC, DP, Chile, Caja, Convenio, Legajo,Expediente; and memorandum for Valenti, Febrero , AMREC, DP, Chile , Caja ,Expediente.

. Bowers to Leche, October , Bowers MSS II, box . See also memorandum forBramulgia and Miranda, Febrero , AMREC, DP, Chile , Caja , Convenio, Legajo ,Expediente.

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crush the uprising in the mines. When Truman pledged U.S. support, GonzlezVidela expressed his deep appreciation and informed Bowers, almost withtears in his eyes, that he wanted towork in closest cooperationwith the UnitedStates. After breaking the strike, he swiftly eliminated the Communists from

his cabinet and enacted the Law for the Permanent Defense of Democracy,which effectively banned the Communist party. His lot cast decisively, he alsoentered negotiations that culminated in an Export-Import Bank loan and otherforms of financial assistance from the United States. At the same time, heabandoned hisflirtation with Pern and began looking for a way out of thetreaty with Argentina.

While Gonzlez Videla still saw some value in acquiring Argentine loansand tariffconcessions, the Conservative opposition became a blessing thatgave 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 UnitedStates] or the world bank by proceeding with the treaty when she would quitepossibly be left holding the bag. Miranda and Pern recognized the shiftimmediately. Although the Chilean economic situation remained desperate,Gonzlez Videla was doing nothing to press forward with the pact, which hehad originally advertised as Chiles salvation. On the contrary, he was nowworking with Conservatives and Liberals united in an anti-communist alli-ance, supporting North American interests and opposing good relations withArgentina. Gonzlez Videla, Peronists claimed, had renounced his reform

agenda in order to forge a reactionary alliance with the large landowners anddirectors of American businesses. This had been accompanied by a similarentente with the U.S. government, which had in the end succeeded in carryingthe government of Chile . . . down paths chosen by Washington.

With the prospects for ratification dimming, Pern tried to salvage the pactby accusing the State Department of intervening against him. In Mayheannounced in a speech before Congress that foreign interests had secretlyinterfered 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 wayunknown to us persuaded theArgentine government that theStateDepartment was instrumental in causing the non-affirmation of the Argentine

. Memorandum of conversation, Bowers and Gonzlez Videla,December, BowersMSS II, box.

. Baily,The United States and the Development of South America,; Brian Loveman,Chile:The Legacy of Hispanic Capitalism(New York,),; Francis Parkinson,Latin America, the ColdWar, and the World Powers,: A Study in Diplomatic History(Beverly Hills,),.

. Bowers to secretary of state, April, RG,.; Bowers to Armour and Daniels,

November, RG,... Varas and Pallas to Lopez Muiz, Septiembre , AMREC, DP, Chile , Caja ,

Expediente; Portela to Lopez Muiz,Marzo, AMREC, DP, Chile , Caja, Expedi-ente.

. Lpez Muiz to Anadn, Abril , AMREC, DP, Chile , Caja , Copias de lasnotas de la embajada argentina en Chile.

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trade agreement with Chile. Acting Secretary of State Robert Lovett told hisambassador to categorically deny any statements indicating that the U.S.government has exerted pressure to prevent ratification, but confidentiallyconceded that the State Department did object in informal discussion. The

State Departments goal had been to impede the treaty, but to do so by actingbehind 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 thetreaty was never ratified.

While peronistas initially may have considered Gonzlez Videla to be anatural ally, events in Mirandas second target, Bolivia, seemed to bode ill fordreams of a southern bloc. Perns ally, Lieutentant Colonel Villarroel, hadbeen toppled and executed in July, allowing the traditional oligarchy toreassert itself. The Peronists had no illusions with regard to the new regime,

recognizing that the United States will have great influence in the newgovernment. Still, Bolivia remained completely dependent on Argentine foodexports and therefore vulnerable to Argentine pressure. Argentine ambassadorMariano Buitrago Carillo believed that no one can replace us and urged hissuperiors to present the Bolivians with a comprehensive trade treaty as soon aspossible one that would allow Argentines to penetrate Bolivia economicallyand 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 infiltration of Yankee

imperialism which has to be combatted in South America.

Evidently sharing this belief, Miranda presented thenew Bolivian juntawitha pact that mirrored the Argentine-Chilean treaty in December , onlyweeks after making his first overture to Gonzlez Videla. Under its terms, tariffswould be lowered and loans offered to build rail lines and new mining facilities.The Argentines would receive quantities of Bolivian tin, lead, wolfram, coca,and other products through bilateral barter, while the Bolivians would beguaranteed food imports. For Pern, the real prize was the apparent willingnessof the Bolivians to permit Argentine exploitation of the iron deposits in the

region of Mutn. Argentines had long sought access to the gigantic quantitiesof ore in this region but had in the past been rebuffed by Brazilian leadersdetermined to prevent the emergence of an Argentine-Bolivian alliance.

. Bruce to secretary of state,April, RG,.; Lovett to embassy Buenos Aires,April , RG ,.. See also Lpez Muiz to Anadn,Mayo, AMREC, DP, Chile, Caja, Copias de las notas de la embajada argentina en Chile.

. James M. Malloy,Bolivia: The Uncompleted Revolution(Pittsburgh,),.. Movimiento Revolutionario de Bolivia,Julio, AMREC, DP, Bolivia, Caja,

Expediente, Anexo, Parte.

. Buitrago Carrillo, memorandum,Noviembre , AMREC, DP, Bolivia , Caja ,Expediente; Flack to secretary of state,December, RG,.. See also Rios Mrmola Bramulgia,Junio, AMREC, DP, Bolivia, Caja, Expediente.

. The Brazilians apparently also made a counterproposal to Bolivian president EnriqueHertzog, promising economic aid to prevent the ratification of the pact. Since the United Stateswas doing nothing substantial toward this end, Brazil might conceivably be considered as pulling

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Despite knowing that the treaty would antagonize both Brazil and theUnited States, Miranda pressed forward, confident that the rewards for Argen-tina could be substantial. There was no good reason why Bolivian iron, likeChilean copper, could not augment theperonistaindustrialization scheme. Just

as Pern envisioned an Argentine state operated copper industry based onimports from Chile, so too would Bolivian minerals fuel the development ofArgentine steel and tin mills. In the process, Bolivia would be drawn away fromthe United States and Brazil and into the Argentine orbit. Once again, Pernaimed to meld his own domestic industrialization program with the spread ofArgentine influence in the Southern Cone, to secure vital raw materials andmarkets in the region, and to undercut the position of the United States in theprocess.

Despite signing the treaty, the Bolivians apparently did not seriously enter-

tain the notion of aligning with Pern. More likely, new Bolivian presidentEnrique Hertzog was simply stalling the Argentines, perhaps hoping to exactsome concessions from the United States and secure his own rather precariousposition. Vctor Paz Estenssoro and other members of the defeated regime hadfled to Buenos Aires after Villarroels death, plotting their return to Bolivia. Inthe beginning, Paz Estenssoro reported, Pern had received the rebels withopen arms; but once negotiations with Hertzog seemed to be bearing fruit, itwas almost impossible for any of the MNR exiles to get in touch with anyimportant Argentine official. Although Peronists argued that Estenssoros

faction was the only one which could respond to our overtures for theformation of a bloc against the penetration of Yankee and Brazilian imperi-alisms allied against us, Perns dealings with Hertzog were promising enoughthathedidnotoffersignificantaidtotheexiles. Ontheotherhand,theHertzoggovernment barraged U.S. officials with stories detailing the real or imaginedperfidity of Pern and arch fiend Miranda. This duplicity is revealing.Hertzog continued his negotiations with Pern to dissuade the Argentine fromlending assistance to Paz Estenssoro and out of fear that an Argentine-Chileanalliance would isolate his nation but covered his bets by regularly denouncing

Pern to the United States.

our own chestnuts out of the fire. Dawson to Wells, Braden, and Briggs,March, RG,.; Flack to secretaryof state, March , RG, .. See also Rios Marmol a Bramulgia,Agosto, AMREC, DP, Bolivia, Caja, Expediente.

. Carles, Sobre infiltracin brasilea en Santa Cruz de la Sierra, Septiembre ,AMREC, DP, Bolivia , Caja, Expediente , Anexo; Mrmol to Bramulgia,Septiembre, AMREC, DP, Brasil, Caja, Expediente; Messersmith to secretary of state, March, NA, DS, RG,..

. Robert J. Alexander,The Bolivaran Presidents: Conversations and Correspondence with Presidentsof Bolivia, Peru, Ecuador, Columbia and Venezuela(London,),.

. Rios Marmol a Bramulgia,Agosto, AMREC, DP, Bolivia, Caja, Expediente.. Flack to secretary of state, June , RG,.; Espy to Hall, May, RG ,

.; Flack to secretary of state,March, RG,..

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Whereas Gonzlez Videla in Chile had seriously entertained Perns pro-posals, Hertzog, wedded completely to the old order, had no intention ofallowing the deal to be consummated. As it became clear that the Argentine-Chilean treaty was not going to be ratified, the Bolivians started to systemati-

cally water down their pact with Argentina. When it wasfinally ratified in,it was but a shadow of the original document, and almost meaningless.

Although Pern also accused the United States of suborning this pact, Lovettwas able to earnestly deny any intervention in this case. Despite Pernsaccusations, U.S. policymakers had not been forced to apply significant pres-sure, confident that the Bolivian elite would not wed itself to the volatilePeronist revolution. Gonzlez Videlasflirtation with Pern and the Commu-nists had been credible enough to win him concessions from Washington, butthe Bolivians were unable to elicit a similar response.

Although the State Department was able to safely stand on the sidelineswhile Argentina negotiated with Bolivia, Perns concurrent initiative towardPeru did not allow that luxury. Determined to reverse Perus gravitationtoward the United States, and perhaps emboldened by the results of theirpropaganda campaign, Pern and Miranda offered a third treaty in earlyto President Jos Luis Bustamante y Rivera, the embattled chief of a nationwracked by industrial strife, agricultural collapse, and economic chaos. EyeingPeruvian iron ore, coal, and oil, Miranda found Bustamante to be reluctant andin April drastically increased the price of Argentine wheat exports to Peru.

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 offered to Bolivia and Chile. U.S.ambassador Prentiss Cooper recommended that the State Department sendwheat and food oils to forestall any hard bargaining on the part of Argentina,but Assistant Secretary of State Dean Acheson reluctantly turned down theappeal.

Fearful that offering U.S. wheat at this late date would be interpreted as ablatant intervention and would be pretty difficult to justify, U.S. officials

eventually opted instead to arrange the sale of Canadian wheat to Peru. Theembassy presented a memorandum to the Peruvian Foreign Office stating itsintent to meet Perus food needs, confident that the informal approach woulddissuade the Peruvian Government from completing an arrangement with theArgentine Government. This confidence was not misplaced, as the Peruviansdecided to abandon the Argentine project once the Canadian wheat deal had

. Argentine embassy La Paz, confidential memorandum, Agosto , AMREC, DE,

Brasil-Bolivia, Legajo; Flack to secretary of state,March, RG,... Embajada Lima, Memoria anual,, AMREC, Peru, Caja, Expediente.. Cooper to secretary of state,March, RG,.; embassy Lima to secretary of

state,April, RG,... Cooper to secretary of state,March, RG,.. See also Acheson to embassy

Lima,March, RG,..

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materialized. Once again the State Department had utilized quiet persuasionto impede Argentine economic expansion and Perns efforts to forge ananti-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 LatinAmerican modernization was sophisticated, and the solution he presented wasbold and novel. Pern had proposed that public funds might replace privateforeign investment and that Latin Americans mightfinance their own industri-alization, independent of foreign tutelage, through regional integration. Itwas an analysis he would continue to press until his death, persisting in thebelief that the year would see South America either united or conquered.

Still, Pern himself must shoulder much of the blame for the failure of hisbold challenge, which was riddled with contradiction, to say the least. At the

same time he was trying to win over Gonzlez Videla, for example,peronistasin Santiago were apparently plotting with Chilean army officers attempting toseize power in that country. Similarly, he was providing a haven for Bolivianrevolutionaries and his propaganda in Peru was, at the very least, encouragingopposition to Bustamantes government dissent that Perns friend GeneralManuel Odra would exploit during hiscoup. Lending tacit support forrevolutionaries like Odra and Estenssoro, and utilizing economic blackmailagainst governments that he was wooing, did little to build Perns image as atrustworthy ally. By failing to either consistently support revolution or coop-

erate unconditionally with established governments such as Gonzlez Videlasor Bustamantes, both his revolutionary propaganda and his posture as SouthAmericas beneficient financier were weakened. Furthermore, while Pernpromised that his overtures would uplift the region as a whole, they were alltoo easily interpreted as a revival of old Argentine dreams to dominate theSouthern Cone, for clearly Argentina would profit most as the industrializedeconomic center of any southern bloc. Above all else he was an Argentine

. Martin to Tewksbury,March, RG,... Pern,Doctrina universal: continentalismo, ecologa, universalismo[Universal doctrine: Conti-

nentalism, ecology, universalism] (Buenos Aires,); Siracusa memorandum, January,RG,..

. Machinandiarena de Devoto, La influencia del justicialismo en Chile,.. Perns role in Odras 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 admiresand esteems. Bowers to secretary of state,January, Bowers MSS II, box; Oderigo to Paz,

Enero , AMREC, DP, Peru , Caja , Expediente ; Oderigo to Paz, Agosto ,AMREC, DP, Peru, Caja, Expediente. See also Bowers to secretary of state,December, RG,.; and embassy Lima to Paz, Septiembre, AMREC, DP, Peru, Caja, Expediente.

. Escud, Argentine TerritorialNationalism.Journal of LatinAmerican Studies (May ):.

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nationalist, and if exploiting his neighbors was the price he had to pay forArgentine greatness, few doubted that he would do so.

Certainly, U.S. leaders had no suchdoubts.They were convinced that Pernsprogram, if allowed to succeed, would subvert their own efforts to forge a more

open international economy based on convertible currencies and multilateraltrade. Nor was that the worst of it. With its emphasis on state-centereddevelopment, it challenged the U.S. faith in the power of private enterprise, justashisefforts to consolidate a southern bloc posed a real threat to U.S. leadershipin the region. U.S. officials had gotten used to a larger government role inmanaging their own modern economy, but Pern had pushed too far in thisdirection, andin so doing hadraised the prospect of replacingprivate enterprisewith an economic totalitarianism. Similarly, U.S. leaders were in favor ofregional economic integration and were pushing toward this goal in Western

Europe. But they did not want integration to result in an autarchic economicbloc of the sort Pern apparently envisioned. Not only would Perns successexclude or limit U.S. influence, it would lead to the sort of statism and controlsthat Americans associated with depression and war. For these reasons, theyopposed Pern on almost every front, through acting so far as possible in asubtle fashion that would not offend Latin American nationalists. And in theend these efforts combined with Argentine blunders to guarantee U.S. success.

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perón’s gambit

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