Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 1963 A Comparison: United States Economic Relations With Argentina and Brazil,1947-1960. Louis J. Rodriguez Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_disstheses Recommended Citation Rodriguez, Louis J., "A Comparison: United States Economic Relations With Argentina and Brazil,1947-1960." (1963). LSU Historical Dissertations and Theses. 854. https://digitalcommons.lsu.edu/gradschool_disstheses/854 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected]. This dissertation has been 64—157 microfilmed exactly as received RODRIGUEZ, Louis J., 1933- A COMPARISON: UNITED STATES ECONOMIC RELATIONS WITH ARGENTINA AND BRAZIL, 1947-1960. Louisiana State University, Ph.D, 1963 Economics, general University Microfilms, Inc., Ann Arbor, Michigan A COMPARISON: UNITED STATES ECONOMIC RELATIONS WITH ARGENTINA AND BRAZIL, 1947-1960 A Dissertation Submitted to the Graduate Faculty of the Louisiana State University and Agricultural and Mechanical College in partial fulfillment of the requirements for the degree of Doctor of Philosophy in The Department of Economics by Louis J. Rodriguez B.A., Rutgers University, 1955 M.A., Louisiana State University, 1957 Juns, 1963 ACKNOWLEDGMENT The writer wishes to thank Dr. L. M. Schur, the Chairman of this Dissertation Committee, for his interest, vital suggestions and cooperation; Dr. P. F. Boyer, Dr. R. A. Flamang, Dr. S. W. Preston and Dr. W. D. Ross, members of the Dissertation Committee, for their cooperation and suggestions; Dr. E. N. Baklankoff for his initial assistance with this dissertation; and his wife for her encouragement in the face of personal adversity. il TABLE OP CONTENTS CHAPTER PACE INTRODUCTION .... ....................................... 1 Objectives, Scope and Method..... ........................ 3 Plan of Organization ..................................... 4 I. RESOURCES AND ECONOMIC EVOLUTION OP ARGENTINA AND BRAZIL TO 1947 .................................. 7 Argentina ........................................ 8 Resources ...................................... 8 G o v e r n m e n t ...................................... 12 Economic Development ............................. 17 Foreign Investments ........................... 25 International Trade ........................... 30 Argentine-United States Economic Relations . 36 B r a z i l ............................................... 41 R e s o u r c e s ................................... 41 G o v e r n m e n t ......................................... 4-5 Economic Development .................... 48 International Trade ........................... 56 Porelgn Investments ........................... 62 Brazilian-United States Relations ............ 65 Argentina and Brazil Compared .................... 70 iii iv CHAPTER PAGE II. UNITED STATES TRADE WITH ARGENTINA AND BRAZIL, 1947-1960 .............................. 80 United States Trade with Argentina and Brazil by Major Groups .............................. 81 Argentina ............................ 81 B r a z i l ....................................... 83 Argentina and Brazil Compared .............. 89 Analysis of Trade by Subgroups .............. 91 A r g e n t i n a ..................................... 92 B r a z i l ....................................... 94 Factors Influencing Trade ..................... 97 Argentina and Brazil Compared ................ 101 An Analysis of Chief Exports to the United States ................................ 109 Specific Commodities ....................... 109 United States Import Policy ........ 112 Promotion of Exports ....................... 114 Comparison of Argentina and Brazil ......... 119 III. UNITED STATES PRIVATE DIRECT INVESTMENT IN ARGENTINA AND B R A Z I L ......................... 124 Economic Aspects of Investments .............. 124 A r g e n t i n a ....................................... 128 Government Regulations ..................... 128 T a x a t i o n ..................................... 132 I n f l a t i o n ..................................... 139 V CHAPTER PAGE Magnitude and Impact of United States Investments .................................. 136 B r a z i l ........................................... 140 Government Regulations ....................... 140 T a x a t i o n ...................................... 143 I n f l a t i o n ...................................... 144 Other Investment Factors .................... 146 Magnitude and Impact of United States Investments .................................. 148 Comparison of Argentina and Brazil ........... 131 IV. ARGENTINE AND BRAZILIAN BALANCE OF PAYMENTS PROBLEMS ................................ 159 Measurement of Surpluses and Deficits ......... 160 A r g e n t i n a ......................................... 163 Exchange Controls ............................. 163 The Postwar Crisis, 1946-1949 ................ 169 Stagnation and the Balance of Payments, 1950-1960 .................................... 176 Role of the United States .................... 185 B r a z i l ........................................... 186 Exchange Controls ............................. 186 Brazil's Bal&noe of Payments ................ 191 E x p o r t s ......................................... 193 I m p o r t s ......................................... 201 Balance of Payments Prospects .............. 204 vi CHAPTER PAGE The Role of the United States ................ 210 Argentina and Brazil Compared .................. 210 V. UNITED STATES ECONOMIC POLICY TOWARD ARGENTINA AND B R A Z I L ............................ 215 United States Economic Assistance .............. 215 Export-Import B a n k ............................ 215 Other United States Public Agencies ......... 218 Loans by International Agencies .............. 220 Argentine Policy ................................ 222 Brazilian Policy ................................ 228 Comparison and Evaluation of United States Economic Policy Toward Argentina and Brazil . 236 VI. SUMMARY AND CONCLUSIONS .............................. 245 R e s o u r c e s ......................................... 245 Balance of Payments ......................... 249 Economic and Political factors ................ 252 United States Policy Change ..................... 255 United States Economic Policy Toward Brazil . 257 Stages of Economic Development ................ 258 Foreign Capital ................................... 260 I n f l a t i o n ......................................... 262 Program for United States Economic Assistance . 266 SELECTED BIBLIOGRAPHY ................................... 271 APPENDIX ................................................ 292 VITA ..................................................... 324 LIST OP TABLES TABLE PAGE I. Mining Production in Argentina, 1951-1959 . 11 II. Value of Argentina's Agricultural Production 1925-29 and 1945-48 Averages ................ 21 III. Cotton Textile Consumption in Argentina, 19 30-1945 ....................................... 23 IV. Argentina's Cement Production and Consumption, 1930-1949 ....................................... 25 V. Argentina's Exports, Imports, Terms of Trade and Capacity to Import, 1925 to 1948 .... 32 VI. Argentina's Imports Per Capita for Selected Periods, 1925 to 1948 ......................... 33 VII. Argentine Trade with Great Britain and the United States, 1935 to 1 9 4 1 .................. 40 VIII. Growth of Manufacturing in Brazil, 1889-1920 . 53 IX. Brazilian Agricultural and Industrial Production, 1920-1947 ......................... 54 X. Average Yearly Growth in GrosB National Product, 1920-1947 ....................................... 55 XI. Brazil's Quantity of Exports, Terms of Trade and Capacity to Import, 1925-1949 ............ 58 XII. Value of Eight Export Commodities, in Per Cent of Total Exports, Brazil (1821-1945) .... 60 vii viii TABLE PAGE XIII. Make-Up of Brazilian Imports, Per Cent of Value, 1905 and 1945 .................... 62 XIV. United States Investments in Brazil, 1929-1945 ........................... 64 XV. Percentage of Brazilian Trade with Selected Countries, 1913-1945 68 XVI. United States Agricultural Products Exported Under Government Aid Programs, 1956-57 . 99 % XVII. United States Share of World Exports and Production of Selected Agricultural Products in Annual Averages, 1934-35 and 1955-57 ................................. 100 XVIII. Changes in Cotton and Wheat Imports of Four Western European nations, First Six Months of 1956 and 1957 .................... 101 XIX. United States Coffee Imports from Brazil, 1957-1958, and Expected Imports for 1965 and 1970 ............................... 108 XX. United States Imports of Cocoa Beans, 1957-1958, and Expected Imports from Brazil in 1965 fluid 1970 .................... 110 XXI. United States Imports of Iron Ore, 1957-1958, and Expected Imports from Brazil in 1965 and 1970 Ill XXII. Impact of Taxes in Argentina .................. 135 ix TABLE PAGE XXIII. Impact of Taxes in Brazil .................... 144 XXIV. Argentina's Share of Export Market for Selected Agricultural Commodities in Selected Years ............................. 173 XXV. Main World Producers of Cocoa,