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The basic fact in Argentine economy is that Argentina is normally the greatest surplus-food producer and exporter in the world. Animal and agricultural products make up 93% of her total exports, and exports represent about half the value of her total national production. Argentina supplies three-fourths of the world's trade in beef and veal; she grows two-thirds of the world's linseed; she is the world's largest exporter of corn, its second-largest exporter of wheat, wool, lamb and mutton. Blockade and counter-blockade have played havoc with this trade, for the No. 2 fact in Argentine economy is that 70% of Argentina's foreign trade is normally conducted with Europe. In the first quarter of 1941 her foreign trade was off 48% from last year.
In this extremity the U.S. has lent Argentina $50,000,000 to support the peso, has made $60,000,000 available in Export-Import Bank credits for industrialization. These loans have done nothing to solve the fundamental problem, which is simply this: Where is Argentina to sell most of her surplus food? Britain cannot take it. The U.S. will not take it. Germany says she will.
Though the U.S. takes 25% of Argentina's linseed export, which ranks far above chilled and frozen beef, beef has become the sourest note of the economic disharmony between Argentina and the U.S. The reasons are psychological as well as economic. Argentines bitterly resent the fact that their beef is barred from the U.S. for so-called sanitary reasons (hoof-&-mouth disease, which the Argentines deny their cattle have). They resent the fact that in 1935 Secretary of State Cordell Hull signed a convention which would have admitted some meat into the U.S., but the Senate has never ratified it. From the Argentine point of view, Argentina's export troubles are not hers alone, but also a U.S. problem. If the U.S. wants Argentina on the U.S. side against Germany, the U.S. must provide an export market. The alternative is doing business with a victorious Germany, and that does not yet present many terrors to Argentines.
The Caudillos. For reasons psychological and political, Argentina has always been, and still is, reluctant to join any front, to surrender even to the smallest degree control of her destiny to others. The most powerful and ambitious country in all South America, Argentina nevertheless feels herself frustrated. The causes date back to the "Period of Anarchy" just following independence, when the vast southeastern regions of the continent were ruled by provincial caudillos (leaders) and Buenos Aires was trying to establish authority over the provinces. By the time the great caudillo, Juan Manuel de Rosas, had succeeded in unifying a part of the country, three States had broken away from it: Uruguay, Paraguay, Bolivia. Although Argentina has long since rejected any idea of recovering these countries, she considers herself leader of the entire region which once formed the United Provinces of the Rio de la Plata.