will be used or new equipment. Such estimates, together with the assumptions on which they are based, are set forth in detail in the appendix; they may be summarzied as follows:

Total estimated requirements for new and used equipment to be employed it new development and replacement in the first 10 years after the war are shown for each of the other American republics in table 1. The basic data for this table are given in the appendix.

TABLE 1.-Total estimated requirements of the other American republics for equipment for new plant capacity and replacement, by countries, in the first 10 years after the war

In any program of economic development covering the first 10 years after the war, it appears likely that the total quantity of equipment required from the United States will increase progressively because of the time needed to develop essential plans, because the United States will be better able to supply equip ment after the period of reconversion, and because the other American republics will be able to absorb increased quantities of equipment with the establishment and expansion of basic industries. The demand for used equipment, however, will probably decline as the program advances. This is chiefly because large stocks of used equipment will be available in the first few years after the war, whereas new equipment will not be obtainable in large quantities, or at least in quantities sufficient to meet the demands for both domestic consumption and export. The backlog of demand for replacement equipment will probably be liquidated in the first 4 years after the war. Of the $1,620,000,000 in used equipment which the other American republics may absorb in the first 10 years after the war, it is estimated that 1,200,000,000 will be purchased in the first 4

years (see appendix, tables 3 and 6). It is not anticipated, however, that all of this demand can be met from Government stocks, inasmuch as such stocks will not contain all of the various types of machinery and equipment which the other American republics will require. It has been estimated, therefore, that 60 percent of the requirements of the other American republics for used equipment may be met from Government stocks. If this estimate is correct, it may be assumed that purchases by the other American republics of surplus stocks of used materials held by agencies of the United States Government will be valued at $720,000,000 in the first 4 years after the war. These purchases might occur in the following order:

The types of equipment which the other American republics are likely to require will range from complete hospital trains to simple hand tools, such as shovels, axes, and machetes. They would include bulldozers, tractors, and trucks for road building; landing boats and barges for river transportation and ocean-going vessels; cranes and other port equipment, locomotives and care for railways; planes and equipment for airports; refrigeration units for the preservation of foodstuffs, including meats and fish; electrical equipment of all kinds; mobile medical units; mobile repair units; mobile power units; and machine tools, lathes, and saws. The general types of equipment with specific examples are shown below; the list, however, is intended to be illustrative rather than complete.

In the estimates which follow of the new and used equipment likely to be required by each country, the 10 major classifications shown above have been used. In each case they include the types of equipment indicated in this list.

Estimates of the value of the various types of equipment, used and new, which the other American republics may require from the United States for new development and replacement in the first 10 years after the war, are given in table 2. A similar tabulation for each country appears in the country sections.

TABLE 2.-Estimated total value of used and new machinery and equipment required from the United States in the other American republics, by types, in the first 10-year post-war period1

1 Includes estimates for both the development of new plant capacity and the replacement of depreciated and obsolete equipment.

Channels of distribution.

For all types of equipment of which there will be large stocks after the war, arrangements should doubtless be made for distribution through private channels. Private enterprise should distribute articles in large supply because:

(1) Business organizations have the necessary experience and facilities to handle most efficiently a task of such magnitude.

(2) Distribution through commercial channels would enable United States firms quickly to reestablish their position in the Latin-American markets, an achievement which would prove profitable to the United States economy in both the short and long run; and

(3) The Government neither wishes to engage extensively in trade nor is it equipped to do so.

Products which might well be distributed through ordinary commercial agencies would include trucks, road-building and construction equipment and supplies, lathes, machine tools, electric equipment and supplies, cranes, railway and dock equipment, refrigeration units, and consumer goods of all kinds. In making such sales, however, the United States Government may find it both necessary and expedient to exercise control over the quality of the articles distributed and the prices at which they are sold. Such precautions would appear desirable as a protection to Latin-American purchasers and as a method of encouraging future sales of new products. Uniess handled with care and equity, the sale of used equipment abroad could seriously impair the reputation of the United States, its citizens, and its products.

For some types of equipment the United States Government may be forced to act as the distributing agent. Because of special circumstances, private firms may be neither able nor willing to dispose of certain products; in other instances it may be impolitic to have them do so. A few illustrations are given below:

(1) There are no established distribution channels for such highly specialized equipment as hospital trains, mobile medical units, landing boats, barges, and steamships.

(2) Some articles might be so few in number as to make their distribution unprofitable to private enterprise unless prices were raised to uneconomic levels. (3) Should the government of one of the other American republics wish to purchase equipment on its own account, it may prefer to deal directly with the United States Government, particularly when long-term credits are involved. (4) The sale of munitions should obviously be controlled by the Government. Methods of financing.

The method of financing the sale and export of used equipment from Government stocks will be dependent in part upon the terms extended by the United States Government to the domestic purchaser and distributor and in part upon

the character and financial standing of the United States distributor and the foreign purchaser. Should generous credit terms be extended by the Government to United States distributors, it would then be possible for them to extend favorable terms to foreign purchasers. If the distributing firm should be one of the large United States corporations, such as General Motors, it is unlikely that financial assistance would be required; but if it were required, it could be secured through the corporation's banking connections. Moreover, a number of the large firms in the other American republics have accumulated substantial dollar bal-ances and will not find it necessary to seek special credit arrangements.

Credit assistance, however, will be required for many of the transactions covering the export of used equipment. If the credit is to be extended by commercial banks, they may desire to obtain at least a partial discount or guarantee from such an institution as the Export-Import Bank. Moreover, United States exporters, if they are unable to obtain adequate credit terms from commereial banks, will seek to obtain the necessary assistance directly from the Export-Import Bank. The bank will, of course, be asked to finance whatever distribution of equipment is handled directly by the Government.

Because of the interest in industrial and other economic developments in the other American republics and elsewhere, it appears certain that the United States will be a large exporter of capital goods (both used and new equipment) in the post-war period. For many of these exports, credits will be required. Inasmuch as this development in trade, if soundly conceived, will be profitable to the United States and will be necessary to maintain a high level of industrial activity and employment, adequate credit facilities should be provided. It would seem advisable, therefore, to consider the possibility of increasing substantially the capitalization of the Export-Import Bank.

Basic data.

ARGENTINA

Argentina, second largest country of Latin America, contains about 1,079,900 square miles, mostly lowlands. Leading manufactures include food, beverage, tobacco, textile, cement, paper, electrical equipment, tire, automobile assembly, glass, pharmaceutical, and fabricated iron and steel products. Agriculture is the major export industry. Principal export crops are wheat, corn, and flaxseed; alfalfa, cotton, sugarcane, and potatoes are grown chiefly for domestic consumption. Many cattle, sheep, goats, and hogs are raised; the country is the world's largest exporter of meat. Mineral production, except for petroleum, lead, and zine, is unimportant; coal and iron-ore deposits are limited and of low quality; and few hydroelectric sites are located near large centers of population or industry.

Of the population of 13,906,694 in 1943, 97 percent (a larger proportion than in any other Latin-American country) are estimated to be of European descent. Spanish is the official language, and about 85 percent of the persons more than 18 years of age are believed to be literate. Foreign trade generally is larger than that of any other country in Latin America; exports ordinarily exceed imports. The national income for 1943 was estimated to be 2.5 billion dollars.

Argentina's pre-war fleet of steamers and motorships stood first in number and third in tonnage (313,000 in 1939) in Latin America. It also has the best railway system; there were 28,773 miles of line in 1941. Of the 30,186 miles of highways in 1942, 37 percent were improved. Vehicle registrations at the end of 1943 included 217,200 passenger cars, of which 75 percent were in service; 72,250 trucks, with 83 percent operating; and 10.500 busses, with 67 percent in operation. Air-line service in that year was provided by 4 international and 3 local companies; the local services operated 17 multiengine aircraft over 4,551 route miles of airways with 19 airports of class III or larger and 45 of class II or smaller.

Government expenditures in 1942 exceeded revenues by 23 percent. The country's external debt was 1,300,000,000 pesos (about $325,000,000) and the internal debt 6,969,000,000 pesos ($1,742,000,000). British investments, more than onehalf in railways, total about £384,000,000 ($1,536,000,000), and United States investments $570,000,000. All but about 25 percent of Export-Import Bank loans totaling $370,000 had been repaid by March 31, 1944. Gold and foreign-exchange holdings totaled $1,088,000,000 at the close of 1943; a complex system of exchange control is maintained.

Manufacturing, in which Argentina leads all Latin-American countries, recently has expanded more rapidly than agriculture and now exceeds the latter in total value of products. From 1935 to 1941 the number of manufacturing establish

ments increased by 45 percent to 58,000, the number of employees by 60 percent to 862,000, and the gross value of production by 80 percent to 6.3 billion pesos. Except for some elements of heavy industry, Argentine industrialization has been more completely developed than in any other Latin-American country.

Instrumentalities for development.

An industrial credit bank with a capital of $50,000,000 has been established in Argentina to extend long-term credit facilities to industrialists; the fund may participate in such financing up to 30 percent of the initial requirement of capital. In April 1944 an industrial loan bank reportedly also was established, capitalized at about $12,500,000.

Program for economic development.

The centers of activity for the planning of Argentina's post-war trade have been the Central Bank of the Argentine Republic, and the Corporacion para la Promocion del Intercambio established in 1940 and now attempting the rationalization of imports and domestic industry. Representatives of more than 200 leading industries and commercial enterprises also established a Permanent Congress of Studies of Post-War Problems on April 16, 1943.

It has been estimated that the possible development of new plant facilities in Argentina will require machinery and equipment from the United States valued at $417,000,000, and that the replacement of depreciated and obsolete equipment will likely require an additional $228,000,000. A segregation of these two categories into used and new equipment is shown below:

The total estimated value of equipment likely to be required from the United States is shown by types in the following table:

Argentina: Estimated value of equipment and material from the United States in the first 10-year post-war period

Mining is the most important industry in Bolivia and the one on which its foreign trade largely depends. Tin is by far the leading mineral, but Bolivia also produces silver, copper, gold, tungsten, bismuth, lead, antimony, zinc, and petroleum. In the period 1938-41 minerals constituted more than 90 percent of the total Bolivian exports, with tin alone accounting for about 70 percent. Agriculture has not been well developed, although ample potentialities exist. The land is tilled with primitive tools and productivity is extremely low. Agricul tural commodities are raised chiefly for the domestic market, and Bolivia is a net ilmporter of food products.