by Gerard Colby
He could not shake off his worries about Cárdenas’s crisis with Washington. Should Mexico’s relations with the United States deteriorate, SIL’s future would be in doubt. He wrote the Mexican president on July 25 of his concern that the agrarian reform was adversely affecting large American holdings. Cárdenas replied patiently that the Mexican government would pay indemnities but only “as the economic condition of the country will permit.” It was not possible “to delay the giving of land to the villages, nor to wait until the necessary funds for an immediate indemnization are in hand.”22 The one bright point for Cam was Cárdenas’s belief that Cam’s trips to Washington and New York were “very important.”
Cam took the hint. In September he read that Secretary of State Hull was demanding that Cárdenas repay an old $10 million debt. This was at the very time that Mexico was suffering from a severe depression and the collapse of the purchasing power of its peso, caused in no small measure by Hull’s cessation of silver purchases. Cam fired off an indignant wire to Hull, followed by a four-page, single-spaced letter containing the kind of strategic wisdom for American corporations that someone like Nelson Rockefeller would have appreciated. “They [the oil companies] had better decide right now to give the Nationals of all Latin America a share in the industry,” he warned, “or they will be kicked out bag and baggage sooner or later.”23 A year and a half later, in January 1940, Roosevelt himself would echo these sentiments, proposing “a new approach … to these South American things. Give them a share.”24
Ambassador Daniels did his best to enhance Townsend’s prestige with the State Department. He sent a glowing report on “Plans of the Townsend Group for Educational Work among the Primitive Tribes in Mexico” that was read at the Bureau of Indian Affairs. He also arranged a commendatory review of SIL in the American Foreign Service Journal. Undaunted by the State Department’s hostility toward Cárdenas, Cam recruited seven youngsters to an Inter-American Service Brigade and repeatedly pushed the brigade concept during the next two years.
The idea would languish in Washington’s limbo for two decades, until its spirit was resurrected in the Peace Corps.
ROOSEVELT MOVES TOWARD FORTRESS INTER–AMERICA—AND ROCKEFELLER
If Cameron Townsend’s political creativity was frustrated by the Roosevelt administration during these prewar years, he was not alone. Samuel Inman of the Committee on Cooperation in Latin America also had failed to get Roosevelt’s ear for his idea of a division in the State Department devoted exclusively to improving U.S. cultural relations with Latin America.
This emphasis on the cultural over the commercial was no new goal of Inman’s committee. As early as 1929 the committee’s annual report had expressed dismay that “the sad part about the foreign missionary enterprise is that too often not the spiritual forces but the driving economic agent is the best known of American representatives abroad.”25 Originally, the committee had hoped to take advantage of American corporate expansion into Latin America. Only the previous year, the committee had noted the “opportunity” presented to American missionaries to stimulate interest in “our southern neighbor”* by a Commerce Department report. “Citizens of the United States,” the committee noted from the report, “now own a considerable proportion of the wealth and receive a proportionally large part of the income of most Latin American countries.”26
But by 1934, the blush was off the corporate rose. The revelations of Senate munitions hearings in 1934 had deeply shaken the missionaries. Not only had such a respectable company as Du Pont profited $250 million off the world war—overcharging the U.S. government to the point that Secretary of War Newton Baker called the family a “species of outlaws”—but Du Pont had become deeply involved in the postwar international munitions traffic and spread the arms bazaar to Latin America, setting up explosives plants in Chile and Mexico.27 The Committee on Cooperation asked missionaries like Townsend to consider the grave implications. “What are the legitimate hopes that missionaries in Paraguay and Bolivia may advance the Kingdom of God in those lands, while their fellow North Americans as munitions salesmen are providing the means for wholesale slaughter?”28
In an age that seemed to be rolling uncontrollably toward the unbelievable—another world war—the Committee on Cooperation in Latin America turned desperately to cultural exchanges as a major means of promoting public support for peace treaties. Yet it was in the commercial realm that men in Washington were most interested. Roosevelt handed the job of engaging in commercial warfare in Latin America to the new assistant secretary of state for Latin American affairs: Adolf Berle.
Roosevelt had been pushed to this point by domestic as well as foreign considerations. In 1937, accepting Treasury Secretary Morgenthau’s prognosis that the United States was moving out of the depression and that mounting inflation had to be reined in, Roosevelt had returned to fiscal conservatism. He slashed federal spending, cutting the budget of Harry Hopkins’s Works Progress Administration and almost ending Harold Ickes’s Public Works Administration. But he moved too late as far as corporate leaders were concerned, and they were still unsatisfied with Roosevelt’s progressive tax reforms. With the Federal Reserve tightening the money supply and consumer spending slowing again, the “strike of capital” continued, drying up investments. In July 1937, Japan invaded China. The following month, nervous American investors began unloading stocks to grab whatever profits they could.
The result was the most brutal drop in industrial stocks in the nation’s history. By December the crash had wiped out all the gains the stock market had made since 1935, and 2 million people had lost their jobs. As the crisis became publicly known as “Roosevelt’s Depression,” the President decided that his predecessor’s emphasis on foreign markets might have been right all along.
In any case, he saw there was no alternative. Everything in his cultural training, from his Calvinist Reformed Dutch religion to his education in the most aristocratic U.S. schools, made it impossible for Roosevelt to step any further in the socialistic direction of some of his advisers. Nor could the American economy return to a nineteenth-century republic of competing small producers. Domestic policy alone would not suffice. Foreign markets had to be expanded, and the aggressive behavior of the Axis powers no doubt gave urgency to Roosevelt’s increased concern with defending corporate America’s economic frontiers.
Standard Oil’s operations in China brought this point dramatically home on December 12. Japanese warplanes bombed and sank the U.S.S. Panay while it was escorting Standard Oil tankers up the Yangtze River. Standard’s tankers, the real targets, were also attacked. Hull demanded, and got, an immediate Japanese apology and complete repayment of the losses. But from then on Roosevelt was oriented increasingly toward the strategy of a Fortress America, which soon became a Fortress Inter-America. For help, he turned to Adolf Berle. Berle’s arrival at the helm of Latin American affairs symbolized this move, as well as the return to business-government “cooperation” that had marked the first phase of the New Deal that Berle had helped usher in as a member of the original Brain Trust.
The son of a minister and a lay missionary to the Sioux Indians, Berle could never shake the hope that the regeneration of the businessman would bring about the reforms the United States needed. He had been a member of Thomas Debevoise’s law firm; it was he who had steered John Collier in 1924 to Ray Fosdick for a Rockefeller grant. Berle and Fosdick had both served in the U.S. delegation to the Versailles Peace Conference and shared a disgust for the uncompromising and avaricious terms imposed by the Allied victors and their betrayals of wartime promises of self-determination for colonies like Vietnam and India that had fought for the Allies. Modern corporate society could afford to be more generous, they believed; otherwise, not only renewed war, but revolutions, such as those that erupted in Russia, China, and Mexico, could spread.
Berle at first took a conservative stance toward Cárdenas’s nationalization of American-owned sugar plantations. But he ascended to the higher wis
dom of accommodation in the face of the rising menace in Europe. If the fleets and merchant marines were to move about the ports of Latin America unharassed to support the fighting in the North Atlantic and the South Pacific, the cooperation of Latin America was essential. Making Fortress Inter-America a reality required the strengthening of the goodwill brought about by the Good Neighbor Policy.
For this delicate task of public relations, Berle was unsuited: He simply brought too much baggage with him from the business community and his participation in the U.S. financial pressure and the gunboat diplomacy that replaced the civilian government of Ramón Grau San Martín with the military dictatorship of Fulgencio Batista. A new face was needed, and one that belonged to a mind that appreciated Latin American culture, nationalist sensitivities, and the importance of American business in tying the knot between development south of the Rio Grande and restored prosperity north of it.
*The field surveyor for the committee’s Commission for Indian Work in Latin America, Rev. L. L. Legters, had taken this vision to William Cameron Townsend in 1929 and focused it on the Amazon. Legters, in fact, had been visiting Townsend when Legters’s colleague in the commission’s survey of Indian tribes in the Brazilian Amazon had been killed by Nambikuára Indians. From that tragedy, Townsend’s own vision widened to airplanes. Cam was convinced that bush airplanes, like the U.S. military planes he saw passing over Central America, somehow could have made a difference in the missionary’s fate.
7
THE MEXICAN TIGHTROPE
THE VENEZUELAN CONNECTION
Nelson realized by 1939 that time was running out in Venezuela. Here he was, arguing with communist labor organizers right in Creole’s own oil fields, and still he couldn’t get Standard Oil’s hierarchy in New York to listen. If reforms were not initiated, and soon, the very thing these communists were pressing for—elimination of Yankee ownership over oil, just as Cárdenas had done in Mexico—would happen in Venezuela.
For weeks, Nelson had walked around with a copy of Marx’s Capital under his arm. He was so disturbed by the book’s analysis of capitalism that he insisted that his chief associates read it. He realized, however, that what would have the greatest influence on the restless oil workers’ minds was not ideology or analysis but improving the actual conditions of their lives. He toured Creole’s operations, warning the American managers behind their barbed-wire compounds about the lessons of Mexico. He had been greatly impressed by a book exposing Standard’s abuses in that country. He made his people read that, too.
Labor unrest, not Axis espionage, was Nelson’s biggest concern in Venezuela. As in Mexico, oil workers were experimenting with an explosive blend of nationalism and communism. Nationalism had even spread to the military and was now threatening to be not only anti-Yankee, as in Bolivia, but anticapitalist as well.
Nelson’s presence was not yet appreciated by either local Creole managers or anticommunist nationalists like Rómulo Betancourt, editor of Ahora and leader of the left-of-center opposition party, Acción Democrática. But it could not be ignored. “After looking over his vast oil properties,” Betancourt wrote of Rockefeller, “… he will return to his office atop Rockefeller Center, to the warm shelter of his home, to resume his responsibilities as a philanthropist and Art Maecenas. Behind him will remain Venezuela producing 180 million barrels of oil for the Rockefellers.… Behind him will remain Venezuela with its half million children without schools, the workers without adequate diets …, its 20,000 oil workers mostly living in houses … better called ‘over-grown match-boxes.’”1
Nelson’s Creole also left behind a thick sludge of oil over the surface of Lake Maracaibo. In December, for the second time that decade, the oil scum caught on fire; the shacks that oil workers had built on stilts over the lake exploded in flames, roasting hundreds of families alive.
Townsend, then in Mexico, was appalled. “The thing was outrageous enough in itself, but since it happened to be the second occurrence of the awful catastrophe within a decade it was nothing short of criminal. If the men, women, and children who were burned to death had been English, Dutch or American, a furor of protest would have been raised against the carelessness of the companies, but they were ‘just Venezuelans,’” he wrote.2
A furor did break out over Venezuela, however. Whatever resistance to Nelson’s reforms remained among Creole’s managers collapsed after the fire. Down came the barbed wire. Up went public health clinics modeled after the Rockefeller Sanitary Commission. A dozen Berlitz teachers arrived from New York to begin teaching Spanish, which was now mandatory, to Creole executives. Job discrimination against Venezuelans in heavy drilling operations was phased out. To answer criticisms that Venezuela had become a monoindustrial society dominated by oil, Creole brought down an engineering firm to survey the economy and recommend developments for agriculture and the diversification of industry.
To fill the financial vacuum in that area, Nelson stepped in with his own firm, the Compañia de Fomento Venezolano (Venezuelan Development Company). “Such a company,” an aide suggested to Nelson, “would give us the perfect excuse to get around the country to get to know the local political and business people in the rest of Venezuela, and, as always, to keep our eyes open for other possibilities for ourselves.”3 Some of these “other possibilities” included food distribution, asbestos, and pharmaceuticals.4
As the Nazi blitzkrieg swept over France, Compañia officials began looking toward a possible postwar era in which Rockefeller interests would be competing peacefully in Venezuela with the companies owned by triumphant Nazis. Nelson sent Carl Spaeth to Caracas to evaluate the feasibility of further investments in light of the war. Spaeth was enthusiastic. “To postpone such programs as ours until after the war is to lose an excellent opportunity to get in a substantial position in advance of German commercial interests … in the event Germany wins the war.”5
Later, even after taking public office in Washington, Nelson would commission Spaeth to investigate the potential for private investments. To avoid a legal conflict of interest, Nelson would not actually pursue these Venezuelan options until after the war.
As the elections of 1940 approached, two powerful groups with overlapping concerns were emerging to formulate a new U.S. strategy toward Latin America.
One group, led by Undersecretary of State Sumner Welles, Assistant Secretary Adolf Berle, and Pan American Union head Leo Rowe, was visible to the public and the press. The other group met in private corporate offices and centered on Nelson Rockefeller. Outsiders called it “the Group,” but it called itself the Junta. And its convener was not Rockefeller, but a social scientist turned businessman who represented the point of contact between the two groups: Beardsley Ruml.
THE JUNTA MEETS ROOSEVELT
Ruml was Nelson Rockefeller’s advance man in Washington. Considered brilliant, Ruml had won a reputation in higher circles as an idea man, and his newest idea was a Rockefeller-led commercial and cultural assault on Axis influence in Latin America. By the end of 1938, Ruml was trying to get young Rockefeller the proper entrée into the Democratic White House through Harry Hopkins.
Hopkins was the perfect choice. Since Roosevelt had elevated him from chief of the Works Progress Administration to secretary of commerce in 1938, Hopkins had allied himself with Adolf Berle in fostering a new policy of closer cooperation with big business. The policy recommendations he received were increasingly focused on Latin America.
Hopkins shared Berle’s distress over German competition in Latin America. He agreed with the assistant secretary’s view that German commercial rivalry was a threat to U.S. national security, remarking to the press that “today foreign trade is being used by some countries as a vehicle to support political and cultural penetration.”6 This was the perfect climate for Ruml to introduce Nelson Rockefeller to the White House’s inner circle.
“Congratulations!” Ruml wrote Hopkins in December 1938. “If you are to be in New York soon, I think it would be well worth i
t for you to spend about two hours at leisure with Nelson Rockefeller to hear his views on U.S. commercial relations with South America, a subject on which he is well informed and very much interested. Nelson Rockefeller would esteem it a privilege and I should be delighted to arrange.”7
“I would like very much to see Nelson Rockefeller,” Hopkins replied in January.8 By March, Nelson was standing before the president of the United States.
Roosevelt’s curiosity about Rockefeller had actually been piqued the previous summer, when he was told that Nelson Rockefeller was “sympathetic—he feels quite differently from some of the members of his family.”9 Now, following Nelson’s meeting with Hopkins, an appointment was set up with the president, apparently at Rockefeller’s request.
Roosevelt had personal reasons for wanting to meet Nelson. The president was seeking an unprecedented third term in 1940. Winning over an heir of the family that was doing its most to make Wall Street stockbroker Wendell Willkie his Republican successor would be a coup. It might even encourage support from some business circles.
By the time Nelson left the White House, the president had agreed to participate in an international radio broadcast celebrating the new home of the Museum of Modern Art (MOMA). His participation in the broadcast would greatly enhance Nelson’s reputation across the United States. Nelson also planned to use the museum to ingratiate himself with Latin America.
Roosevelt’s fifteen-minute congratulatory speech on May 10 was politically innocuous enough, but Nelson’s own address caused quite a stir among devotees of art. Nelson neglected to mention that the museum was ten years old or that others had helped to found it. “‘It sounded as though the Museum had just opened that night,’ a member of the audience later reported. ‘It came as quite a surprise to the staff.’”10 To Latin Americans who listened, MOMA had just opened that night, and Nelson Rockefeller was the assumed benefactor. This event set the stage for Nelson’s surprising move into international diplomacy: He offered the Cárdenas government, in the middle of the oil crisis, a MOMA exhibition on twenty centuries of Mexican art. President Roosevelt, he promised, would again be the star draw.
