The history of Latin America during World War II is important because of the significant economic, political, and military changes that occurred throughout much of the region as a result of the war. In order to better protect the Panama Canal, combat Axis influence, and optimize the production of goods for the war effort, the United States through Lend-Lease and similar programs greatly expanded its interests in Latin America, resulting in large-scale modernization and a major economic boost for the countries that participated.
Strategically, Panama was the most important Latin American nation for the Allies because of the Panama Canal, which provided a link between the Atlantic and Pacific Oceans that was vital to both commerce and defense. Brazil was also of great importance because of its having the closest point in the Americas to Africa where the Allies were actively engaged in fighting the Germans and Italians. For the Axis, the Southern Cone nations of Argentina and Chile were where they found most of their support, and they utilized it to the fullest by interfering with internal affairs, conducting espionage, and distributing propaganda.
Brazil and Mexico were the only countries to send troops to the European Theater; however, several countries had skirmishes with German U-Boats and cruisers in the Caribbean and South Atlantic. Mexico sent a fighter squadron of 300 volunteers to the Pacific, the Escuadrón 201 were known as the Aztec Eagles (Águilas Aztecas).
The Brazilian active participation on the battlefield in Europe was divined after the Casablanca Conference. The President of the U.S., Franklin D. Roosevelt on his way back from Morocco met the President of Brazil, Getulio Vargas, in Natal, Rio Grande do Norte, this meeting is known as the Potenji River Conference, and defined the creation of the Brazilian Expeditionary Force.
In 1940, after he expressed his concern to President Franklin D. Roosevelt over Nazi influence in Latin America, Nelson Rockefeller of the famous family was appointed to the new position of Coordinator of Inter-American Affairs (CIAA) in the Office of the Coordinator of Inter-American Affairs (OCIAA). Rockefeller was charged with overseeing a program of U.S. cooperation with the nations of Latin America to help raise the standard of living, to achieve better relations among the nations of the western hemisphere, and to counter rising Nazi influence in the region. He facilitated this form of cultural diplomacy by collaborating with the Director of Latin American Relations at the CBS radio network Edmund A. Chester.
Anti-fascist propaganda was a major U.S. project across Latin America, and was run by Rockefeller's office. It spent millions on radio broadcasts and motion pictures, hoping to reach a large audience. Madison Avenue techniques generated a push back in Mexico, especially, where well-informed locals resisted heavy-handed American influence. Nevertheless, Mexico was a valuable ally in the war. A deal was reached whereby 250,000 Mexican citizens living in the United States served in the American forces; over 1000 were killed in combat. In addition to propaganda, large sums were allocated for economic support and development. On the whole the Roosevelt policy was a political success, except in Argentina, which tolerated German influence, and refused to follow Washington's lead until the war was practically over.
According to author Thomas M. Leonard, World War II had a major impact on Latin American economies. Following the December 7, 1941 Japanese attack on Pearl Harbor, most of Latin America either severed relations with the Axis powers or declared war on them. As a result, many nations (including all of Central America, the Dominican Republic, Mexico, Chile, Peru, Argentina, and Venezuela) suddenly found that they were now dependent on the United States for trade. The United States' high demand for particular products and commodities during the war further distorted trade. For example, the United States wanted all of the platinum produced in Colombia, all of Chile's copper, and all of Peru's cotton. The parties agreed upon set prices, often with a high premium, but the various nations lost their ability to bargain and trade in the open market.
Shortages of consumer goods and other products were also a problem during the war years. The demands of the American war industry and a scarcity of shipping caused many goods to be unavailable in Latin America, and so the prices for what was available increased. Gasoline and other oil products were expensive and difficult to obtain. Food shortages were a problem in the cities. Ultimately, all of these factors resulted in inflation.
Most of Latin America used the war to their advantage by siding with the United States and receiving aid. Peru, however, was an exception. In Peru, the government placed price controls on various products; hence, its foreign reserves did not increase as much as some of the other Latin American states and it lost badly-needed capital. Argentina, despite its pro-German leanings and its hostility towards the United States, did very well as trade increased rapidly. Panama also benefited economically, mainly because of increased ship traffic and goods passing through the canal.
In Puerto Rico, the alcohol industry boomed because access to European markets ceased. Petroleum-rich Mexico and Venezuela benefitted from the elevated price of oil. Mexico used this commodity to force a deal on its terms with American and European oil companies for the nationalization of its oil industry in 1938. Furthermore, during the war President Manuel Ávila Camacho capitalized on the situation to improve Mexico's bargaining position with the United States.
On March 22, 1942, the United States government enacted Lend-Lease, which was a program which gave war materials and other assistance from the United States in exchange for military bases and participation in the defense of the Western Hemisphere. The United Kingdom and other European nations, including their colonies, logically received the majority of the aid, because the chaos of war was much closer to them. Latin America, however, received approximately $400 million in war materials, which was a small fraction compared of what was distributed to the European nations.
Out of all of the Latin American nations, Brazil benefited the most from Lend-Lease during the war, mainly because of its geographical position at the northeastern corner of South America, which allowed for patrolling between South America and West Africa, as well as providing a ferry point for the transfer of American-made war materials to the Allies fighting in North Africa, but also because it was seen as a possible German invasion route that had to be defended. New and favorable trade treaties were signed with the United States, which offered loans and military aid, but of more importance was the drop in competition in Brazil's manufacturing industry. Brazil received three-quarters of the Lend-Lease assistance distributed in Latin America. Ecuador received some, mainly for the building of an airbase in the Galapagos, and both Colombia and the Dominican Republic used Lend-Lease to modernize their militaries in exchange for their participation in the defense of the Panama Canal and the Caribbean sea lanes.
In contrast, Argentina and Chile received very little military aid, because for most of the war neither would heed American demands that they sever all relations with the Axis powers. Peru received some aid, but by 1943 the western coast of South America had lost all strategic significance, because it was so far away from the main theaters of war, and thus Peru lost its immediate justification for Lend-Lease weaponry. The Central American nations suffered a similar fate as Peru. By 1943, the Pan-American Highway, which the United States was building for defense purposes, ceased to be a priority, and so work on the road, as well as military aid, was halted.
According to Leonard, Lend-Lease changed the balance of power in Latin America and "rekindled old rivalries." The Chilean government, for example, was very concerned about its lack of military assistance, not out of fear of an attack by Axis forces, but because it was concerned that Bolivia and Peru might attempt to use their newly acquired weapons to take back territory lost to Chile sixty years before during the War of the Pacific. Ecuador also was unhappy because, at the end of the 1941 Ecuadorian-Peruvian War, it had lost to Peru. Finally, Argentina was threatened by its old rival, Brazil, because of the latter's access to modern American weaponry. Leonard says that the Argentine dictator Juan Perón came to power partially by claiming that he would "redress this change in military status."
At the beginning of World War II, fascism was seen as a positive alternative by some Latin American leaders and groups that were impressed by Germany's Adolf Hitler and Italy's Benito Mussolini. President Rafael Trujillo of the Dominican Republic, for example, admired Hitler for his style and his militaristic rallies. Similar views were held by Jorge Ubico and Maximiliano Hernández Martínez, the dictators of Guatemala and El Salvador, respectively. According to Leonard, in Brazil, Argentina, and Chile, the strong sense of unity and purpose created by fascism was quite attractive. All three nations had an influential fascist political party[dubious ]. Brazil's Integralists dressed in jackboots and green military-style shirts, and were open admirers of Mussolini.
The politics of fascism were not all that was attractive, as in the pre-war years the Germans also enjoyed growing economic penetration using strict binational trade agreements to ensure that the economic relationship with various Latin American nations would be equal. Brazil, Mexico, Guatemala, Costa Rica, and the Dominican Republic all had trade agreements with Nazi Germany. Brazil's trade with Germany, for example, doubled between 1933, when Hitler came to power, and 1938, the year before the war began. With the start of the war in September 1939, Axis ships could no longer cross the Atlantic for commerce, and so trade between Latin America and Germany and Italy ceased. Losing trading partners hurt some of the Latin American states, and in most cases the United States was the only country that was able to replace the Germans and Italians.
Almost all of the Latin American states had to respond to Axis espionage activity. Mexico, and to a lesser extent Brazil, cooperated with the United States in shutting down Axis cells. Chile and Argentina, on the other hand, allowed enemy agents to operate in their countries for most of the war, which was a source of considerable discord between the two nations and the United States. Many of the Latin American states also had to deal with large numbers of immigrants from Axis countries. Colombia, for example, had a population of about 4,000 German immigrants in 1941, as well as a small village of Japanese farmers in Cauca. Many of the Germans in Colombia were involved in the air transportation industry as employees of SCADTA, so the United States was concerned that they might be engaged in espionage or even plot to convert civilian aircraft into bombers for an attack against the Panama Canal. As a result, the United States government pressured Colombia into monitoring and interning the immigrants or, in some cases, deporting them to the United States. The same occurred in other Latin American countries as well.
The threat of German and Spanish espionage was much more real. Throughout much of the war, the Germans operated spy networks in all of the most prominent countries of the region, including Argentina, Chile, Paraguay, Brazil, Cuba, Mexico, and others. Operation Bolivar, as it was called, was centered on clandestine radio communications from their base in Argentina to Berlin in Germany, but it also utilized Spanish merchant vessels for the shipment of paper-form intelligence back to Europe. The latter was possible because of Spanish cooperation with German intelligence agencies during the war. Although Argentina and Chile eventually "cracked down" on the Axis agents operating in their countries in early 1944, some Bolivar activity continued up until the end of the European war in May 1945.
In addition to German espionage and sabotage in Latin America, the United States was also concerned about Nazi propaganda. For example, Germany's embassy in Guatemala City served as the distribution center for Nazi propaganda in Central America. Prior to the beginning of the war in 1939, the propaganda focused on the superiority of German manufactured goods, and claimed that Germany was the center for scientific research, because it had the "world's most advanced educational system." Between September 1939 and late 1943, the propaganda focused on German victories and the superiority of its military equipment. From Guatemala the propaganda made its way to the German embassies in other countries, often as packages aboard the Salvadoran airline TACA.
Hitler's invasion of June 1941 provoked support and aid for the Soviet Union in many countries in Latin America, generally organized through voluntary organizations or trade unions. Cuba dispatched 40,000 cigars to the Red Army and in October 1942 became the first Latin American country to extend diplomatic recognition to the USSR. The war led to a diplomatic thaw more generally: by 1945, 11 Latin American states, including Colombia, Chile, Argentina and the Central American republics, had normalized relations with Moscow.
At the end of World War II in Europe, Mexican president Manuel Ávila Camacho declared: "Al enterarme del retroceso definitivo del Ejército alemán recuerdo junto con mi país los esfuerzos admirables del heroico pueblo soviético durante los años de la lucha contra las tropas fascistas." (Upon hearing of the final defeat of the German army, I, along with my country, remembered the admirable efforts of the heroic Soviet people during the years of struggle against fascist troops.)
While Jews were trying to escape exile in The Axis powers, Colonel José Castellanos Contreras, the Salvadoran Consul General in Geneva, Switzerland, saved 25,000 Jews by providing them with Salvadoran passports which could be used as a form of political asylum. This was however a very quiet and unrecognized part of El Salvador contribution in World War 2.
National police escorting members of the National Socialist Movement of Chile during the Seguro Obrero Uprising. On September 5, 1938, after four hours of fighting in Santiago, Chilean authorities rounded up and executed nearly sixty rebels who had surrendered. About twenty others were killed during the fighting.
Representatives of Latin American governments and United States retailers during a meeting in Washington, D.C. on November 1, 1939, to discuss a means of increasing trade in the Western Hemisphere.
An Italian Savoia-Marchetti SM.81 tri-motor airliner at Howard Field in 1942. This aircraft, which was acquired by the United States from the Italian-Latin American Airline (LATI), was seized in Chile by local government officials and donated to the United States Army because of shortage of transports in Central America.