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#40 The Origins of United States Economic Supremacy in South America: Colombia's Dance of the Millions, 1923-33

By Paul W. Drake

This paper was written while the author was a fellow at the Woodrow Wilson International Center for Scholars. It was presented in a colloquium of the Latin American Program on December 10, 1979.

Summary

In the extension of U. S. economic supremacy from the Caribbean into South America, foreign advisers played an integral and intricate role. From 1923 through 1931, Professor Edwin Walter Kemmerer of Princeton served as a sort of one-man International Monetary Fund to the Andean countries. The stabilization missions he headed significantly revamped the financial and fiscal systems of Colombia, Chile, Ecuador, Bolivia, and Peru. Above all, the Andean republics adopted the so-called "Money Doctor's" advice to improve their access to U.S. capital externally and their political stability internally. His missions made these countries more reliant on the "Colossus of the North" but also more capable of managing domestic affairs. Thus his reforms reinforced three major trends already underway within South America in the interwar years: (1) escalating dependence on the external sector in general and the U.S. in particular; (2) corresponding elaboration of twentieth-century capitalist institutions, practices, and patterns modeled after the U.S.; and (3) consequent expansion and consolidation of the State and its role in these changes.

Following an overview of the Kemmerer missions and their context, this paper explores his first foray into Colombia, including glancing comparisons with his other four Andean clients.

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