Chapter Twenty-Five: The Good Neighbor Policy (1933-1941)

25. The Good Neighbor Policy (1933-1941)

The "good neighbor" policy, Roosevelt's program toward Latin America, was a cornerstone of the New Deal. In his Inaugural Address of March 4, 1933, the president introduced this program, stating that "In the field of world policy, I would dedicate this nation to the policy of the good neighbor—the neighbor who resolutely respects himself, and, because he does so, respects the rights of others." This doctrine the president also enunciated shortly afterward in Montevideo, Uruguay, at a meeting of the American states. Thenceforth, until his death, the good neighbor policy, so far as Latin America was concerned, remained a definite part of the general Roosevelt program.1

Roosevelt followed up his professions of inter-American friendship and equality at Montevideo by introducing a minimum of liberalism into United States-Latin American relations. He proceeded to abolish the Piatt Amendment in Cuba, which gave the United States the right to intervene in that country; he abrogated the U.S. treaty right to send troops into Mexico; he withdrew American troops from Haiti and other Caribbean countries; and he abandoned the "right" of the United States to interfere in Panama and the Dominican Republic.

These steps were widely hailed in Latin America and the United States as signifying the end of Yankee imperialism in Latin America and the beginning of a system of fraternal equality among the nations of the western hemisphere. But this, of course, was incorrect. The same fundamental imperialist-colonial relations remained between the United States and the other countries of the Americas. The "Colossus of the North" continued, under even more favorable circumstances, to dominate the economic and political life of its Latin American and Canadian neighbors. This was the net effect of the good neighbor policy. American investment remained and continued to draw huge profits, and Yankee political intervention went right on in more subtle forms, as illustrated by U.S. opposition to the overthrow of Machado in Cuba, its interference in the Gran Chaco War in South America, its support to the fascist opposition to Cardenas in Mexico, its interference in Argentina, and the like.

Roosevelt with his New Deal did not abolish monopoly capitalism in the United States; nor did he, with his good neighbor policy, do away with Yankee imperialism in the rest of the hemisphere. In both instances, with his liberalism, Roosevelt simply adopted a few badly-needed reforms in order to make this system of exploitation more workable. The fact is the good neighbor policy operated so advantageously for American imperialist interests that it soon came to be endorsed by the big American monopolists as an effective imperialist policy, and their political leaders vied with Roosevelt in claiming its authorship.

The good neighbor policy was not officially designed to apply to highly industrialized Canada, although Wall Street definitely considers that country to be part of its ail-American hinterland and accordingly carries on an active economic and political penetration of it. American investments in Canada now total over $6 billion and are rapidly increasing; whereas those of Great Britain are only about one-fourth as much and are steadily diminishing. American political influence is correspondingly growing in Canada, and British influence is in decline. The United States, with its many bases, has now established virtual military control over Canada, and it has the further imperialist advantage in the fact that the labor union movement of Canada is dominated by Americans, through the A.F. of L. and Railroad Brotherhoods, to which it is mainly affiliated. The C.P.U.S.A. has always co-operated closely with the Communist Party of Canada in its fight for the national independence of its country against the encroachments of Wall Street.


When President Monroe proclaimed on December 2, 1823, the doctrine which came to bear his name, it was primarily an attempt to prevent the newly-freed colonies of North, Central, and South America from becoming re-enslaved by the Holy Alliance (Russia, Prussia, and Austria) or by Great Britain. But even in those early years there were many American landgrabbers and expansionists who looked forward to a time when the United States would dominate the whole western hemisphere. As early as 1786 the liberal Jefferson declared, "Our confederacy must be viewed as the nest from which all of America, north and south, is to be peopled." 2 And in 1820, Henry Clay, expressing similar widely-held expansionist ideas, proposed a Yankee-run league of "all the nations from Hudson Bay to Cape Horn."3

With the growth of the United States, and especially with the development of American imperialism in the period of 1880-1900, Yankee interventionist tendencies in Latin America grew much more pronounced. The Monroe Doctrine became transformed into an instrument to lend a legal coloring to American domination of the hemisphere. The Pan American Union, a U.S.-inspired association of Latin American states under American hegemony, was organized in 1889. It was from the outset a weapon of Yankee imperialism with which to combat the British imperialists and to exploit the Latin American peoples.

As a result of the Spanish-American War of 1898 the United States seized Cuba, Puerto Rico, and the Philippines and other strategic islands in the Pacific. It was the beginning of the establishment of an American colonial empire. Then followed a whole series of gross imperialist military and political aggressions, some of the more important of which were the seizure of Panama, interference in Venezuela, occupation of Haiti, the Dominican Republic, and other Caribbean countries, invasion of Nicaragua, intervention in the Mexican Revolution, and the making and unmaking of various Latin American governments. The symbol of all this ruthless Yankee imperialism was President Theodore Roosevelt, with his "dollar diplomacy" and his "big stick," arrogantly asserting the right of the United States to police the whole western hemisphere.

Behind this extreme political and military aggression by the United States was a no less active drive for the imperialist economic penetration of Latin America. In 1900 American investments in Latin America were very small, but by 1913 they reached $173 million, and by 1930 they had skyrocketed to almost $5 billion. United States-Latin American trade developed correspondingly; by 1938 the United States was selling Latin America 39.8 percent of its imports and buying 32.8 percent of its exports. 4 These economic activities were highly advantageous to the United States, profits ranging from 10 to 50 percent. Rippy says that by the end of 1930 the bulk of the mineral resources of Latin America was owned by United States capitalists. 5 It was estimated that the United States in 1934 controlled in Latin America, "all the bauxite, a considerable part of the coal, about 90 percent of the copper, one-third of the gold, practically all of the iron ore, more than one-third of the lead, one-half of the manganese, over one-half of the petroleum, approximately one-half of the platinum, 70 percent of the silver, only one-tenth of the tin, all of the tungsten and vanadium, and two-thirds of the zinc." 6 The economic and political domination of the United States was particularly marked in the Central American countries of the Caribbean area. 7 The United States has long reaped super-profits from its big investments in Latin America. In 1951, the rich United Fruit Co. alone pulled out profits, after taxes, of $66,159,375. American concerns are now milking Latin America of at least half a billion dollars yearly. Lazaro Pena, Cuban labor leader, states that between 1913 and 1939, the imperialists (mostly the Americans) drew $6.5 billion out of Latin America and reinvested there less than $2 billion. 8


By the time Franklin D. Roosevelt came to the presidency in March 1933, the—to Wall Street—hitherto very favorable situation in Latin America had fallen into sad disarray. The great cyclical crisis had played havoc with economic conditions. Latin America, like the United States, was flattened by the industrial holocaust; so that United States-Latin American trade fell off from $686 million in 1930 to but $96 million in 1932, and American yearly investment in the Latin American countries, which amounted to $175 million in 1929, was nothing at all during the years 1931-35.

To make matters worse, new and dangerous competitors were appearing on the horizon to contest the Latin American markets and political controls with the Yankee businessmen. These rivals were Germany, Italy, and Japan. The history of Latin America had been one long record of a developing struggle, chiefly between British and American imperialism, for economic and political supremacy, with the British slowly getting the worst of it. But especially with the rise of fascism and in view of the intense importance the fascists placed upon conquering Latin America, the Germans, Italians, and Japanese constituted an additional set of militant imperialist enemies who were a real menace to Yankee imperialism and the Latin American peoples.

Moreover, the workers and peasants of Latin America, like the toiling masses in the United States, were beginning to organize politically and in unions and to go on the march against their exploiters after the terrible years of the great economic crisis. Much of their resentment was directed against the Yankee capitalists, who everywhere were allied with the domestic big landlords and employers. The peoples were very bitter against Wall Street imperialism, which for so many years had inflicted upon them the grossest indignities and injuries.

It was to improve the position of American imperialism in this most unfavorable situation that the good neighbor policy was formulated, carrying as it did some recognition of the national independence of the Latin American states. The good neighbor policy, particularly in the latter 1930's, had some stimulating effect upon the peoples' defeat of the fascist attempts to seize the governments of Brazil and other countries, and also was a factor in uniting the Latin American peoples for the international struggle against fascism during World War II.


Latin America is very much less developed industrially than the United States. Although that great area has adequate material resources and a population just about as large as that in the United States, nevertheless its industrial output is hardly more than 10 percent of that of the latter country. In the United States only 20 percent of the population are actual farmers, whereas throughout Latin America the average runs to about 70 percent. There are in the United States six times as many miles of highway, four times as much railway mileage, 20 times as many telephones, and 30 times as many automobiles as in all of Latin America. The production capacity of the steel industry of the United States (about 105,000,000 tons annually) is about 70 times that of the whole of Latin America (1,500,000 tons).

The economic underdevelopment of Latin America generally (some countries, such as Argentina, are more advanced, and others, like Paraguay, more backward) stems primarily from the relative incompleteness of the bourgeois revolution in these countries. The hemisphere-wide bourgeois (i.e. capitalist) revolution through the years 1776-1837 shattered the colonial systems of Spain, Portugal, France, and Great Britain in America. It made the American peoples politically independent; it set up a score of new states, and it gave a tremendous impulse to the development of capitalism throughout the western hemisphere.

In Latin America, however, the revolution was incomplete, in that it did not result in breaking the power of the big feudal land-owners. Consequently, down to the present time the latifundia system of immense landholdings prevails over almost all of Latin America. Small farmers hardly own more than 10 percent of the land in the aggregate, and the vast bulk of the land workers own no land at all. The big landowners, besides using incredibly backward techniques in agriculture, have deliberately checked the growth of industry. Their domination of the national governments and of the national economies has thereby restricted the growth of the characteristic capitalist, middle, and working classes. The landowners are the chief source of the many tyrannies and dictatorships that have plagued the Latin American peoples for generations. The Catholic Church, with its powerful economic, political, and ideological controls, is tied in with this reactionary big landowning system, which is the basic curse of Latin America.

Imperialist economic and political penetration of Latin America, which became an important factor from about 1880, has operated even more powerfully to hinder the growth of Latin American industry. This is because the imperialists develop only such enterprises—usually mining, transportation, and certain plantations—as serve their exploitative purposes. They pump huge profits out of the countries and rob them of their natural resources. They especially prevent the development of all industries which would produce the means of production and thus bring about an industrialization competitive with the imperialists. They also contribute to maintaining the latifundia system, both by political alliances with the landowners and by grabbing great stretches of land for themselves—examples being the vast holdings of the United Fruit Co. in Central America, the gigantic American sugar and coffee plantations in Cuba and Brazil, Ford's big plantation in Brazil, and the huge copper, coal, oil, and other mineral lands owned by United States capitalists in Chile, Peru, Brazil, and elsewhere. The American holdings in Venezuelan oil and iron are fabulously rich.

One of the worst features developed by this big landowner-imperialist system is so-called monoculture. This is the production of but one or two commodities for export by a given country, whether coffee, sugar, bananas, copper, oil, or whatnot. Thus, in five republics more than two-thirds of the total value of their exports comes from one product, in six from two products, and in five from three. The most deadly effect of monoculture is that this system prevents the development of an efficient agriculture and a rounded-out industrial economy, making the given country dependent upon the foreign imperialists for all sorts of manufactured goods; and it also leaves the various countries totally exposed to the disastrous fluctuations of world market prices for their export commodities.

Another very detrimental feature of the Latin American economy, bred of imperialist dictation, is the dependence of its foreign and domestic trade upon the interests of the dominating foreign capitalists, principally Americans. By controlling the main market for a country's given product—say Cuban sugar, Brazilian coffee, or Caribbean bananas —the United States is able to establish arbitrarily the price of these commodities, to restrict the respective countries from trading with each other or with rival imperialist competitors, and to dump its own goods upon their domestic markets at extravagant prices.

What the United States has done in the Philippines and Latin America (including Puerto Rico, an outright colony) is to build up a vast system of puppet governments more or less completely under its control. It is a lie to say that this country is opposed to colonialism. Wall Street's specific type of colonialism, in which the colonialized lands are given a shadow of political independence, is merely a more up-to-date brand, designed to confuse the people's demand for national liberation.


As the result of the ferocious oppression and robbery which they have experienced for so long from landowners, local capitalists, and foreign imperialists, the peoples of Latin America have been pushed down to extremes of poverty and destitution. Wages for workers in industry average from one-tenth to one-third of what they are in the United States, while the great masses of agricultural workers in the haciendas, estancias, and fazendas—mostly Indians, Negroes, Mulattoes, and Mestizos 9—live in a state of virtual peonage, overwhelmed with debt to the landowners.

Conditions of semi-starvation are widespread in many of the Latin American countries. "Two-thirds, if not more, of the Latin American population are physically undernourished, to the point of actual starvation in some regions," say George Soule and his associates. 10 Illness and early death are the inevitable consequences of such extreme poverty. The toiling masses are saturated with sickness, including tuberculosis, malaria, syphilis, gonorrhea, dysentery, trachoma, typhoid, hookworm, jungle fever, and many other diseases. Miguel Pereira, a Brazilian scientist, recently remarked that "Brazil is an immense hospital," and the same could be said with equal truth of many other Latin American countries. "One-half of the Latin American population," say Soule and his co-writers, "are suffering from infectious or deficiency diseases." The annual death rate in Latin America is over twice as high as it is in the United States. Mass illiteracy naturally accompanies this dreadful poverty and sickness. There are 70 million illiterates in Latin America and 50 million more who have had only one or two years of schooling.

American imperialists, because of the exploitation they practice, are largely responsible for these horrible conditions in Latin America. But, characteristically, they shrug off this responsibility, attributing Latin American poverty to what they slanderously call the shiftlessness and
incompetence of these peoples. They cannot, however, evade their responsibility for the miserable conditions prevailing in Puerto Rico, which for over half a century has been completely under American domination. When it was taken over by General Miles' forces during the Spanish-American war in 1898, Puerto Rico was promised early freedom. But this promise has been flagrantly violated and Puerto Rico has ever since remained a colony, a United States military base guarding the Panama Canal. It suffers all the typical economic ills of colonialism, as well as all its political tyranny. The island has a monoculture—sugar, and it has been prevented from developing substantial manufactures. Its trade, both foreign and domestic, is controlled and dominated by the United States. Wages are about one-third as high as they are in the United States, although the cost of living is about the same in both countries. Sickness is rampant, and the huge slums in San Juan and other Puerto Rican cities are among the worst in the world. The whole situation is a burning crime against the Puerto Rican people and a disgrace to the United States. Similar conditions prevail in the Virgin Islands, owned by the United States since 1917.


During the great 1929-33 economic Crisis in Latin America, when unemployment ran as high as 50 to 75 percent in the various countries, the workers and peasants conducted many hard fights in order to live. After 1933, with the rise of world fascism, and particularly in view of the determined efforts of domestic reactionaries and Hitler-Mussolini agents to set up fascist governments in Latin America, these struggles of the democratic peoples took on a broader scope, a deeper intensity, and reached higher political levels. The Seventh Congress of the Comintern, with its slogan of the people's front, gave a clear political direction to this mass fight.

Among the most significant of the mass struggles in Latin America during this pre-war period was the revolutionary overthrow in 1933 of the bloody Machado tyranny in Cuba, an action which brought about many vital democratic reforms in that country. In Chile also, after long and bitter struggles, a people's front government—the first in the western hemisphere—was elected in 1938. In Brazil it was the embattled people's democratic forces that prevented the seizure of the government, during 1935-37, by the Hitler-inspired Integralistas. In Mexico, during the Cardenas regime of 1934-40, the bourgeois-democratic revolution in that country took on a new and greater vigor under the pressure of the masses. There were similar people's struggles in Argentina, Colombia,  Peru, Venezuela, and various other countries. The general result of these mass struggles was that the peoples of Latin America smashed the attempt of Hitler and Mussolini, in collusion with the local reactionaries, to seize South America.

The Communist and trade union movements were the backbone of these militant struggles. In the face of the most brutal opposition, the labor organizations had built up their strength in most of the countries. They came together in Mexico City in September 1938, and formed the Latin American Confederation of Labor (C.T.A.L.), with some four million members. This was a labor event of world-wide importance. The president of the new organization was Vicente Lombardo Toledano, who designates himself as an "independent Marxist." Among the labor notables from various countries present at the founding convention was John L. Lewis, then head of the C.I.O. The advent of the C.T.A.L. marked a deep intensification of the struggle of the workers and a general raising of their fight to a higher level.

The political leaders of the broad people's front, anti-fascist struggle throughout Latin America were the Communist parties. These parties, led by such men as Victorio Codovilla, Luis Carlos Prestes, Bias Roca, Dionisio Encina, Juan Marinello, Louis Recabarren, Rodolfo Ghioldi, Gustavo Machado, and Eugenio Gomez, began to be organized shortly after the outset of the Russian Revolution. They had been building and developing themselves mostly under conditions of sheer terrorism and illegality. They were everywhere the leaders and inspirers of the people's front and the general struggle against fascist reaction. In these countries the Social-Democrats were a negligible force, save in a few places, chiefly Argentina and Chile; also the syndicalists, once a powerful element throughout Latin America, were decidedly in decline, and the counter-revolutionary Trotskyites had but tiny grouplets here and there.

Roosevelt's pronouncement of his good neighbor policy in 1933 had a stimulating effect upon the growing democratic struggles throughout Latin America. The peoples, while antagonistic to the "Colossus of the North" as a result of much bitter experience, welcomed Roosevelt's democratic utterances, his promises of fraternal relations among all the nations of the Americas, his assurance of an end to the long-continued and barbarous intervention of the United States in the lives of its Latin American neighbors. The masses also sympathized fully with Roosevelt's developing opposition to world fascism. Roosevelt's reputation as a liberal soared all over Latin America.

On the basis of the good neighbor policy, which was replete with glowing (but mostly unfulfilled) democratic promises, Roosevelt established friendly working relations with most of the governments and with the democratic forces throughout Latin America. The latter began to interest themselves in the doings of the Pan American Union, which hitherto had been "a hissing and a by-word" throughout Latin America. There was also a new all-American co-operation of democratic elements as, for example, in the International Congress of the Democracies of America, held in Montevideo in March 1939. The general outcome of all this democratic friendliness was that when the great clash came with the fascist Axis in World War II, all the countries of Latin America, with the exception of Argentina (which finally was forced to break relations with Germany) were in the same anti-fascist war alliance with the United States.


Lenin was a great champion of the colonial and semi-colonial peoples. Once, in 1920 he suggested a modification of Marx's famous slogan, "Workers of the World, Unite!" to "Proletarians of All Countries and Oppressed Peoples, Unite!"11 As a Leninist organization, therefore, the Communist Party of the United States has always interested itself deeply in the struggles of the peoples suffering under the heel of the imperialist aggressor. This has been particularly true in connection with Latin America, and above all, regarding Puerto Rico and Cuba. The Party has also always supported the struggle in the Philippines. For all this is the hinterland of Yankee imperialism, and these are the direct colonies of Wall Street. This area is definitely heading toward a great anti-imperialist, national liberation revolution, much on the broad lines of the great movements now stirring other parts of the colonial and semi-colonial world. It is the proletarian duty of the Communist Party of the United States to give these peoples its untiring support in their fight.

The Communist Party of the United States, from its inception, took a firm stand against all the manifestations of American imperialism in Latin America. It worked in close cooperation with all the Communist parties in these countries. It was active in organizing the All-American Anti-Imperialist League in Mexico City in 1924, a body which fought Yankee imperialism throughout the Hemisphere. The Party especially gave vigorous support to August Cesar Sandino, the brave Nicaraguan patriot, who for five years fought off the invading U.S. Marines, only to die in 1934 at the hands of an American-trained assassin, after peace had been established. 

One of the major means of Wall Street's penetration into Latin America during the "twenties" was the Pan-American Federation of Labor, organized in November 1918 by the leaders of the A.F. of L. These labor imperialists used the P.A.F.L. to support every incursion of Wall Street against the peoples of Latin America. The Communists of the United States, along with those of Latin America, vigorously fought this treacherous organization. Consequently, badly discredited, the influence of the P.A.F.L. waned and after 1930 it existed (for several years longer) only on paper.

The C.P.U.S.A., throughout the years, has constantly kept the Latin American question before the American working class. It participated in many inter-American conferences with the Latin American Communist parties. It attended their conventions and welcomed their delegates to its own conventions. In New York, in June 1939, six American Communist parties held a conference and issued a statement calling upon the peoples to rally to defeat fascism.12 The Communists were chiefly responsible for the friendly attitude taken by the C.I.O. toward the Confederation of Latin American Workers (C.T.A.L.). The question of Latin America has always been on the order of business in the journals and meetings of the Communist Party of the United States but the Party has never done enough on the question.

The general line of the various Communist parties during the Roosevelt era was to fight for "A democratic application" of the good neighbor policy in Latin America. In this pre-war period, however, certain wrong attitudes were beginning to develop on the question of Roosevelt's Latin American policy. A marked tendency grew up both in the U.S. Party and in the parties of other countries in the western hemisphere, to look away from the fact that Roosevelt, together with his liberalism, was an imperialist, and that the good neighbor policy, for all its democratic trappings, was a policy of Yankee imperialism, designed to meet a given different situation. Earl Browder, as usual, encouraged this serious right deviation. In 1942, when the false trend had become quite definite, he expressed it thus:

"There is still much to be done to dissipate the fear and suspicion of Yankee imperialism in order to create confidence throughout Latin America in the role of the United States as a leader of the United Nations. Memories of the past, however bitter they may be, of broken promises and violent intervention, of economic pressures, sharp diplomatic practices and financial exploitation, all could be removed to the archives of history and no longer play a damaging role in the present, once the peoples of Latin America felt an assurance that the  'good neighbor' policy was something deeper than the expediency of the historical moment."13

The essence of this Browder statement was that the good neighbor policy was not imperialist in character and that therefore, the peoples of Latin America should put their trust in Roosevelt. This was a dangerous position, a surrender to bourgeois-inspired illusions. While the main enemy in those years was Hitler fascism, nevertheless the policy advocated by Browder would have made the Latin American peoples put down their guard before an aggressive power, Wall Street imperialism. The United States, under the banner of the good neighbor policy, was rapidly strengthening its position in Latin America and infringing upon the rights and welfare of the peoples in that vast area. In the long run it was to prove, in the post-war period, even more menacing to the Latin American peoples than Hitlerism itself.

1 Foster, Outline Political History of the Americas, pp. 430-33.
2 Cited by J. F. Rippy, Latin America in World Politics, p. 14, N. Y., 1928. 
3 Cited by A. C. Wilgus, The Development of Hispanic America, p. 743. N. Y., 1941.
4 S. G. Hanson, Economic Development in Latin America, p. 424, N. Y., 1951. 
5 J. F. Rippy, Latin America and the Industrial Age, p. 194, N. Y., 1945. 
6 Cited by Hanson, Economic Development in Latin America, p. 239.
7 See Victor Perlo, American Imperialism, Chapter 5, N. Y„ 1951.
8 Conference, World Federation of Trade Unions, Havana, June 1949.
9 About two-thirds of the population o£ Latin America as a whole is non-white, and about one-half of this total is either wholly or partially of Indian descent.
10 Soule, Efron, and Ness, Latin America in the Future World, p. 4, N. Y., 1945.
11 Cited in The Communist, Jan. 1931.
12  The Communist, July 1939.
13 Earl Browder, Victory—and After, p. 217, N. Y., 1942

Chapter 26

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