by Gerard Colby
Nothing like this had been seen from Indians since Emiliano Zapata led the villages of Morelos to revolution in Mexico. The Inter-American Indian Institute noted the seriousness of the Indians’ resolve: “The Congress passed posthumous homage to … the leaders of the great revolution of the Indians against Spanish domination who gave their lives for this great cause.”5
Any passing of the torch of Zapata to the Indians of the Andes was cause enough for alarm in Washington in normal times. But these were not normal times. Since the fall of Malaya to the Japanese in early 1942, Bolivia’s Indians produced 67 percent of the world’s tin concentrates. They were, literally, the greatest source of tin imported into the United States.
All this came crashing home to Nelson in December, when the second event involving Bolivian Indians that year shook the foundations of the Good Neighbor Policy. Overworked Indian miners, who faced an average life expectancy of fewer than forty years, refused to work at the Patiño Company mine at Catavi. The U.S. ambassador intervened on the side of Patiño. The Peñaranda regime, now confident of U.S. support, unleashed its troops on the miners’ camp on December 21. When the smoke lifted, hundreds of miners and their families lay dead.
The Catavi Massacre made headlines around the world. And in the furor that followed, a startling discovery was made: One of Nelson Rockefeller’s top aides, Joseph Rovensky, was a director of the Patiño Mines. An assistant coordinator of the CIAA, Rovensky had been involved in negotiations with the Export-Import Bank for financing for the Patiño Mines, one of Nelson’s earliest concerns.6 Rovensky had to go, but not too far; he returned to his duties in Manhattan at Chase National Bank.
The loss of Rovensky came at a difficult time for Nelson. The Coordinator’s far-flung enterprise felt its first shudder of imminent collapse with the winding down of the war in 1943. For the first time since Nelson took office, the CIAA’s budget began to contract, not expand.
Berent Friele was the first to grasp what this would mean for Nelson’s relations with his Latin American constituency and alerted him of the need for a tactful withdrawal. Promises had been made and hopes raised, especially for U.S. cooperation in Brazil’s development of its Amazonian interior. Now, as Washington’s concerns switched from winning the war to how its interests would best be promoted in the postwar period, the year-long honeymoon with Vargas since Brazil’s August 1942 declaration of war would soon be over.
“As the postwar transition develops,” Friele confidentially wrote Nelson, “there can be expected to be a considerable amount of criticism, blame and complaint. Since the Americans are almost the only foreigners who have been active here for many months now, most of the blame for the difficulties and problems of any character can be expected to be placed on the United States.”
Friele recommended closing down CIAA’s fieldwork as soon as possible to avoid “discredit,” transferring the expensive food and sanitation programs to the Brazilians and the information, science, and education programs—those most useful to intelligence gathering and psychological warfare—to the U.S. Embassy. He considered an “organized aggressive public relations program on behalf of the U.S. Government a matter of prime necessity,” conceding that it would be “an extremely difficult job.”7
It was an impossible job. The expansion of aviation in the interior was curtailed on the grounds that the waterways of the Amazon basin were sufficient for handling the rubber shipments. Then Rockefeller’s Inland Waterways Project linking the Oficina oil fields of Venezuela’s Orinoco River with the Amazon was canceled on the grounds that the Brazilian navy had successfully cleared the coast of German submarine wolf packs. Finally, the rubber program itself was slowed.
It took only two months for the Vargas government to pick up the signals from Washington. It was a bitter reminder of the last time the Amazon had been used and abandoned.
Nelson had always been convinced that abandonment of the Good Neighbor Policy would spell disaster for American business interests, including Standard Oil, in Latin America. But now he also had a large personal stake. His meteoric rise in Washington had been tied to Latin America. Should the hemisphere’s place in Washington’s galaxy of stars fall, so would Nelson’s career.
It was impossible for Nelson to challenge the prominence of Europe in the minds that ruled the White House. The war in Europe had always been the main object of the CIAA’s programs in Latin America, and the keystone of the Grand Alliance that arched across the Atlantic was Anglo-American cooperation with the Soviet Union, the ally that bore the brunt of the fighting.
In 1943, Nelson saw just how much importance the president placed on this alliance with the Soviets. Two of Nelson’s closest mentors at the State Department, Assistant Secretary for Latin America Adolf Berle and Undersecretary of State Sumner Welles, lost their jobs over it.
ALLIES LOST FOR ALLIES GAINED
Adolf Berle owed his fall from grace in the Roosevelt administration largely to a scandal involving Standard Oil.
In 1942, the Justice Department had revealed that Standard Oil had refused to surrender its control over patents for making Buna artificial rubber, patents it had obtained years ago in a deal with Germany’s giant chemical combine, I. G. Farben, with no apparent regard for American national security.
Farben, at Hitler’s behest, had refused to turn over information on the actual manufacturing processes. Standard Oil not only acquiesced, but continued to provide Farben with technical data on its own research, including the development of synthetic rubber.8
All this, and the fact that the Nazi company was the second largest stockholder in Jersey Standard (the Rockefellers being first), was revealed in March 1942 by the Attorney General’s office. Members of the Senate Special Committee to Investigate the National Defense Program were so stunned that Chairman Harry S. Truman left the hearing angrily talking about “treason.” Criminal charges were filed against Standard Oil for knowingly joining with the Germans in a conspiracy to restrain trade and competition between American companies, delaying the manufacture of Buna in the United States.
Two years later, the U.S. government would receive confirmation that Farben used slave labor from the Auschwitz concentration camp to manufacture Buna and synthetic gasoline at adjacent new factories.9 Those not working were gassed with Zyklon B, which Farben also supplied.
While Standard Oil’s patent deal with the Germans was exploding in the nation’s headlines, a respected gadfly newsman, I. F. Stone, wrote an open letter of protest to Nelson’s father. An agitated Junior insisted that Standard Oil’s board should improve the company’s public image.10 For a family disclaiming any control over Jersey Standard, their intervention worked marvels. Jersey Standard’s old guard suddenly crumbled.
Adolf Berle stumbled into the controversy. As German tanks overran eastern Russia to meet the Soviets’ last stand at Stalingrad, Berle, as head of State Department intelligence, opposed the administration’s decision to provide the Soviets with what the Germans already had: Buna artificial rubber. Berle’s ideological war against communism could brook few compromises between the Allied powers. He had already caused a sensation for defying Roosevelt’s July 25, 1941, order to turn I. G. Farben’s synthetic oil process over to the Soviets.11
Berle’s fate, no doubt, was sealed by the resignation in September 1943 of his mentor, Undersecretary Sumner Welles. The austere, courtly Welles had earned Secretary of State Cordell Hull’s enmity for taking a soft stand against the pro-Axis government of Argentina at the Foreign Ministers Conference in Rio de Janeiro in January 1942. Welles hoped to coax Argentina gently into the Anglo-American camp. But Hull would have no part of it. Argentina’s return to the fold could spell disaster for the Grand Alliance. The Soviets would view it as a betrayal of the Anglo-American pledge to fight fascism to the end. Worse, a U.S.-led inter-American alliance containing a pro-Axis power as a major military component would signal that Washington already was preparing postwar regional military pacts with reactionaries who were
hostile to the Soviets. Hull believed that such an alliance would endanger the war effort and destroy the postwar cooperation between the Allies that was essential if the proposed international successor to the defunct League of Nations, the United Nations, was to have any chance of success. Hull insisted that Argentina first break relations with the Nazis before U.S. relations with Buenos Aires could be improved.
As Nelson and Berle watched anxiously from the sidelines, matters came to a head when the seventy-two-year-old Hull, claiming illness, told Roosevelt that he would be unable to attend the Allies’ Foreign Ministers Conference in Moscow. But when Hull heard that Welles had been asked in his stead, he informed President Roosevelt of his readiness to attend the conference “anywhere between here and Chungking.” This vote of no confidence from his boss was more than Welles could take. His resignation was announced by the president on September 25.12
Nelson Rockefeller quickly took stock of his declining fortunes. His CIAA was winding down its operations. His major supporters in the State Department, Welles and Berle, had either been purged or stripped of influence, leaving him alone to face Hull in the department. Since his base of support in the department was eroding, there was only one direction he could go: up. He had to try to succeed Berle as the assistant secretary of state for Latin American affairs. His ambition, however, was too desperate not to be obvious.
“I particularly remember a weekend with Nelson Rockefeller,” William 0. Douglas recalled years later. Roosevelt had invited Nelson to his mountain retreat, Shangri-la, now Camp David. “Nelson asked me what I thought his chances were. I replied, ‘Nelson, if FDR was going to make you Assistant Secretary of State he would not bring you down here for a weekend, keeping you full of suspense.’
“‘Then why was I invited?’
“‘I’m not sure, but I think it’s a consolation prize.’”13
Nelson Rockefeller had never been satisfied with consolation prizes.
THE BETRAYAL OF HULL
Bolivia’s Indians provided Nelson with the perfect opportunity to get his foot in the door of the State Department. In December 1943, just one year after the Catavi Massacre, Indian miners supported young military officers in overthrowing the pro-American regime of General Peñaranda. The loss of his regime was looked upon with deep suspicion by Secretary Hull. Rumors of Axis subversion flew wild in Washington. The officers, in fact, saw themselves as continuing the “military socialism” of the previous Bolivian president who had nationalized Standard Oil’s properties. They encouraged the miners to organize more of their own democratic trade unions and to present their grievances to Patiño Mines and the other corporations.
Nelson, sensing his opportunity to curry favor, leaped onto Secretary of State Hull’s bandwagon, fanning popular paranoia of Nazi intrigue in Argentina as a prelude to turning that paranoia against “fascist influences” in Bolivia. In a reversal of previously held positions, Nelson proclaimed Argentina a nest for Axis subversion of its neighbors. He proposed a full economic boycott.
As could be expected, Hull was delighted with Nelson’s conversion and scurried off to the White House to show Nelson’s memorandum to the president. Roosevelt, just as expectedly, was wary. He sent the proposal off to London and got a predictable reply. No, cabled Winston Churchill, a boycott of Argentine beef and grains was exactly what Britain did not need. Its need for food was more important than its need to chastise Argentina.14
Both governments quickly bent, anyway, to the pressure of Hull’s broad brush painting them pro-Nazi. Bolivia got renewed credit by proclaiming loyalty to the Allied war effort. Argentina broke off diplomatic relations with the Axis powers and then, logically enough, sought closer ties with the United States, including military aid.
Hull now made the first of a series of mistakes that would end his career. He delivered a blustering note to Argentina, attacking her neutrality in tones just short of a tirade. Latin America was aghast. A significant move had been made by Argentina toward inter-American solidarity. Instead of encouraging it, Hull had condemned it, and with the imperiousness of the American bully of old. Was the Good Neighbor Policy dead?
The following month, Argentina’s President Pedro Ramírez, in the midst of a dispute with Minister of War Juan Perón, was overthrown. But Hull did not see this as an opportunity for a fresh start. He not only continued to withhold recognition, but he got Roosevelt to agree to impose limited economic sanctions partly along the lines Nelson had proposed.
Rockefeller’s partial triumph quickly became Hull’s diplomatic disaster. Churchill again refused to go along with the sanctions. So did Bolivia, Chile, Paraguay, and Uruguay.
As inter-American unity began to crumble in Hull’s hands, the architect of the secretary’s policies basked in the anti-fascist limelight. On the night of May 8, Nelson stood before a crowd gathered to do him honors. The Pan American Society, which the CIAA had funded, presented him with its gold medal “in recognition of his efforts toward inter-American unity and cooperation.”15
Junior and Abby were in the audience. Abby beamed with pride. But Junior sat with his back to Nelson, his arms crossed, his chin resting pensively on one raised hand. The distance between father and son was greater than ever.
The next day Junior attempted one last time to reach out in his old age with a letter that was rare for its expression of emotion. He had chafed over the scandal surrounding Standard Oil’s relations with I. G. Farben and the Nazis. Recognition of Nelson’s service helped restore the family’s honor:
I was very proud of you last night, proud of the recognition … proud of the appreciative words spoken about you; proud of the wholly charming, modest manner in which you accepted … proud of the many expressions of affection and devotion to you.… I never was surer of the importance of friendly relations among the various countries of the Western Hemisphere than I am today. You have proved to the world that such relations are possible.… And so, with a full heart of pride, joy and gratitude, I say: “Well done, my son, you have wrought a good work … you have brought added credit to the family name.” Affectionately, Father.16
It was too late. Nelson had, on his own, arrived at a sense of his worth, but through an appreciation of power, of how he could use the enormous wealth and influence of his family to accomplish his own ends.
Nelson’s ambition was a fire burning so brightly that it inspired some, frightened others, and blinded most. It was not that his devotion to the war effort was so much different from that of other dollar-a-year men of wealth in Washington. What was troubling was the rapidity and ease with which he discarded principles he had earlier proclaimed. Each new course of action, no matter how contradictory to what preceded it, was described with such dedication that there could be no doubt of its momentary sincerity. Others with less moral resilience watched in awe, terror, or sometimes disgust.
J. D. Le Cron, for one, discovered that all food projects of his Food and Supply Division had to be oriented toward extracting the maximum amount of natural resources out of Latin America for U.S. industries. He concluded that Latin America’s economic development was not Nelson’s true concern, and resigned.17 Nicolo Tucci, director of the State Department’s Bureau of Latin American Research, also resigned. “I became aware rather slowly that these [CIAA] people were only after their own interests,” he recalled years later, “and that they were sort of sorry that they had to fight the Nazis.”18
Nelson had caught the drift of a new attitude toward Argentina—an inclination toward cooperation—as postwar planners became more concerned about regional spheres of influence and maintaining security within them than with past ideological differences. Washington had changed a great deal during the war, much as Josephus Daniels had feared. The change was readily apparent in the increase in the number of military officers and corporate lawyers. War had turned the close cooperation between business and government, advocated by Roosevelt during the prewar New Deal, into an almost incestuous relationship. Not only were busine
ssmen wearing braids and brass, but the Pentagon seemed a vast daytime hotel for corporate lawyers negotiating fine, profitable points into contracts.
Sources of Essential Raw Materials in Latin America
An American view of natural resources in Latin America during World War II
Source: National Industrial Conference Board, Foreign Trade and Hemisphere Unity, May 1941.
Corporate net profits from the 1940–1945 boom amounted to $117 billion, a staggering 450 percent increase over the $26 billion made between 1934 and 1939.19 But a dark side to all this prosperity loomed beyond the day when the last of 400,000 crosses replacing lost American lives would finally be planted. Paradoxically, prosperity carried the seed of its own destruction, for its corporate form demanded the same level of profit performance in peacetime as in war, lest private investors sell their declining stocks to minimize their losses.
As postwar planners began to realize the full social, and hence political, implications of the new, highly productive technology brought into American factories by war contracts and government subsidies, subliminal warfare broke out in Washington’s bureaucracies between big-business lobbyists, who sought to delay the reconversion to peacetime production, and small-business advocates, who wanted to speed it up. Big firms like General Electric prevailed, taking longer to convert precisely because of their deep profitable involvement in war production. It was a sign of just how far Washington had come since the New Deal ended that it was Roosevelt’s former corporate foes, not his New Deal friends, who won.20 Reconversion was delayed, heralding the coming of age of a new behemoth in American life: the military-industrial complex.