America have been breadstuffs, oil, agricultural and mining machinery and general manufactures.

On the import side, it is to be expected that all of the leading items will be continued to the full extent that can be made possible. Our stocks of wool are painfully short, while our need for wool is vastly enhanced, especially in respect to army supplies. The situation is much the same in the matter of hides and all cattle products. South America's nitrate of soda, of which the bulk formerly went to European countries, is now needed urgently here, partly for the enrichment of our farm lands, partly to be manufactured into those reminders, which we are firing at the Germans, of the obligations they owe to us-phosphate supplies, among the rest. We should soon be making our own nitrogen from our own atmosphere; but it will not be available for some time to come. Copper, of which we produced a surplus prior to the war, has been largely imported to meet the greatly expanded need; and we may count on further expansion of our copper consumption so long as the war continues. The Allied line is supplied, to a very considerable extent, by motor truck transportation; so our consumption of rubber cannot be appreciably reduced unless we should be constrained to cut off the use of the automobile for personal convenience or pleasure-a possibility not to be overlooked. The rationing of the army, and the sugar situation as well, serves to increase our requirements of cacao from the tropical countries.

On the export side, it is first of all, a question of our own surplus, after supplying the fighting front and our home needs. When we are accepting wheatless days here in order to send breadstuffs to our Allies we surely must have less flour to export to tropical America, where the need may be satisfied with other grains, although corn does not keep well in such climates, and the local substitutes, such as the banana and the cassava, may become compulsory on the populations. On oil, it is again a question of what surplus we may have after the enormous requirements of the war shall have been filled; the oil market in South America has been in a state of uncertainty.

On the other hand, mining machinery, railroad supplies, and agricultural machinery and implements take rank as stimulants to the production in South America of many things needed here and by our Allies in Europe; it is to be expected that we will furnish necessaries such as these to the best of our ability.

As to the non-essentials which South Americans have been receiving from us, should it prove imperative to withhold them, we will be asking no indulgence of our neighbors which we concede to ourselves; and, however South America may invest the moneys so saved, it cannot fail to employ them for the strengthening of a credit reserve which must stand its owners in good stead later on.

The economic structure of all the South American nations, whether or not they engage actually in the war, is now linked inseparably with the fortunes of the Allies, and so long as our Western battle line holds, South American credits must continue to grow. The shipping situation naturally retards to some extent the war activities which have been so enormously enhanced with us; but it also relieves the South American countries of a measure of their war burdens. Had there been more shipping, the military demands upon Brazil might have been greater; under existing conditions Brazil's preparedness measures will result, more directly, in stamping out the possibility of internal sedition and all German intrigues. If this partial isolation of South America shall result in nothing more than a throwing off of the German poison, persistently injected for many years, the beneficial results will be so much gained.

In all the disruption attending the withdrawal of shipping from South American trade, it is of major importance to observe that it implies no measure of favor to any other nation. The ship resources of all the Ailies are pooled to meet the imperative demands of the war. If cargo space for the time being remains hard to find in our ports for service to South America, we can rest assured that it is to be found no more readily in any port of our Allies and that our relative status in South America's trade is not adversely affected. (Continued on page 70)