South American shipping was not large, but it suffered its share of losses. The German submarine campaign of 1917 led to protests from rnost of the South American republics, a number of which followed the United States in breaking relations with Germany (Brazil, Peru, Ecuador, Bolivar, Paraguay, Uruguay). The action of Brazil, the ArFentine and Chile was watched with particular interest In both the Argentine and Brazil there were hundred, of thousands of German settlers among whom an active Pan-German propaganda had long been carried on. Germany's hope of extending political control over parts of these two states was well known. There were also hundreds of thousands of Italian settlers, many of whom —perhaps 50,000—had been called back to fight in 1915. Their loss, and the stoppage of immi gration, increased the labor shortage. In Chile the German trained army was said to be Teutonic in sympathy, luit public opinion was divided. After brealcing relations with Germany, 11 April 1917, Brazil a few weeks later *revoked her neutrality" in order to show solidarity, and seized German shipping. On 26 October, following the sinking of the Macau, Brazil declared war. The Brazilian navy as sisted in hunting for raiders and submarines. The Germans in southern Brazil made some trouble, but it did not prove serious. In the
course of the negotiations between Argentina and Germany as to the safety of Argentine shipping, the German Ambassador, Count Lux burg, advised his government that two small ships then at sea should either be spared or "sunk without leaving any trace.* The publi cation of this dispatch by the United States led Argentina to dismiss Luxburg. In September Congress voted to break relations with Ger many, but on the repudiation of Luxburg by Berlin, President Irogoyen refused to take further action. A reference in another of the count's dispatches to *reorganizing* southern Brazil aroused anger in that country. By the end of the war South America had not recov ered entirer from the initial depression. On the whole, however, the grovernments came through financially in better shape than might have been expected. Home manufacturing and the use of home resources were stimulated. The need of greater diversity of home products was realized. Germany's commercial hold was for the time broken, and the menace of political aggression ended. Pan-American co-operation and solidarity were increased, and closer politi cal and economic ties with the United States established.