ABSTRACT
Most historical studies locate the quest for development in Latin America in the early Cold War period, when new theories proclaimed that it was possible to direct socioeconomic change. This chapter focuses instead on the 1930s and an overlooked aspect in the practice of development: credit. It demonstrates how a policy of recovery after the Great Depression became an instrument to improve the national economy and solve social tensions by furthering citizens’ economic enterprises, raising the standard of living, and improving social services. It analyzes the problem of debt and financial speculation from the contrasting perspectives of the state and the Catholic Church. It shows that the creation of credit institutions, especially those devoted to further agricultural production by consolidating a middle class of rural owners, was an attempt on the part of the state to solve local conflicts revolving around issues of property and economic interdependence. It highlights the great influence of the Catholic Church over official conceptualizations of economic interventionism, and shows how, by the mid 1940s, the limited results of these development efforts led economic officials to erase the political nature of credit, focusing instead on achieving economic efficiency while devising development strategies.
