But if America is attacking a South American country (e.g., instead of trying to woo it with Diplomacy over 3 VERY lucky turns)
…and destroys the newly converted German units
…and successfully invades the territory with an occupying force
…then Germany wouldn’t get the money - right?
Yes of course. But if they survive the first turn of attacks, Germany will get to control its pieces and collect income. And also since they are full German allies , they get the +1 modifier on adjacent neutrals. So if its that important to send all kinds of forces to crush 5 neutrals, while Germany gets to have more time than fine. Also remember USA cannot do any turn functions until activated under 1939 rules. The only thing they can do is send lend lease. They cant even change or move pieces or build.
From the discussions we’ve been having the country would get an American flag and start generating money for US.
Yes once they take the nation, its a puppet US state. If you do this in the 1939 game you will certainly lose. America cant afford to waste time sending all sorts of stuff to S America. Trust me on this. its not worth it. I got at least one guy who always tries these things thinking he found some secret to win the game. He has never won when he was allowed to do this because its a time waster.
Please correct me if I’m wrong.