Oak Street JNCLASSIFIED : COMMERCIAL TREATIES and TRADE AGREEMENTS Incident to Post-War Re- construction and Peace By FRED BROWN WHITNEY Chairman of the American Manufacturers Export Association’s Committee on Commercisi Treaties and Trade Agreements AN ADDRESS AT THE FOURTEENTH ANNUAL CONVENTION of THE AMERICAN MANUFACTURERS EXPORT ASSOCIATION NEW YORK, OCTOBER 25th, 1923 / ‘ Ty, " \ ‘ - i en oe OT ag ee iT eae Pere tren ae Gir | Vie . t ‘ ' ’ ¢ , = ae ry : i tae | c / f } t f ¢ xf } f - ‘ y 4a- » ! 4 + i. we : ! a $6 Jaw AT AX, An Com ercial Treaties and Trade Agreements Incident to Post-War Reconstruction and Peace By Frep Brown WHITNEY Chairman of the American Manufacturers Export Association's Committee on Commercial Treaties and Trade Agreements. An Address at the 14th Annual Convention, New York, Oct. 25, 1923 1. Shortly before the Treaty of Versailles, at the Ninth Convention of the American Manufacturers Export Association, your chairman of the Committee on Commercial Treaties and Trade Agreements ad- dressed the Association on COMMERCIAL TREATIES AND TRADE AGREEMENTS INCI- DENT TO WAR, PEACE, AND RECONSTRUC- TION. That address is printed on pages 191 to 215 of Perort PROBLEMS OF THE UNITED STATES, which is the title of the papers read before the Ninth Convention. A detailed review of this address is suggested to those who are particularly interested in the subjects outlined and discussed today because therein are de- tailed the international natural resources of the Globe and the proof that the United States is nearly self- sustaining while England, and Europe, except Russia, are far below par in raw materials incident to manu- factures. A grasp of the real physical conditions seems prerequisite to any decision on economic accords to preserve peace and prevent war. The veterans present will recall that your Chairman of the Committee on Commercial Treaties aud Trade Agreements twice served as Chairman of the RESO- LUTIONS COMMITTEE. Your chairman has ap- preciated and enjoyed the confidence placed in him and consequently his contacts with many members have been numerous and intimate to the degree that your Chairman feels he has a fairly clear view of the average cross section of the American manufacturer’s ‘thinking apparatus. The mutual good will and cour- tesies will not be violated in an attempt to handle some subjects that naturally involve domestic and interna- tional radical differences of opinion. Your Chairman’s hope is to impersonally, impartially, attempt to outline all sides of pending serious international questions in- dicated and then leave all members to exercise their conscience and self interest. 2. Brevity precludes a review of the members’ 1918 facts and opinions; however, it is essential to repeat the Chairman’s CONCLUSIONS based thereon. They were in part: . “Specifically what the United States will do about Treaties incident to war, peace and reconstruction, and thereafter, is a subject of the future; however, a study of the facts, figures and opinions, you have heard, may naturally lead one to believe that the substantial indications are to the general effect that the UNITED SLATES: (a) Will come out of the war one of the richest and most powerful nations in history. (b) Has no desire or design to use that power and wealth for any purposes other than beneficial to the general welfare of mankind. (c) Will not DISCRIMINATE economically or otherwise between nations that respect and observe the principle that the humblest citizens thereof possess the inalienable rights of life, liberty and the pursuit of happiness and from such citizens a government de- rives its just powers. (d) Will not propose changes in commercial rela- tions or treaties until the same have been considered scientifically by experts familiar with the economic needs of the country, the diplomatic relations between the countries involved and the character of the legisla- tion needed to meet the terms proposed. (e) Will not enter into any treaty, ALLIANCE, or confederation to give preference by regulations of commerce or revenue in order to practice DISCRIM- INATIONS, as such, between nations. (g) Will, in making commercial readjustments, seek to secure concessions especially adapted to the - United States products rather than to depend upon concessions embodied in treaties with other countries which may change their treaty relations without regard to or for the economic needs of the United States and to accomplish the foregoing, will want distinctive schedules and highly specialized classifications in order to prevent any discriminations against typical Ameri- can specialties and to eliminate the innumerable assim- ilations to other articles in which the United States has little, if any, interest, in common. (h) Will not lend itself to measures designed to enable foreign employers to pile up unreasonable profits from industry and commerce. (i WiLL SO US aise RESOURCES AS EOPLRY 1 O PRESERVE THe STANDARD. OF LIVING OF THE AMERICAN WORKMEN. Such were the outline views of the average Ameri- can manufacturer in 1918 when your chairman at- tempted to generalize the serious conclusions of the men most interested in the foreign trade of the United States. { 3. Some seem to feel that foreign propaganda has made attempts to secure from the United States propo- sitions incompatible with these principles which the average American manufacturer in 1918 felt essential to reconstruction and peace after the World War. Perhaps alien statesmen and diplomats, especially of the decadent royalist types, and their American well- wishers, might have saved their meat, manners, and propaganda money, if they had grasped the full mean- ing of what the American export manufacturers out- lined for the guidance of the United States in our for- eign business relations. [3] Americans naturally lean towards Republics abroad and will hardly volunteer aid to those who would re- store autocracy in Germany and Russia; however, those who are attempting other forms of government might well weigh the principles outlined by the export manufacturers if they desire to expedite recognition by the United States Government. 4. CURRENT STATUS OF COMMERCIAL TREATY DEVELOPMENTS. (a) Secretary of State Hughes is the authority for the claim that the relations between the United States and the South American countries were never more satisfactory or carried better promise of mutual good will. There are no controversies with any of our sister Republics which have not been settled or are in the process of adjustment. An accord with Colombia has been perfected. Diplomatic relations are now established with Mex- ico and our exporters expect to gain thereby. (b) The United States in making an independent Peace with Germany reserved all the commercial and trade rights granted by the Treaty of Versailles to others. Our strictly technical trade rights were covered by the ancient treaty of commerce which dated back to 1799 and 1828. War suspended the treaty. Peace legally revived it technically; however, the United States denounced it and no substitute has been per- fected. On October 10, 1923, the Associated Press reported that negotiations of a treaty of amity and commerce with Germany will be undertaken on the return to Washington of the German Ambassador. There have been preliminary exchanges of views. (c) Spain is reported to have concluded new treaties with France and with Great Britain, giving commercial advantages which the United States does not possess, except under the most favored nation clause. It is reported that the United States plans a new commercial treaty with Spain and also with the coun- tries which were formerly Austria-Hungary. (d) Preferential tariff rates granted by Belgium to France under a recent commercial treaty are ex- tended automatically to similar American goods under the 1875 convention. The major items are: automo- biles, rubber products, typewriters, sewing machines, leather goods, and some classes of machinery. (e) The British, French and Spanish experts on Tangiers have reported a plan for a nominal recogni- ion of the Sultan’s sovereignty but actual administra- tion by an international body. It is not reported what the United States status will be in Tangiers. (f) It is claimed that Soviet Russia is now trading considerably with the United States but routing the trade financially through England and Germany. Rus- sia wants more direct contacts. Senator McKellar leads one group which favors a trade pact with Russia PROVIDED Russia guarantees that her trade representatives will not conduct agitation against our sort of government and our institutions. Congressman Britten reported after an interview with the Russian trade commissioner that the Russian claims that President Harding’s speech at San Fran- cisco closed the door to further hopes for a meeting of the countries on a commercial treaty. The Congressman says that the Russian _ official claims that new Russia could not be responsible for debts of the former Russia and that there is NO inten- tion to pay back to the United States the millions loaned during the war. This Congressman leads a group that opposes trade agreements with Russia. The current reports are that Russia and France are nego- tiating a trade agrement predicated upon Russia’s recognition of pre-war financial obligations to France. The attitude of our Secretary of State on Russia is a well known matter of public record. g. The European habit of providing governmental influence and power for the exploitation by private capitalists of the resources of various countries means an aggressive diplomacy which seems to often create disappointment among Americans whose principles call simply for equality of treatment and the so called open- door in commerce. The United States does not seek preferential treatment in the Western Hemisphere when commercial questions are involved. Wherever Great Britain is dominant, the United States seems to have a hard time arguing for equality of treatment. The protracted dispute over equal oil rights in the Near-East seemed to reveal Americans opposed by Great Britain. Even the Dutch company appeared to be influenced by British interests against American interests. The British Government is a dominating stockholder in an oil company. It may take a long time to’ put the tentative treaties through the diplomatic and legislative machinery but the subjects are quite serious and worthy of time and sustained effort to protect American interests abroad. 5. Acurrent report is that the LEAGUE OF NA- TIONS’ ECONOMIC SECTION has finished a PROTOCOL ON COMMERCIAL ARBITRA- TION. All ratifying countries will obligate themselves to: A. Enforce decisions made in their own districts. B. Proceed in arbitration in conformity with the law of the country where arbitration takes place and in accordance with the contract provisions. C. Recognize the validity of all agreements to sub- mit existing disputes between subjects of the signa- tory countries to arbitration or clauses in contracts re- ferring potential controversies to future arbitration. D. Transfer to arbitration all cases where it shall appear in Court that the contract provides for such arbitration. Great Britain is expected to lead in the ratification of the protocol. Awards made in other countries are not covered. Nationals of the signatory countries may avoid foreign litigation by inserting arbitration clauses in all contracts between such nationals. 6. The United States has arbitration treaties with at least 19 countries. é 7. There is now pending arbitration between the [4] saa ———oOoS°00—0>0R0>—0—@0—005055 United States and Great Britain on numerous pecuni- ary cases, under the treaty of 1910. The World War interrupted the arbitration. Some of the claims grew out of occurrences during the Spanish-American war and in the South African war in 1899. One goes back to the war of 1812. _Numerous controversies arose during peace and in- volve personal and property rights of the nationals of the two countries. One naturally wonders whether the arbitration un- der the League of Nations protocol will be speedier than current forms, which apparently give the heirs of the original claimant the major interest in any award during one or two generations after the incident from which the claim arose. 8. Nationals of all countries are principally inter- ested in treaties, agreements and accords of a general public nature. International obligations which involve debts, war, peace and ECONOMIC ACCORDS to preserve peace concern manufacturers, especially those who export any great part of their production. . meetay SECRETARY OF STATE HUGHES in his recent Canadian address started in part, “ I BE- Peover LHAT WE SHALL: BE ABLE AT NO DISTANT DATE TO KEEP WITHIN REASON- ABLE BOUNDS SOME OF THE PRESSING ECONOMIC RIVALRIES BY FAIR INTERNA- TIONAL AGREEMENTS IN WHICH SELF-IN- TEREST WILL SUBMIT TO MUTUAL RE- fc lONS IN THE: FURTHERANCE: OF FRIENDLY ACCORD.” This land-mark in American diplomacy naturally created immediately a sustained interest on the part of American manufacturers, especially exporters, who are most vitally and directly involved in international restrictions on the economic intercourse between na- tions. Your Chairman feels that no confidence is violated when he states that he believes that the average Ameri- can export manufacturer is quite sympathetic in PRINCIPLE towards Mr. Hughes’ economic accord feeler and might favor and foster such accords PRO- VIDED, in practice, the same do not involve the ma- terial lowering of the American tariff or the fixing, in- ternationally, of tariffs and the settlement of tariff disputes by the WORLD COURT of the League of Nations. None should interpret that statement to the effect that the average American export manufacturer is not in favor of a tribunal to decide international differ- ences. In 1917 our Association voted for such a tribunal after a referendum questionnaire was sub- mitted to some 700 members. No member has ex- pressed a change of views to your Chairman, who then was Chairman of the Resolutions Committee. The economic accord announcement of our Secre- tary of State naturally caused an inventory of the foreign conditions which may help or hinder the suc- cess of the economic accord movement. (b) A. Emil Davies of the London County Council in a recent American address on “THE ECO- NOMICS OF INTERNATIONALISM,” stated, “Unless a SPECIAL economic department of IN- TERNATIONALISM operates to substitute a better plan for the present supply and demand theory of ne- cessary foodstuffs, England and all Europe WILL BE PAWNED TO AMERICA.” (c) At the INSTITUTE OF POLITICS at Wil- liamstown this SUMMER, Mr. Culberson was cred- ited with the proposal that tariffs be fixed interna- tionally and that the World Court should decide dis- putes under such fixing. (d) A Minneapolis banker proposes to cancel the American war loans in exchange for the abolition of European tariff walls; however, our principal debtor long since concluded an honorable debt payment agree- ment with the United States and now seems to be en- tertaining propositions somewhat incompatible with the general principles of the suggestions of Mr. Hughes, a Minneapolis banker, and Mr. Culberson. (e) Reference is made to the ECONOMIC CON- FERENCE OF.THE BRITISH PREMIERS. Imperial preference seemed to be the watchword of that conference. Californians noted the strong support for the pro- posal to admit Dominion dried fruit free and impose a 10% duty on California products. The Dominion Premiers were reported as urging tariffs on NON-EMPIRE WHEAT, maize and meat. The preference enjoyed by colonial sugar and TO- BACCO may be increased and lower duties be pro- vided by the dominions for British manufactures. The October 10 cables were to the general effect that the conference was considering a purchasing POOL for empire food and raw materials and a dis- tribution plan for Great Britain. The Chancellor of the Exchequer stated that since 1919 the policy has been to give preference to the colonies and dominions in public contracts and that such a policy would be continued. Mr. Chamberlain reported that the air board last year bought no foreign supplies and the navy none ex- cept 1% of the fuel oil. The war office bought from abroad only specialties and foodstuffs unobtainable in the Empire. OBJECTIONS WERE RECORDED against the purchase of PUMPS by a colony from AN AMERI- CAN BRANCH FACTORY in the Empire and assur- ances were recorded for non-repetition. The First Lord of the Admiralty reported an at- tempt to induce the British sailors to smoke Empire tobacco in place of VIRGINIAN. The President of the Board of Trade announced the Government’s readiness to guarantee the capitai ~~ and interest on public utility work in the crown colo- nies that used British products. The Australian Premier demanded preferential tariffs and a policy of retaliation. Your recollection is directed to the British CREDITS ACT to help flax, cotton, woolen, worsted yarns and manufactures. The British Facilities Act provides a quarter of a bil- lion dollars to foster British industry. The Safe-Guarding of Industries Act to license im- ports and tax imports is well known in America and so is the Stevenson Act or the control of rubber exports. [5] » The American oil interests appreciate fully what it means to have the British Government in direct control of the ANGLO-PERSIAN OIL CO. One must recall that the current Premier of Great Britain, when President of the Board of Trade in- sisted that the proper British policy is the intensive development of new markets to take the place of those destroyed or diminished by the war. His survey indi- cated that the promising fields were the Empire, the Orient and South America. As Your Chairman speaks today all England is awaiting the economic declarations of Premier Bald- win. The forecasts claim that the British Premier will tell the Premiers of the British Empire that England proposes all round PROTECTION of British industries by a scientific tariff. It is claimed that imported manufactures will be taxed and the pro- ceeds used to subsidize dominion and colonial pro- duction of COTTON, WHEAT, and MEAT. American farmers are given something to think about and American exporters who favor economic accords or even free trade will watch with keen inter- est whether Baldwin is to continue in power or be re- lieved by others, among them, the Liberal Party Leader, H. H. Asquith, who once stated: “THE ONLY HOPE FOR RECONSTRUCTION AND REBIRTH FOLLOWING THE WAR LIES IN THE DEGREE TO WHICH THE NATIONS OF THE WORLD AGREE TO APPROXIMATE UNIVERSAL FREE TRADE.” (f) The U. S. Commerce Reports, No. 150, state that in some instances Germany has had an actual in- crease in exports of HIGHLY manufactured goods over pre-war figures. The press reports indicate that Europe is under- selling American manufactures in laces and em- broideries in spite of a 90% tariff. It is claimed that Belgium textile mills for the current year are using 60% Indian and 40% Ameri- can cotton. It is claimed that European manufacturers, assisted by their Governments, are actively pursuing a policy of seeking markets other than the United States for raw materials. A Chicago newspaper says that no tariff wall will be adequate to protect American manufacturers in the face of industrial cooperation and expansion expected in Continental Europe and that a revival of the American valuation idea is anticipated. (g) At an hour when such statements are being made, Mr. Culberson and Mr. Asquith appear to find sympathy in America. The Chairman of the Democratic Party claims that “the Republicans can give the farmers much early aid by convening Congress and effecting a prompt RE- DUCTION OF EXISTING PROFITEERING TARIFF RATES and by offering some moral and economic cooperation to stabilize and UNFETTER international trade so that 250,000,000 underfed people in Europe can purchase our surplus foodstuffs an re PRICES fixed by the law of supply and emand.” The great international banker, THOMAS W. LAMONT, at Chicago, recently, was reported as say- ing, “ WHY has the Continent BUMPER CROPS this year? The answer in part is because of the re- covery from the devastation of war, but also in a large part because our latest TARIFF laws put such a barrier against FOREIGN MANUFACTURERS that speaking generally, the people abroad are unable to sell goods here to the extent that they might other- wise and so to establish as large credits as might be possible to purchase our grains. If we had not favored the idea of doing all the selling and none of the buying, our farmers and our MANUFAC- TURERS, who are dependent for their prosperity | upon the farmers’ demand might have been better off.” One editor asked for an explanation on how the American farmer is to get a TOP PRICE in Europe against the competition of Europe’s own bumper crops, which were so amply described by the Democratic financier, whose house fathers The In- ternational Harvester Co., which has just reported marked development in its business. The current cable reports are that the British financiers have formed with the Russians a powerful concern to export Russian wheat. (h) The Republican side and opposition to the Asquith theory is found perhaps in the recent state- ment of the Chairman of the Republican National Committee, who claimed that “ World competition never has been so keen as it is today. The only safe- guard against this menace to AMERICAN MANU- FACTURERS is PROTECTION in the form of tariff duties. There is no doubt that our industries would be prostrate and the nation in the midst of HARD TIMES were it not for the FORDNEY- McCUMBER tariff law.” The NATIONAL REPUBLICAN recently stated, “THE DRIVE to. sacrifice the PROSPERITY and security of America in behalf of Europe continues. European propagandists are trying to control the pulpit, the schoolroom, publications, labor organiza- tions and women’s clubs.” (1) One phase of the doctrine of economic accord developed during the war, when the Allies at Paris on June 14-17, 1916, declared themselves agreed to conserve during the whole period of commercial, in- dustrial, agricultural and maritime reconstruction their natural resources for the Allied countries before ALL OTHERS and for this purpose to establish SPECIAL arrangements to facilitate the interchange of these re- sources. The United States was not a party to the conference and so stood in the all others class; how- ever, the project never seemed to amount to much after the war; hence, history provides no great assur- ance for even this limited form of an economic ac- cord or alliance. (j) Shortly after this Paris conference, the American Manufacturers’ Export Association, re- solved, that it hoped the armed conflict in Europe would not be followed by an economic war that would place arbitary restrictions on international commerce and industry, and the export manufacturers believed [6] that in the formulation of commercial treaties, the United States should insist upon a due regard for our rights and our opportunities, thus assuring to our com- mercial and financial interests full protection abroad. On October 10, 1917, the Association endorsed especially that part of President Wilson’s answer to the Pope which states, “ Punitive damages, the dis- memberment of empires, the establishment of SELF- ISH and exclusive ECONOMIC leagues, we deem inexpedient and in the end worse than futile, no proper basis for a Peace of any kind, least of all an EN- DURING PEACE.” (k) The United States Chamber of Commerce favored economic war under certain conditions, but the A.M.E.A., the Philadelphia Board of Trade and _the National Association of Manufacturers’, took a position, that an economic boycott would be an un- warranted interference in matters of international relations. The Merchants Association of New York, went on record against economic pressure to regulate war. : Your Chairman’s investigations lead him to the im- pression that Mr. Hughes’ economic accord proposi- tion to influence war conditions and peace can com- mand practical support among American manufac- turers and merchants, even those who are critical about keeping private business affairs far from the influence or control of domestic and international politicians, statesmen and diplomats, PROVIDING, the detail plans developed under the principle outlined do not violate the recorded views of the American Manu- facturers’ Export Association, the members of which are probably more concerned than any other great group of American voters. 9. INTERNATIONAL DEBTS AND REPARA- TIONS. At the annual convention of the American Bankers’ Association, on September 24, 1923, FRED L. KENT, vice-president of the Bankers’ Trust Co., of New York, made a memorable address entitled “ ACROSS THE ATLANTIC.” It appears to be a master-piece of the propaganda for debt cancellation. Probably many manufacturers have read the full text or the bankers’ resolutions based thereon. Mr. Kent claimed that the flame of race hatreds in many countries have been gradually dying down as the fact is being recognized that the Nations are dependent upon each other to such an extent that IT IS TO THE INTEREST OF EACH TO MAKE RECIPROCAL TREATIES WHICH WILL REDUCE OR REMOVE TRADE BAR- RIERS. Mr. Kent claimed that actually the American peo- ple have no desire to isolate themselves. This banker would have the Germans work hours longer than eight to create an exportable balance of MANUFACTURES from which to secure funds in neutral markets to pay off reparations, etc. He seems to believe that if the creditor nations trade off 60 to 70% of the war loans for agreements to establish peaceful and sound economic conditions in Europe, world trade and commerce might easily revive to such an extent that the monetary return would far exceed the total cancelled loans over a comparatively short time. Banker Kent intimates that Secretary of State Hughes, being a member of the Refunding Com- mission, might develop proper agreements by means of treaties. For this reason, your Chairman has taken note of the debt situation which might develop into a treaty subject. The bankers resolved that it is their belief that if the United States does not recognize and accept responsibilities in connection with the reparations ques- tions which are preventing our Allies and Germany from coming to an agreement that will reestablish peaceful conditions in Europe that both our foreign and domestic trade will continue to suffer seriously. The bankers recommended that the Debt Refunding Commission immediately enter into negotiations with Great Britain and France, in connection with SUCH PART OF THE REPARATION question as may be included in the INTERALLIED INDEBTED- NESS in order that the Commission may be in a position to make such recommendations to Congress as it may consider desirable and to the INTEREST OF THE UNITED STATES: It is hoped that Mr. Kent’s views and the bankers’ resolutions have been fairly reviewed. (b) In 1918, your Chairman in referring to the probable American attitude of the United States af the treaty conference, stated, “ Materials, money and men, the United States has lost, not gained. No suck gains are expected, wanted or needed.” The United States asked for nothing other than Peace and got less than nothing from Germany or France. Under such circumstances, some feel that Mr. Kent and his followers among the American bankers have erected a debt cancellation structure upon quick-sand. No false premise can lead to the conclusion that Ameri- cans have side-stepped responsibilities in Europe where thousands of dead Americans are an enduring evidence that America is not found wanting whenever freedom is imperiled. The bankers have based their serious recommenda- tions upon what they believe to be facts; hence, others must verify such facts or find the real situation. An inquiry shows that: FIRST. Senator McKellar, upon his recent return from Europe, stated, ‘““ FRANCE is amply able to pay interest on her three billion dollar American debt, and the foreign debt commission should urge an immediate settlement.” SECOND. Senator McKinley, returned from Europe, with the advice that Germany could pay a reasonable amount in reparations if the Allies could agree upon the sum. THIRD. The Democratic leader, Senator Robin- son, upon his return from Europe, stated that the United States intervention in the general European situation would result only in more confusion. FOURTH.. Congressman Burton, of the Debt Re- funding Commission, after a trip abroad, on October 16th, conferred with President Coolidge, and gave out an interview to the effect that the United States has [7] YN every right to expect a settlement of the debts on an honorable basis. He hardly thinks the economic con- ditions can become good abroad under PREVAILING POLITICAL CONDITIONS. He intimated that the French policy in Europe seems to be dominated by a desire to DISMEMBER GERMANY and obtain a stranglehold on the IRON AND STEEL industry of the Ruhr, rather than by the hope of collecting reparations. FIFTH. Senator Smooth is credited by the press as unfavorable to any debt cancellation. SIXTH. Newspapers with millions of circulation in the East, South, North and West editorially com- mented upon the bankers’ debt cancellation talks and resolutions, in part, as follows: (a) “Congress is asked to abandon ISOLATION policies and CANCEL the Allied debts FOR THE BENEFIT, OF THE EUROPEAN BOND MARKET. Singularly no emphasis is placed upon the fact that WALL STREET in the past four years has pur- chased more than a billion of foreign securities. A set of. sentiments which manifestly delight farm blocs, progressives and taxpayers generally. None are so blind as those who will not see beyond their SELFISH INTERES Sa: “The Allies want our dollars, not sense, as MR. POINCARE and associates have shown after each offer to mediate the reparations tangle. LOOK TO YOUR LIBERTY BONDS. Financiers, owning tons of foreign securities here and abroad, approve, of course, the cancellation of outstanding entente loans. A twelve billion dollar GIFT to governments whose pressing bonds are so heavily held hereabout would mean a KILLING for WALL STREET and enor- mously enhance the fortunes of investment houses with huge blocks of DEPRECIATED allied paper—mostly bought on the bargain counter. Much of the money thus taken from the taxpayers pockets would go straight into theirs together with the margin between present values OF LIBERTIES AND VICTORIES which would immediately drop several points as a result of our philanthropic action— a depression certain to be profitably anticipated by such fiscal experts. A neat way to drop two birds with one stone.” (b). A Middle West editorial remarked on the bankers’ resolutions: “A Chicago Democratic organ urges Americans to render service to Europe by buying Germany’s bonds to pay off the Allies. Once bit twice shy means nothing to this journal. Germany flooded the United States with nearly a billion dollars worth of paper marks, which were afterwards inflated to the VANISHING POINT, thus deadbeating innumerable innocent help- less American investors, who probably followed some pro-Europe banker’s advice. WHY BUY GERMAN BONDS AND REPEAT such an incident.” (c) Another Western paper stated editorially, “The American people are not without effective means to CALL A HALT on the European frameup and anti-American propaganda. 26,000,000 Americans have entrusted seventeen billion dollars to the savings banks, while a quarter of our population have on de- posit in the United States banks about thirty-seven billion dollars. Without these trust funds, the pro- Europe American bankers are helpless to play their game abroad. A DEPOSITORS’ BOYCOTT on all banks that attempt to invest one dollar of these trust funds in German shin-plasters even with the ALLIES’ EN- DORSEMENT, will materially relieve the American bankers of the self-imposed task of correcting false impressions about economic disasters because such pa- per calamities will no longer lurk about the United States. (d) Politicians seldom ignore the CHICAGO TRIBUNE, which remarks: “Let President Coolidge bring pressure to bear upon these hot-headed and grasping European nations to arrange the funding of their debts to us.) THEY ARE DEBTS OF HONOR. They MUST be EVENTUALLY PAID or national credit will be ruined. We would use the money constructively—not for war.” (e) At the Institute of Politics at Williamstown this Summer, Canon Earnest Dimnet of Paris was credited with the claim that the United States MUST CANCEL the ALLIED DEBTS as a CONDITION PRECEDENT to participation in European affairs. His belief was that there is no other solution of the German problem than floating a loan in the United States. He said France believed that this should be done. (f) The current cable news is that the POIN- CARE GOVERNMENT is still ready to seek a general settlement with the Allies on the basis outlined in the January plan and subsequent French “ yellow book,” namely PARALLEL REDUCTION of the German debt and the war debt of the Allies, but FRANCE is tired of reiterating unheeded the pro- posals and if there is to be further initiative it must come from Great Britain or the United States. Other- wise it is clearly the intention of the French Govern- ment to make no further mention of the possibility of general negotiations and to devote its efforts solely to the exploitation of the occupied territories for the benefit of the reparations account.” (g) Your Chairman listened to LLOYD GEORGE’S plea at Chicago for the acceptance of HUGHES’ plan for the determination of the ability of Germany to pay some sum certain for reparations. The former British PREMIER suggested that failure by Germany to pay whatever might be determined under the Hughes’ plan, should be followed by a UNITED MARCH on Germany; apparently he means that the United States should send its army and navy to collect reparations for France and Engiand. This remarkable Britisher admitted that “ During the war, whenever we wanted to know something about America, they said to us, ‘Well, it depends upon the Middle West.’ ” [8] If THE CHICAGO TRIBUNE is a fair average of Middle West public opinion, Lloyd George’s be- lated plea for the HUGHES’ plan, supplemented with the suggestion of force to collect money from Ger- many, is FUTILE. The Chicago Tribune says, “We cannot be the armed policeman of Europe. We have been discarded as an adviser in Europe. We have been ignored as an example. WE.CANNOT BE A FOOLISH BANKER FOR EUROPE. We might embroil and impoverish ourselves with no consequences except to our Own hurt. WE MIGHT LOSE THE PEACE ON THIS CONTINENT WITHOUT GAIN- ING TT PFOR THE OTHER.” (h) You have heard considerable opinion from bankers and journalists, and now you may listen to ~ pointed remarks to your Chairman by members of the Association. One of the most experienced and prominent manu- facturers in America informed your Chairman that— “The international bankers have an extensive knowl- edge of international finance, but they are not IN- FALLIBLE. As a matter of fact some of them are positively opposed to_cancelling these debts. But, looking back over the last eight years, the forecasts of the international financiers have been wrong more often than right. During that period I have sold British exchange above par and at other times over 30% below par. During that period I have sold ex- change on many neutral countries which were not con- cerned in the war at substantially above par and at other times very much below par. The advocates of cancellation may impress those who have given the question of international commerce little thought or study, except perhaps during the last few years, but they will not impress many of those who have been doing EXPORT BUSINESS FOR A SCORE OR MORE YEARS. A great many forget that a very considerable portion of this money was loaned by the United States to the European countries after the signing of the Armistice. I believe that the people of this country were reconciled to that loan by false propaganda carried on while the Peace Commission was sitting in Paris, scaring our people into the belief that if we did not help Europe out the BOLSHEVIKS would get Europe and then get us. I was in Europe during several months of that period and know that accounts sent across by the American newspaper corre- spondents were grossly colored. A rigid censorship was maintained and a correspondent who did not send scary stuff could not send any. We did right in going into the war, but we did it because it was necessary to clean up a bad mess which was the result partly of national vanity and partly the OVER-POPULATION of Europe. Cancelling these debts will not, in my opinion, hasten returning to normal. In three years Europe has made more progress towards recovery than she did in thirty years following the NAPOLEONIC WARS. If these debts had been cancelled when the idea was first advanced, I do not believe that Europe would have made as much progress as she has during three years. EUROPEANS MUST AND WILL BUY FROM US UTTERLY REGARDLESS OF OUR EXER- CISE OF FURTHER ALTRUISM. The argument that if the debt account stands and the interest is paid regularly exchange will be so demoralized that we can- not export to Europe is also fallacious. France is not concerned for fear that she cannot export to Germany if Germany pays the indemnity and Germany has been one of the best markets for France. In France and Italy there is no gratitude towards us on the part of the general public and many of the lead- ing men. They fail to recognize that it was not our war, that France had a great deal to do with bringing it on—that it was their quarrel, not ours, and that we came in and saved them. France even has no sincere gratitude to England for SAVING HER LIFE, much less for Italy or Russia. I have found when talking with Englishmen and Frenchmen that they first argued tnat we ought to cancel the debt, because it was a war of common in- terest, which I was not prepared to fully admit and which idea they did not press when the major facts leading up to the war were stated to them. They generally fall back on the theory that we should be A GOOD FELLOW and cancel the debt any way. Then, when I suggest that it might be a good idea for them to start the movement of being a good fellow and turn over to us some of their islands in the Carib- bean Sea in partial payment of the debt, they imme- diately want to change the subject. The principal value of these islands are iu case of war. They are not revenue producers. Their main value to France and England is to hav: a gun pointed at our ditch across the Isthmus as a factor in diplomatic negotiation and in war, if we ever have trouble with them.” (1) IRVING T. BUSH, President of the New York State Chamber of Commerce, upon his return from Europe, stated much that is of special interest to American manufacturers and in part, as follows: “ Stabilized conditions will stimulate MANUFAC- TURING in Europe and more commodities will be produced to COMPETE with us in the markets of the World. If we keep our eyes on our own markets and treat as welcome additions any orders we may re- ceive from Europe, we will be on solid ground, for conditions in this country are sound.” (j) Judge Gary recently stated, “We should all | remember that the United States is a very big coun- try and VERY RICH and on the average PROS- PEROUS:. (k) President Hibben, of Princeton, returned from Europe recently and stated, “ Germany is not starving, but is prosperous; the people including the working classes are flocking to restaurants and cafés and have plenty of food and beer.” The last item may make some Americans feel that Germany sits on top of the World. The college economist claimed that he did not —oooaama=eeea=qeo=®oa=eaeeeeeeee ——————————LLLL nanan [9] Ss ‘ —— find any evidence of poverty or unusual distress in Germany. (1) President Julius Barnes of the United States Chamber of Commerce was recently credited with the press statement that the United States during the last few months established TEN PRODUCTION REC- ORDS, as follows. THE LARGEST produc- tion of pig iron, ingot, crude oil, autoniobile and truck, locomotives, cotton consumption, and the largest volume of mail order sales, retail sales and car load- ings. Since 1913 our annual income has increased from thirty-four to fifty billion dollars and the aggre- gate savings deposits have increased from six billion to fourteen billion dollars. Even under such circumstances Banker George Reynolds of Chicago claims that money cannot help Europe at this stage of the game, and that we need the money here. The President of the largest bank in America has this for American manufacturers. “ Our leading lines of manufacture have been surpassing the records of war time production. In the past five years we have been gradually breaking away from ECONOMIC DEPENDENCE upon the outside world. The oppor- tunities for trade outside of the DISTURBED AREAS of Europe are so great that our dependence upon the latter is comparatively slight and yet business with those disturbed areas continues moderate in volume. We take from them little that is essential to us, but what they take from us is VITAL TO THEM. If we look for the explanation of-the wonderful American demonstration of inherent strength and recuperative powers of the United States, we will find at least 90% within our own borders. I am not afraid of the ability of this country to compete in the long run and to secure an ample share of world trade, PROVIDED, we NOW recognize that COMPETITION is coming and that it is going to be vigorous and that to meet it, we must loosen every restraint to American industrial development to the end that in this country there may be AN EFFI- CIENCY which will overcome a HIGHER STAND- ARD OF LIVING and still make us able to do busi- ness on the world’s price level.” (m) The wages in the United States are far above the European levels on a purchasing power basis. The British Ministry of Labor collected figures on the amount of food that can be purchased with 48 hours of labor and reduced the same to an index figure of 100; the results are: New York, 217; Ottawa, 180; Amsterdam, 103; Christiania, 92; Stockholm, 87; Warsaw, 85; Brussels, 70; Paris, 68; Prague, 67; Ma- drid, 61; Berlin, 57; and Vienna, 55. (n) It might not be unkind to suggest to the debt cancellationists that it may be difficult to prove to AMERICAN LABOR how its percentage of 217 can be greatly improved by debt cancellation. Mr. Kent’s _ major premises at least seem questioned by the facts and opinions you have listened to. (0) Your Chairman’s contacts with many members of the Association lead him to the belief that the aver- age American export manufacturer does not think that a remission of our foreign debt would be detrimental to American exports; however, there is no indication that 10% would favor the cancellation of the debts; yet, the majority would grant proper debt concessions to facilitate ultimate and definite payment. The average American export manufacturer would not advise American bankers to loan money to finance German-Allies factories; however, no objections would be recorded to private loans based upon the ordinary business considerations of individual cases that merit accommodation. The average American export manufacturer is will- ing to join in international accords to avoid war: how- ever, he does not appear anxious to BUY PEACE from France for Europe, in the event Premier Poin- care’s terms of exploitation of Germany for repara- tions are unalterable if the United States does not con- cur in the proposition of a cancellation of the inter- allied debts in order that the German reparations to France may be reduced by the amounts cancelled by the United States. There is no evidence that the United States will entertain the idea of paying Ger- many’s reparations to France in any form. There is also little evidence that the average ex- porter objects to French attempts to collect for French account from Germany ; however, your Chairman fails to find signs that the United States will join England in any movement to publicly influence France or MARCH ON BERLIN to collect reparations for France. Lloyd George made an eloquent appeal for a union between America and Great Britain for the man- ifest purpose of influencing France ; however, the reac- tion does not seem favorable and the American Legion even declined to vote for the entry of the United States into the World Court but its heads have found no fault with French occupation of the Ruhr. Nevertheless the average World War veteran usually tells you, NEVER AGAIN WILL THE UNITED STATES FIGHT FOR EUROPE. Germany does not appear sincere in promises of reparations and experienced Americans abroad seem to feel that Germany has not the least intention of pay- ing France what France wants and expects; perhaps, France can get blood out of the German stone at an hour when Lloyd George admits England knows she cannot get much reparations ; however, France is play- ing a lone hand, as is evidenced by the attitude of the current administration in the United States and Eng- land. Technical Status of Foreign Loans Debt settlements have been made with Great Britain and Finland and little progress appears of record in regard to others, who owe an aggregate prin- cipal amount of $5,970,117,427 and accrued unpaid in- terest of $1,088,457,470, or in all to date the indebted- ness appears to be $7,058,574,897. eee —_— a OOO [10] Vy, Specifically the amounts owed by each are: Seite: eae Ras ah aka $14,263,096 OM ek oe cake ais iy. ou. eos lke 27,004,065 DEMS fares «Sunt 5 fee 445,782,734 meceno- siovakia .......-.%5. 109,423,344 MINS Ped hs ecta scree oes 16,788,728 BERCEIN IS cola cvs ses 6 3,917,325,9074 0 a i ee 16,125,000 So a eee ee 1,989,286 ORM Gee dag ae ace», ais ece4' 3,0 1,973,879,133 MU crear wie soe wie o's 6,032,478 MRAM ee ccvace act soos oe 30,108 2 Se ae re 5,977,953 | Se 181,839,315 oS a 43,218,878 6 Ee re 237,242,054 i a a 60,992,592 Secretary Mellon granted Austria a twenty year postponement for payment. The commission has not been in touch with Ar- menia, Greece, Liberia, or Russia. France sent a representative to negotiate and he re- turned to confer with his Government and no further proposals have been received since. It is claimed that the commission HOPES to obtain further adjustments at the earliest possible date. _ In reference to the argument that the United States should aid France in collecting reparations from Ger- many, one of the Governors of our States says “ THE meee OestALES SHOULD NOT BE A COL- LECTING AGENCY. THERE IS NO MORE RIGHT OF A NATION TO ENFORCE PE- CUNIARY CLAIMS IN BEHALF OF THE NA- TIONALS THROUGH ARMIES AND NAVIES fee ue RE IS TO CALL OUT THE NA- TIONAL GUARD OR THE REGULAR ARMY TO ENFORCE COLLECTION OF A MORT- GAGEE’S NOTE AGAINST ANOTHER CITI- ZEN.” Republican Administration’s Attitude on Debts 10. The White House intimations of October 5th, 1923, were that President Coolidge is strongly opposed to any proposal from whatever source looking to. the cancellation of the debt that the European Powers owe to the United States. It was reported that our President does not contem- plate any departure from the requirements laid down by Congress in the debt refunding act as to how the obligations should be handled. This act does not con- template any discriminations between debtors. The dif- ference between the war loan rates of interest and the interest conceded to the British in the settlement over the period of years of payment would mount to a sum eyual to the British capital indebtedness to the United States at the time of refunding. This aspect of the situation is reported as going far enough to meet the demands of the cancellationists here and abroad. The press has recently reported President Coolidge as unfavorable to any conferences abroad, economic or political; consequently France and England appear to be left to their own devices to handle Germany as they will. Of course there will be a big drive to influence the Republican Administration to accept Lloyd George’s proposition for the United States and Great Britain to join forces and fix the reparations matters regard- less of France; however, such propaganda must dis- count the attitude of the Middle West opinion which seems to be recorded by the Chicago Tribune editorial you heard and by its news item, as follows. Its Lon- don correspondent cabled an inventory of the serious problems the United States would be plunged into if it accepted Lloyd George’s plan for an unwritten treaty for united action between the United States and Great Britain. Some of the problems are: Reparations and the Ruhr, League of Nations, Tangier, Unrest in In- dia, Constantinople and the freedom of the Dar- danelles, Asiatic complications including the misunder- standing and estrangement of Japan, obscure bicker- ings and intrigues of ambassadors’ council in connec- tion with the settlement of numerous disputes between your European nations born of the war. Alone Great Britain cannot impose her will on the less tractable nations. Allied with America, however, England would possess the authority to impose her will on other nations to their discontent and resent- ment and probably would involve America in so doing. Temporary tranquillity might be restored in Europe but the enduring hatred of the nations whose policies are thwarted would be obtained. Hatred usually leads _ to trouble and the United States would not be neutral. IN CONCLUSION, may your Chairman state that he lived many years abroad prior to the World War and believed he understood something of the human nature of Europeans; however, conditions have so changed abroad, that your Chairman dares not venture personal recommendations for the remedy of European conditions that puzzle many. Our Secretary of State has proposed a great propo- sition of economic accords which in principle meets naturally with wide approval. It is evident that our public officials are thinking long and hard and it is suggested that they should have our sympathetic sup- port in whatever they determine is tu the best interest of all Americans. The currents are many and cross Lut our Government has knowledge superior to that of the average citizen; hence, it might be well for ex porters to watch with intelligent interest all the Gov- ernment intimations and quietly advise our officials in all cases where members feel it is to the interest of our fellow citizens. Your Chairman trusts that he has been able to make the members more fully appreciate the serious prob- lems that confront our public officials in their admin- istration of our foreign relations and that the net re- sult may be intelligent cooperation and support for those in authority in order that the paramount inter- ests of all Americans may be better served in relation to our international commercial and industrial affairs. [11] . The Resolutions Adopted at Fourteenth Annual Convention — = AMERICAN MANUFACTURERS EXPORT ASSOCIATION The following resolutions recommended by the Resolutions Committee, consisting of Fred B. Whitney as*Chairman, Frank H. Taylor, Julius Goslin, Charles W. Beaver and A. E. Ash- burner, were adopted by the Convention, October 26, 1923. “The American Manufacturers’ Export Association, assembled in the Fourteenth Annual Convention, hereby resolves as follows: “tT. It reciprocates the message of good will and in- terest of President Coolidge, whose official acts, words and exhibited integrity of purpose have so commanded the universal respect and united support of the Nation that the American Manufacturers’ Export Association finds itself justified in recording a pledge of intelligent cooperation with the President of the United States in his conduct of the foreign relations of our country, “2. It thanks its retiring President, Myron W. Robin- son, whose devotion to duty has resulted in a record of unprecedented success for the Association and it pledges its support to President-elect W. W. Nichols, whose many years of unstinted toil for the Association is a token of the ability that will lead the Assocation on its path of progress in the promotion of the export affairs of the United States. “3. It records with sincere thanks the service rendered by its officials, committees, speakers and delegates, the press and the National Foreign Trade Council, all of whom have made the Convention an unprecedented suc- cess at an hour when the foreign trade affairs of the Na- tion attract the attention of the world. “4. It believes that its pioneering in the promotion and protection of the export affairs of the United States has resulted in an American export trade conscience and a ME 16 public recognition ot the tact that the volume of the ~~ exports of the Nation largely determines the margin of - stimulating profits for our banks and factories and the high standard of living of the American artisans. The y foundation for the permanent establishment of our ex- port trade was tested by the trade depression of 1921. At this Convention it is obvious that such foundation is firm and that it is possible for all American manufacturers to safely, permanently and profitably engage in an ex- port business without feeling that they are embarking upon uncharted business seas. “cs. It notes with keen and sympathetic interest the diplomatic innovation of the principle of economic ac- cords to promote and preserve peace over the globe and trusts that the practical development of such a principle will not involve tariffs, which are largely regarded as matters of revenue and domestic policy, and it hopes that the practical application of the principle of economic ac- cords will not violate the principles set forth in detail in BD fie oes of the previous conventions of this Asso- : 1on. It favors the prompt enactment of laws to re- organize our various government activities abroad so as to create a united foreign service. It believes that such a reorganization will enable our Government to sup- port our nationals abroad with an effectiveness that has heretofore been impossible. “6. It records the fact that the majority of its members do not feel that a remission of our foreign debt payments would be detrimental to American exports at an hour when a majority of its members think that there should be no approval of the idea of debt repudiation, cancellation or discrimination between debtors, but that proper con- cessions should be granted to guarantee reasonable pay- ments and promote better trade relations between the United States and the debtor nations, provided it is proven conclusively to the Government and the American people that all concessions are adequately offset and guarantees are provided to equal in value whatever may be conceded in meritorious cases. “7. Its 1922 Convention proposed the idea of a World Economic Conference, which was endorsed by the Cham- ber of Commerce of the United States. It reiterates its belief in the wisdom and value of such an economic con- ference and trusts that all parties in interest may exclude all non-economic objections thereto and then join in the call for a business man’s economic conference, which sh: 4 restrict its program to purely economic subjects, without reference to the inter-allied debts, territorial guarantees, mutual military pledges of united action in potential con- flicts of arms and all such other matters that are not ger- mane to the non-political problem of restoring international trade stability and its attending health and happiness. It is prepared to cooperate by appointing delegates to such a business-man’s conference. It is convinced that ways and means can be perfected to restore normal business relations between the nationals of all countries, especially European and the United States. “8. It accepts the assurances given in respect to bank- ing and credit insurance that facilities will be expanded to at least equal whatever is available to our competitors abroad. “g. It expects alert and enterprising American ship- owners to provide reoular, denendable and efficient over- seas steamship service at public, uniform and non-prefer- ential freight rates, and in return for the same it pledges genuine interest in American ships, and it will urge its members to consign goods to foreign ports in American bottoms and adequately patronize all American vessels which form a potential part of the naval reserve of the United States. It records the hope and wish that the Government and the private shipowners will promptly perfect a mutually satisfactory plan which will take the Government out of the shipping business and restore the same to private business. It believes 100 per cent in the principle of a privately owned and privately operated American Merchant Marine during peace. “to, It recommends that the American harbor and port commissions incorporate in all permanent improve- ments and betterments, the most modern facilities, includ- ing enclosed docks and warehouses, mechanical convey- ors, loaders and other time and labor-saving mechanisms, concentration warehouses, classification bays, dock and warehouse dunnage, adequate fire protection, loading stages, correctly constructed slings, winches and cranes and all other practical means to safely, quickly and cheap- ly handle freight. “tr. It feels certain that some foreign countries might be induced to modify their patent laws, especially the ' working features thereof, in favor of American citizens, providing the United States enacts legislation designed to subject the foreign applicant for a United States patent . to conditions equal or similar to the limitations placed upon the American patentee by the country of such for- eign applicant. “12. It is a pleasure to record that the exporting of American products has become a permanent, dignified and essential factor in American affairs.” Ll eee ee eee eee ee ee ee eeelooeeeelees®sn@®«®«na@aaaaaeeaeaeeaeeaeaeaea—a—a——aaa— eee [12] agehl aret yt Ellis pra m é —/ _