The Waterbury Democrat., 1934-03-10

tions of leanings toward the idea of managing" the currency by means of such changes.
 Special Factors
 The repeal of prohibition has helped to place American foreign trade on the reciprocal basis that is essential to, its permanent success. As a creditor nation, the United States must, in the long run, be an importing nation. The main prob- lem is how and what to import without serious adverse effects oL domestic industry. Prohibition re- peal has helped to solve this proD- lem and is, to that extent, step in the right direction.
 A factor on which the adminis- tration places much reliance is the plan for reciprocal trade agree ments with foreign nations. A fur ther step that will probably prove important is the pending creation of special foreign trade board to negotiate with foreign nations for increases in quotas on American goods.
 But more important than all these special influences Is the gen. eneral economic recovery that has taken place in most of the leading commercial nations of the world, despite the handicap of political uncertainties and obstacles in many of them. This movement if it con tinues. will bolster confidence. in- crease purchasing power relieve the financial and political pressure on governments, and make for bet ter feeling.
 Growth of Trade Barriers
 Unfortunately, some of the new national boundaries established in Europe after the World war were dictated by humanitarian and poli- tical, rather than economic cOnsid erations. Certain peoples found that they had realized their nation alistic aspirations only by placing themselves in an untenable econ- omic position. They were political units but not economic units. In the vain effort to achieve balanced and reasonably self-sustaining in- dustrial systems, these new nations adopted prohibitive tariffs and oth- CT trade restrictions, with the re- suit that old trade routes were established mark cts were shut off from their customary sources of supply, the industrial plants that had depended on those markets fell into ,disuse, and pro- ductive facilities were needlessly duplicated.
 There was thus created an econ cmic strain that aggravated racial entagonisms and made 1t even more imperative for the nations concerned 10 achieve as great q de- gree of economic independence as possible. The older and larger na- tons with interests at stake took sides, and the situation developed into q deadlock in which political and economic issues were almost inextricably intertwined. This state of affairs still exists and, aside from its direct adverse economic effects, is a cause Of much inter- national ill-feelipg. It has played TO small part in contributing to the worldwide depression and in the ultra-natiohalistic spirit that has dictated the econ omic policies of nations in the last few years.
 Effects of the Recovery Program
 Certain recent developments in the United States have not im- proved the background for foreign trade or for international agree raent on currency stabjlization. The obvious implications of the MIRA, as far as foreign trade is con- cerned, are toward higher tariff rates and more restriction on im- ports, rather than the reverse.
 Any sustsined increase in exports must go hand-in hand with an in crease in imports. If this country wishes to restore it's foreign trade, 1t must be prepared to accept the natural consequences of It's cred itor position and permit foreign nations to pay their debts In their own goods and services.