Evening star., 1937-06-06
TRADE PACTS PAVE WAY
TO EUROPEAN ALLIANCE
Negotiations for English Treaty Seen as
Wedge to Break Effect of Johnson
Act, Neutrality Law.

oAAS SAAAoSu oedtcS dllU Lie bTlClSQ
intend to renew CONVEX
sations for settlement of the debt
question This is, of course, nominally
the scope of any trade agree
ment since any reduction OF the debts
must be approved by Congress. But
to the British the amount they owe
us is less important than the mode of
payment. The administration be-
lieves it will encounter little opposition
from the Senate If fair sum is
agreed upon and if the British are
willing to pay it over a number of
years out of their trade balance with
the United States. There are num-
ber OF other questions such as dollar
pound stabilization, gold policy, ETC.,
which are currently forming subjects
Of conversations between the two
governments. But as soon as this
agreement is concluded, the johnson
act, while remaining on the statute
books of the United States, becomes
as far as Great Britain is
concerned
The London Washington conversa-
tions are being carried out with the
utmost secrecy. But secret diplomacy
cannot remain long secret these days
Information percolating from London
and Washington indicates that Great
Britain is satisfied with the contents
Of the neutrality act and with proposed
debt arrangement which would shelve
the Johnson act. Britain now is will
ing to make concessions desired by
Mr.. Hull, which heretofore have been
refused.
France Wants New Pact.
Although reciprocal trade agree
ment with France was signed last
June, it is an open secret that the
French government desires to negoti-
ate another pact as wide in scope as
the British h-American agreement
These conversations will not start
until the British pact has been
signed. The johnson act is much
more irksome to the French govern
ment than it is to the British. and
M. Blum, or his successor, will be
willing to go far in the line of con-
ceSsions to obtain a settlement Of the
debt question based on payment in
kind. After all, the theory of pay
ments from the surplus trade balance
is nothing else but acceptance of
goods instead Of gold.
So far, the reversal of our policy
the war debts, sugar-coated
in trade agreement, does not appear
to affect our desire to remain neutral
in the event of another world con-
flagration. But the situation is not
so simple as all that.
Germany and Italy are among the
nations which are affected by the
johnson act. These two nations come
under the pale of the measure and
are not able to obtain loans in the,
United States. The chances Of these
two relationships evading the PEN
alties imposed by the Senate on de-
faulters are exceedingly slim, because
there is no likelihood whatsoever Of
their concluding a reciprocal trade
agreement with this country in the
near future
The Italian government opened
for a pact long before
the British and the French govern
pents dreamed of such an approach.
But the conversations were abruptly
when Mussolinis legions
invaded Ethiopia. At that time, Of
course, the Rome government was
anxious to push for the conclusion OF
4 reciprocal trade treaty, but Ambas-
Sador Augusta Rosso was told by the
State Department that the various
restrictions imposed by his government
On trade were against the principles
Of economics OF the State Department
and nothing more was done about it.
The department admitted, unofhcially,
that the arbitrary act of II Duce
defying all international agreements
was the real reason why the talks had
been Indefinitely postponed.
Italy Seems Out.
They have never been resumed
despite the efforts of the Italian
government. An old treaty of
Commerce and Amity' was de-
nounced few months ago. Now the
State Department holds the position
that until new commercial treaty
IS signed, it would be useless even to
talk about reciprocal trade agree
ment And this bids fair to take a
long, long time.
In regard to Germany, the situation
IS still less promising. There were
vague private conversations between
the former German Ambassador, DR..
Hans Luther, and officials of the State
Oepartment-principally with Assist
ant Secretary Sayre. But these never
got beyond personal talks. The State
Department is opposed to the dis
criminatory trade policy of the Reich
and, until Hitler decides to abandon
it, there Is nightly little chance that
even exploratory conversations will be
Initiated
Thus, while the obstacle to financing
wars with American money will be
removed for the French and the
British governments as soon as they
conclude trade agreements which will
incorporate settlement Of the war
debts, the German and the Italian
governments will remain barred from
the financial and export markets Of
the United States. Literally, however,
there is no reason why these latter
two countries should not individually
negotiate settlement to their COVER
mental indebtedness Of the United
States.
The man from Mars seems to think
there is only = very short step from
an economic affinity Of interests to
a political understandings political
understanding which must inevitably
be translated into a pact promising
support, other than material, to one
group Of belligerents.
(Copyrisht, 1872
U. S. Using Autogiro
To Fight Cotton Pest