Evening star., 1938-02-27
International Finance
Troubling Roosevelt
BY OVEN L. SCOTT.

states to make q fundamental decision
that he, like his postwar predecessors
has tried to avoid making. Until this
decision Is reached, the country, of
necessity, must drift.
All through the years since the war,
the people of the United States have
been confronted with the following
choice:
First, they could assume the RESPONSE
bilities that 60 with the newly acquired
position as the worlds principal creditor.
This would involve gearing the financial
and economic machinery of the Nation to
that required for international banking.
1t would call for vast loans and for
tariff adjustments downward sufficient
to allow borrowing nations to pay their
debts in goods rather than in gold.
Or, second, they could turn their backs
on the rest Of the world, forget about
most Of the dollars already lent to make
the world safe for democracy, and set
about working out the controls inside
the Nation that would be necessary to
make an economic system function sat
isfactorily in limited setting. This
would call for very much stronger and
more active National Government,
geared to provide the outlets for invest
ment and spending at home that unde-
Veloped foreign nations provided for
creditor nations in the past.
But, In all of the years since the war
the people and their governing officials
nave baked at making a decision be-
tween these two courses. Instead, they
nave tried to follow both at the same
time.
Under Presidents Coolidge and Hoover
vast loans were made to Europe and to
south America. but, at the same time.
tariffs were raised so that the borrowers
had more and more difficulty meeting
interest and principal payments. Finally,
many borrowers defaulted, keeping the
puollc works and housing developments
that American savers had financed, while
TINS country kept the I. o. Us of doubt
full value
President Roosevelt started out soon
after taking Office to change all of this.
He broke up the World Economic Confer
ence, devalued the dollar. cut ties with
the rest OF the world and set about to
use the Government, through A A
N. r. A., P. w. A. and various other
agencies, to work out a recovery on q
strictly domestic basis The President
Hiram johnson barring new loans tn
nations that had defaulted on the war
debts. The New Deal course definitely
was nationalistic.
But, while Mr.. Roosevelt was pursuing
the first course of nationalisn. Cordell
Hull. Secretary of State. was busy pro-
noting the first course, involving an in
ternational approach to recovery.
MT, Hull is ono of fhe r,net
OF men. He is one of the few high on
Gals IN washington who have understood
from the first the exact nature of the
courses that might be pursued. He made
up his mind on his choice and has fur
thered that choice with unyieldinp con-
slstency. His vehicle was the reciprocal
traoe agreement program which Congress-
approved in 1884, providing for tariff
adjustments by international agreement
ratner than by congressional log-rolline.
Inc secretary of State knew that Mr..
roosevelt was bound to run into trouble
WIN the natlonalistic controls. for which
lne nation was not prepared So he
pioooed ahead, finally effecting agree
menus with Is nations, the combined
enect o! which has been to reduce appre-
claoiy the tariff wall around the markets
OF TINS country. Recently Great Britain
-tie biggest OF our foreign customers
agreed to negotiate trade treaty
Inc result was that, when q new de-
preston developed last fall. President
roosevelt. looking for an "out." saw the
Hull program as an alternative to a new
venture into the revived and strength
ened controls that would 20 along with
natlonalism. He apparently made I'M his
mlnd that the country was not In the
mooo Tor stronger New Deal.
80 the United States began to develon
real interest in the world about. The
approaching British trade treaty nepo-
tlatlons were blown up into an event of
vast political as well as economic impor
lance There was insistence that the
ooor to China be kept Open The Presi-
oent talked OF quarantine" for agrees
sor nations. He and Mr.. Hull developed
the line OF united front of democracies
10 stop the march of dicta torships. Sem
ators were approached to find what thev
would think OF adjusting war debts so
mat the johnson act could be removed
from the path OF vast new foreign loans.
The mere mention of war debts with an
election approaching caused the Senators
TO hit the ceiling. Hardly had President
Roosevelt admitted that no progress was
being made in this direction before Great
Britain broke the united front of democ-
racies by agreeing to talk business with
Italy and later with Germany.
Wind went out of the British trade
agreement plans. The fact of the matter
is that Great Britain always held the
whip hand in any trade negotiations he-
cause of the fact that she buys two and
one-haf times as many dollars worth
OF goods In the United States as she seils
here. Her chief interest in making anv
concessions lies in the prospect that. in
this way, she can assure herself of a
market for her securities in the event ~
trouble. Va
Now, with Britain dealing with the die.
tatorships, Secretary Hull finds that he
has been left holding the bag.
Mr.. Hull had backed away from trode
agreement with Italy. He had vetoed a
barter deal for the sale of a large amount
OF cotton to Germany. He showed little
interest in an agreement with ,Jsnan
The reason Is that his program calls for
freeing of world trade from the restric-
tions OF government control while those
nations rigidly regulate their trade, They
represent what might be called the New
Deal in world commerce.
So Mr.. Roosevelt finds that he is stuck
again.
AS he looks around the world, he finds
That Germany, Italy, Japan and Russia