Evening star., 1939-11-28
War 10 Accentuate
Need for Trade Pacts,
Grady Asserts
Temporary Peace Boom
To Require Sound Program.
Forum Speaker Says

ToRequire Sound Program,
Forum Speaker Says
Henry F. Grady, Assistant Secre-
tary of State, spoke on "The Present
Need for Sane Commercial Policy"
last night in the National Radio
Forum, arranged by The Star and
broadcast over a Nationwide net
work of the National BroadcaSting
Co. The text of his address fol-
lows:
Americans in all sections of the
country. in our cities and on our
farms, in our Offices and our fac
tories, toiling in our cotton, wheat
and corn fields, in our mines and on
our railroads, all are coming to
realize that the United States is one
of a group of nations which must
seek their livelihood in an interna-
tional community. Neither the
United States nor any other country
can draw apart from this world
community and yet hope to main
tain its present standard of living.
The worlds resources are not
equally distributed. Some countries
possess great surpluses of raw ma
terials but are lacking in capital
equipment and skilled labor. Other
countries are well adapted for carry
ing on industrial production but lack
necessary raw materials. Even the
United States with its unparalleled
abundance of natural resources can
not hope to be self sufficient.
The raw material-producing coun-
tries differ widely in respect of the
kinds of raw materials which they
are able to supply, and industrial
countries differ widely in respect of
the types of goods which they are
best equipped to manufacture. Even
between industrialized countries
there is close interdependence: the
greatest development of mutually
profitable international commerce
has been between such countries.
To fulfill the needs of this inter-
dependence of nations there has de-
veloped mechanism of interna-
tional economic relations of which
the domestic economy of each coun-
try forms functioning part. The
exchange of commodities produced
by countries rich in raw materials
for articles manufactured by in
dustrial countries illustrates the
economic interdependence of ma
tions, just as the exchange Of the
products grown on our farms Tor
the factory products of our cities
Illustrates the economic interde-
pendence of the various sections OF
the United States.
Changes Have Disturbing Effect.
Under normal conditions of peace
economic conditions in a country
are affected to an important extent
by the policies and actions of other
countries. In time of war, however
changes occur in the economies OF
the participants which are relatively
sudden and violent. Such changes
have an especially far-reaching anc
disturbing effect on the economic
structure Of the entire world.
Under normal conditions, the in.
ternational mechanism of trade anc
capital movements operates to effect
adjustments; under wartime con.
ditions, however. the changes which
occur are even more serious in their
consequences because Of q partia.
breakdown Of this mechanism. The
economic problems of war are not
confined to the belligerents alone;
they burden the international com.
munity as whole; no nation
escapes unaffected.
My discussion this evening of our
present need Of a sane commercial
policy as embodied in the trade
agreements program is based, first
upon the fact that the world is
closely bound together commercially
financially, and industrially, and
second, upon the significance of that
fact in the light of the present con-
f1ict in Europe. In order, however,
to appreciate the need of the trade
agreements program at this juncture
OF VOL Id affairs, it is necessary that
we understand the bearing of foreign
trade upon a prosperous domestic
market and the contribution which
this program has made to American
prosperity by helping to restore and
expand foreign markets for our pro-
ducts.
The most distinguishing charac-
teristic of the depression through
which this country passed between
1880 and 1882 was the sudden inabil.
ity Of manufacturers. farmers and
merchants to find buyers for the
goods they had to sell, and their
consequent inability to afford the
goods they had been accustomed to
purchase. The stagnation of domes-
tic markets, and interruption of the
steady flow of production and con-
sumption brought in its wake new
unemployment, increased stagnation
of business and general pessimism
regarding the future.
In the course of the depression
years of 1880, 1881 and 1882, we
learned once and for all that the
great domestic market, in which we
had come to place almost unbounded
confidence, was capable, like Alice
in Wonderland, of rapid shrinkage
as well as growth. Instead of being
destined to grow without interrupt
ton, as many had come to sup
pose. the market proved to be capa-
BILE of stable activity and expansion
only so long as 1t was able to draw
nourishment from all accustomed
forms of economic activity. In 1880
and after, this was not the case,
and the market succumbed from a
lack Of certain essential stimulants,
one of which was the impetus given
to domestic trade by a normal flow
of foreign trade.
Assumption Proves False.
In 1880 the Hawley-Smoot tariff
was enacted as If on the assumption
that our $4,000, ,000, 900 foreign trade
was a branch of the economy not