Evening star., 1939-11-28

ing a remedy designed to quicken
the flow of domestic business and so
to restore Alice to her normal size
and growth. Through the trade
agreements program, authorized by
Congress in 1884 and extended in
1887, we are reducing some of the
artificial barriers to foreign trade
which have grown up both at home
and abroad as a result of worldwide
competition in import restrictions.
We are concluding agreements with
foreign countries likeminded in this
purpose, by which they agree to
lower tariffs, enlarge quotas and
remove Determinations against
American goods, in return for which
we, also make concessions to facili-
tate the importation of some of their
products.
Each concession gained from
foreign countries creates an oppor-
tunity for American producers to in
crease exports-men are put to work
in American factories or the market
for some agricultural commodity is
strengthened. In either case, in
come is created and the American
workingman or farmer, when he
goes to market, has more money to
spend. His purchases stimulate
business in many other industries.
some Of which may seem remote
from foreign trade. Suppose he de-
cided this year to buy a turkey for
Thanksgiving, suppose he found
that it was high time to replace an
old radio, or that he finally decided
to have his house repainted. Each
purchase puts other men to work
and creates a better market for do
mestic goods and services This is
the essential purpose of the trade
agreements program G..
The trade agreements program
cultivates foreign markets for Amer
ican products because the recovery
Of these markets Is essential to the
restoration of industries which pro-
duce for the home market as well
as the prosperity of those which
produce for the foreign market.
Statistics Presented.
The index of the volume of our
export trade fell from base figure
Of 100 in 1929 to the low point of
52.3 in 1882, or nearly 48 per cent.
During the same period, the index
Of industrial production fell Al per
cent; employment, as measured on
a man-hour basis, fell SIS per cent;
and prices of finished products and
raw materials declined 26 per cent
and 435 per cent, respectively.
Similar evidence is to be found
in the course of economic events in
the United States during the eight
year period from 1922 to 1929, which
was for the most part a relatively
normal period. not affected by the
abnormal factors of a world up
heaval as was the period which fol-
lowed The period from 1922 to
1929 was marked in the United
States by three distinct, but minor
fluctuations in economic activity
which were national rather than
international in scope. AS measured
by the index of manufacturing the
economic activity of the Nation fell
to Its lowest points of this period in
1924 and 1927 and experienced it's
greatest annual increases in 1923,
1925, and 1928-1929, the increase in
1929 being the same as in 1928. The
years in which manufacturing activ-
ity increased the most, that is, in
1923, 1925 and 1928, were also the
years in which occurred the greatest
increases in our exports of finished
manufactures. The years Of decline
In manufacturing activity, which
were 1924 and 1927 were also the
years of slower growth in these ex-
ports.
1t is no mere coincidence that
there has been a close correspond
ence between movements in exports
and business conditions in the
United States over long period of
years. There is an important con-
nection between activity in produc-
ton for export and production for
the home market.
A few points may be worth men
tioning to indicate that this con-
nection is far more important and
fundamental than might be sus-
pected from the percentage of total
output of domestic production which
Is exported.
In the first place, the percentage
OF total national production which
is exported fails to indicate the
extent to which many industries
having exportable surpluses are de-
pendent on foreign markets. For
instance, the percentage of ma
tional production exported in 1929
was IS per cent in the case of
cotton, 48 per cent in the case Of
lard, Il per cent in the case of
tobacco, SO per cent in the case
Of refined copper, 80 per cent in
the case Of Office appliances, Is per
cent In the case of agricultural
machinery and from to 81 per cent
in the case Of certain petroleum
products. Agricultural industries
with large exportable surpluses are
basic factor in the economic life
OF large sections Of the United
States. An increase or decrease in
exports may mean to these Sec
tions prosperity or hard times.
Moreover, some Of the manufactur-
ing industries constituting the chief
mainstays in our industrial structure
are export industries. A decrease
or increase in their foreign markets
affects the entire industrial welfare
of the Nation.
Would Curtail Domestic Market.
Furthermore, the loss of our for
eign markets would mean q far
greater loss than that represented
by the percentage Of our total pro-