The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1939-1949, 1939-05-25
ECONOMIC HIGHL1GHTS

ECONOMIC HIGHLIGHTS
Any nation which subsidies 1t.
foreign trade, through barter ant
export subsidy systems, is penalize,
by our government to the tune o
Q Is percent extra duty on an,
goods it sends into this country
Most notable example of a countr.
falling into this "leaSt favored ma.
tion" category, is Germany. TIL,
Reich has practically no gold, ane
It's international credit is non-ex.
istent. So it carries on foreign
trade through an extremely inolvec
and economically dubious barter
method. Result is that all our Ger.
man imports are hit with a tariff
Of Is percent, on top of all oth-l
duties. That goes as well for coun-
tries which have been absorbed BY
Germany, or brought under Ger
man economic "protectorships,
such as Austria and the Provinces
Of Czhechoslovakia. -.
The United States Department Of
State, under the leadership of Mr..
Null, has strongly criticized subsi-
died trade. In Mr.. Hull's view, the
barter system is simply one more
evidence Of totalitarianism that goes
straight against the grain Of demo-
cratic convictions. He believes that
world prosperity can result only
from the freest possible commercial
relations between nations, on cash
basis, with all doing business In the
same manner and with none favor
ed and none penalized.
In the face Of that, the fact that
this government Is seriously con-
atdering putting into effect q bar
ter system Of our own, on limited
scale, has excited q great deal Of
interest. And 1t has likewise excit-
ed . great deal Of informed criti-
CtSm.
The commodity in question Is cot
Ion. The cotton problem has long
been one Of the most difficult Of
cur domestic issues. For some
years we have pursued q policy of
cotton scarcity, and the result is q
strong stimulation Of foreign pro-
duction, with q consequent reduc-
ton in foreign demand for Ameri-
can cotton. At present, the world
carryover Of past seasons crops is
equal to about four years OF nor
NAL export requirements. Matters
have reached the point where our
lawmakers simply don't see any
way out, and are willing to clutch
Ut any straw that offers hope Of |
succor.
The new proposal involves barter
tnng our cotton for English produc-
ed rubber and tin-two Of that |
small list Of important commodi-
ties which cannot be produced IN
necessary quantities in the United
States or its possessions. At the
same time, the government would
provide an export subsidy for cot
ton, so that American growers
would receive a price considerably
In excess Of the world price.
It is apparent that this scheme,
workable or not. goes completely
contrary to the fixed policy of the
Department of State. Only a few
weeks ago, Secretary Hull issued
statement praising the success
achieved by reciprocal trade agree
ments, and pointing to the failure
Of barter trade. In this statement,
he said: Regimented foreign trade
based upon the principle of bilat-
eral balancing, supplemented by bar
ter or compensatory arrangements,
Is fundamentally unsound The
substitution Of a general policy of
barter or compensation trade for
normal :. trade methods newt
ably leads to curtailment of total
trade and reduction of living stand
ards >,
If 1t was assured that only cot
ton would be gievn the rather
questionable benefits of a barter
system, even the opponents of the
compensatory device would be less
concerned. However. there is a feel
Ing that once such plan were put
into effect on behalf of one major
crop or commodity, there would be
no limit to its potential expansion.
As Dorothy Thompson writes, "Po-
ht1cally speaking, such a barter
transaction, once begun, is bound to
be extended to other commodities
So we introduce a new pork
barrel scheme, the mere apprehen.
sion of which will disrupt the mar
kets Of other commodities. In its
present form, we will subsidize the
foreigner without expanding our
foreign markets and then. in
all probability extend loans to Bra
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