Evening star., 1940-06-02
Nazi Victory Would Endanger
Much Of i. S. Export Trade
43 Per Cent of Total Shipments Formerly Went
to Europe; Germans Also Might Gain
Edge in Other Markets
By Oliver Mckee.

II the Naz war machine conquers the
Allies, and totalitarian Germany emerges
from the present struggle as the undis-
puted master of Europe, with italy, its
axis partner, satellite, the United
States will face serious economic prob
LENS in adjusting itself to the new order.
This is the opinion Of Federal experts
who are studying the probable effects on
our national economy of the subjugation
of Britain and France by Hitler's legions.
Though no specific plans for meeting
these problems have yet been formu-
lated, administration officials, in infor-
NAL discussions, have been appraising
the implications to the United States Of
. possible Allied defeat
That the fate of the great British and
French Empires hangs in the balance
seems clear enough. King George, ruler
of an empire on which the sun never
sets, warned his subjects that they faced
life and death struggle" and that
Germany sought no mere territorial con-
quest, but the overthrow, complete and
final, of this empire and of everything
for which it stands"
Defeat of the Allies not only would
require a fundamental change in our
concept Of national defense. but a huge
increase in our expenditures for that
purpose. In her war preparations Ger
many has devoted a large part of her
national effort to ornaments, perhaps
as high proportion as 40 per cent or
more. Despite the larger appropriations
{or national defense in recent years, the
United States has been spending only a
small percentage Of national income on
its military and naval establishment.
In the years Immediately ahead the
United States, to assure an alright
hemisphere defense may find it neces-
sary to spend from $4,000 ,O0o 900 to s10,-
900 900 900 on air, land and sea defenses.
Our national income in 1899 is estimated
at $6S 500 100000.
Taxes or More Debt Necessary.
So vast an expenditure for armaments
will have far-reaching effects on our
national economy Federal economists
point out. Though these expenditures
will create certain amount of new en-
ployment, they will not result in the
production of things really needed by
the American people, and in the opinion
of many economists will tend to lower,
rather than increase the American
standard of living
These expenditures can be paid for
in one OF two ways or a combination of
both-by taxes, or by borrowing against
the future earnings of the American
people. Increased armaments also raise
the question of the public debt, now fixed
by statutory limitation at $4,000 000,-
600. If national defense expenditures
are financed mainly through borrowing
and the Government continues to spend
a great deal more than it collects from
the taxpayers. the specter of imitation,
too, must be reckoned with.
National defense costs are much higher
here than they are in Europe, or in
Japan. Battleships, airplanes, artillery,
bombs, ammunition and other imple-
ments of war can be turned out in large
quantities by the United States, but they
are more expensive than elsewhere. par
ticularly in the totalitarian countries,
where the government controls prices
and labor. In securing personnel, the
American Army and Navy must COM
pete in the labor market by setting pay
rates high enough to attract recruits
Totalitarian governments, on the other
hand, have no recruiting problem, for
the state is the supreme master. Com
pared with our standards, their soldiers
and sailors receive small pay.
Trade Program Threatened.
Defeat of the Allies would bring sweep
ing changes in the pattern of world
trade, ana it seems likely, if not Ger
tain, that the United States will lose a
large part of its foreign trade In
1888. Europe, our leading export market,
took 43 per cent of our total exports.
Latin America ranked second, with l8
per cent, and Asia was third, with IT
per cent; Northern North America
fourth. with Is per cent; Africa fifth,
with 4 per cent, and Oceania SIXTH with
3 per cent. These percentages pointedly
emphasize the Importance of Europe as
a buyer of American goods
With totalitarian Germany dominating
Western Europe. the Nazis will be in a
position to dictate both the exports and
imports of Europe. Controlling produc-
ton, prices and labor, the Nazis, despite
the strain of the war effort, have been
fairly successful in maintaining fairly
large volume of exports. After the war,
If the swastika flies in triumph. Ger
many may be able to undc~-c'l the
United States in Europe, and perhaps
also in many world markets. With the
possible exception of South America, the
United States may find it impossible to
continue its reciprocal trade agreements
program.