Evening star., 1941-01-01
Drastic War Changes
Bring New Era in
Foreign Trade
important European
Markets Closed to
Form Products
Ry EUGENE r. THOMAS.

President National Foreign Trade Council.
This war presents aspects SO diff
ferent from those of the previous
war that our past experiences cam
not be relied upon as a guide to the
course of events in the next two or
three years.
In the previous war we maintained
our commercial lines of communiCa-
ton with European neutral COun-
tries, in sharp contrast TO our present
virtual exclusion from European
markets.
The development in the last
quarter century of aircraft has in
JcCted a new and powerful force
destructive of seaborne commerce.
In the previous war our farm
products continued to find outlets
in European markets. Our present
surpluseS of wheat, tobacco, cotton,
lard, fruit, together with wide
range of peacetlme manufactured
goods not essential TO the conduct
of war, are shut out from their
leading markets.
For the time being, these losses
in trade that affect so adversely
large sections of the country are
compensated, but in value only, by
the increasing momentum in the
production and sale of the weapons
and materials Of War-noW practl-
cally confined to British Empire
countries, Latin America and China.
Farm Exports Cut.
We cannot, therefore, take
sanguine view of the future, based
upon our increases in our export
trade during the first year Of the
war, ending August 81, 1910.
In that year We experienced sharp
declines in the following commodi-
ties that enter into our normal,
peacetime trade: Raw tobacco,
chiefly leaf. suffered the severeSt
loss by value. S775OO0OO; passenger
automobile cars declined by S34.-
100000; wheat by s2900OO00; fresh
fruits, a loss Of 100000.
Various groups of crude petroleum
and manufactures thereof also
showed a large falling of III exports.
1t is obvious that compensation
in value. owing to increased exports
of war equipment and materials,
Goes not solve the problem Of how
to dispose Of acCumulating stocks
of agricultural and other products
shut out from continental Europe
and from British Empire countries
as wartime non-eSSentlalS. Some
relief has been afforded the pro-
ducers by governmental purchases
of tobacco, cotton. corn and other
farm products, but this interruption
to trade-Whlch IS likely to continue
during the duration Of the war
constitutes a wartime problem of
growing dimensions.
Our trade figures for the first year
of the war. showing export increases
in all geographical divisions, and
resulting in an export balance Of
81 .39l 900 000-an increase of S582.-
100000 over the previous 12-mOnth
period-cover period when France
was a large purchaser, and when
European neutral markets only
gradually succumbed to the German
invader.
Trade Areas Restricted.
Looking to the second year of the |
war. our freedom of trade is limited
IN the main to British Empire Coun-
tries and to Latin America. Our
export trade in general will be gov
erned by our plans for national and
hemisphere defense. by regulations
controlling exports of strategic and /
critical materials: by limitations on /
loans imposed by the Johnson Act: |
BY the limitations Of our Neutrality
Act and by blockade and other
shipping restrictions enforced by
Great Britain and the dOmlnlonS.
Of immediate interest. as affecting
our normal, peacetime trade in this
second year of war. is our trade
with Latin America. Our export
trade with the other Americas has
improved as a result of our capacity
to be a source of supply for goods
which they formerly obtained from
Europe, and by the aid given to
these neighboring republics by our
governmental loans and credits.
Our imports from Latin America.
however, Jagged behind our exports
in the first year of war by S1170O0,-
OOO Our export balance in trade
with Argentina, for example,
amounted to S38000000, and with
Brazil an export balance Of $1,000
900. With q diminution in their
purchasing power Of approximately
$500 100000. through loss of their
European markets (Of which S24O,-
100000 went to Germanv), the prob
lem we face is one of buying more
from the Latin American countries.
Latin America Watched.
Trade missions from Great Brit
ain, Canada and the United States
are at present in Latin America
an indication of the more intense
competition for this trade. As COM
pensation for losses elsewhere. The
wartime emergency will increase
British trade agreements with these
countries as a character detrimental
to American exporters. which, II
projected beyond the war period,
will constitute a serious problem,
the solution of which must lie in a
postwar Anglo-AmeriCan under
standing and accord Which~Will free
the Latin American markets from
any restrictions that discriminate
against United States products.
In the brief space allotted to me,
It is difficult to appraiSe events III
this second year of the war in terms
of our international trade prospects.
American trade enterprise is so
inextricably bound up with primary
political considerations relating to
defense that no one can foreSee
what changes in the European mill
tary situation may come to ease or
further intensity our foreign trade
difficulties in respect to the sale OF
our surpluses of normal peacetlme
products.