Foreign Trade and Money 



Address of George N. Peek Features Banquet Program at 



Quincy 



A FIVE point foreign trade policy 'de- 

 signed to open up the clogged 

 arteries of international commerce 

 was recommended by George X. Peek, 

 Special Adviser to the President on For- 

 eign Trade, in his address before the 

 annual I. A. A. banquet in Quincy's 

 spacious Armory Jan. 30. 



First, government must assist and back 

 our foreign trade interests, he said, 

 otherwise they will not be able to com- 

 pete with foreign traders who are receiv- 

 ing assistance of their respective govern- 

 ments. 



Secondly, consolidation and unified di- 

 rection of the 50 or more departments 

 afld organizations in our governmental 

 setup dealing with foreign trade, was 

 recommended. He would establish a 

 permanent Board of Foreign Trade com- 

 posed of men experienced in trading, 

 with powers adequate to deal compre- 

 hensively with foreign commercial and 

 financial transactions. 



Keeping accurate and up-to-date ' rec- 

 ords of all transactions with each indi- 

 vidual country "as we must know how 

 we staiyl on our trade and international 

 balance at any given time if we are to 

 steer our course intelligently," was a 

 third recommendation. 



Need Selective Imports 



"In this connection," Mr. Peek con- 

 tinued, "I must emphasize the fact that 

 foreign policy and foreign trade policy 

 must be based upon and conform to the 

 requirements of our domestic situation. 

 Unless it does this it becomes unreal 

 and coirespondingly harmful to our ac- 

 tual interests. I can not state this too 

 foVcefully. 



"As international trade can not move 

 on a one-way street and as we must in- 

 crease our imports if we are to be paid 

 for increased exports, we should pursue 

 a policy of selective exports and im- 

 ports," was the fourth point. The speaker 

 advocated sending abroad, preferably in 

 manufactured form, those products we 

 can best produce, particularly those ag- 

 ricultural products which are the back- 

 bone of our foreign trade and of our 

 domestic prosperity, taking in return 

 those raw materials which we need and 

 _suph other products the importation of 

 which will do the least violence to our 

 domestic economy. 



"Much has been said as to the neces- 

 sity of accepting imports as a matter of 

 national policy," he continued. "I agree 

 completely with this point of view, but 



I believe that we should decide for our- 

 selves what imports we will take, and in 

 what quantities and from what countries, 

 in exchange for the goods we choose to 

 send abroad. In my opinion this can best 

 be determined by making individual ar- 

 rangements with individual nations, 

 country by country, rather than through 

 attempting to apply some blanket for- 

 mula, such as a horizontal reduction of 

 our tariffs, whether that be accomplished 

 through general tariff legislation or, 

 through generalizing tariff concessions 

 granted under the Trade Agreements 

 Act. We have been brought up on pro- 

 tection. If we are to abandon any meas- 

 ure of that protection it should be only 

 in exchange for tangible advantages to 

 us. ... I desire only what is fair, but fair 

 to our agriculture, industry, labor and to 

 America. 



Return to Old Policy 



"To pursue this policy of selective ex- 

 ports and imports it will be necessary for 

 us to abandon the unconditional most- 

 favored-nation policy, adopted under the 

 Harding Administration, and to return to 

 the traditional American policy of ex- 

 tending conditional most-favored-nation 

 treatment only, which prevailed from 

 1789 to 1922. 



"Much is claimed for the point that if 

 the total volume of world trade only can 

 be increased, the foreign trade of the 

 United States automatically will be re- 

 stored. This does not follow unless as a 

 nation we take active steps to promote 

 our interests. I think that we need not 

 wait upon general world recovery to ac- 

 complish our national recovery. If we 

 can stage our own national recovery and 

 build up our own national trade we shall 

 have done much to restore world recovery 

 and world trade. 



"5. I indicated the need of Govern- 

 ment action to an extent necessary to 

 clear up our foreign exchange problems. 



"Perhaps the most potent factor in the 

 congestion of our international trade is 

 that of exchange restrictions imposed by 

 about 35 nations. This means simply that, 

 more or less arbitrarily, these countries 

 have prevented the payment of current 

 and other indebtedness by delaying or 

 forbidding transfer of funds. I shall not 

 discuss the reasons given for such action 

 or the varying degrees of justification 

 except to say I think they were defensive 

 and not retaliatory. I shall discuss the 

 effect and possible remedies. 



"The effect i? that such countries are 



Geo, N. Peek, "The way to trad* U to trode." 



using the money due exporters and in- 

 vestors, without their consent and 

 against their will, and that paj-ment is 

 being made finally upon the t!»rms of 

 foreign governments, at their discretion, 

 often without interest, and with charges 

 and discounts fixed by them or at best 

 regulated as a result of reluctant agree- 

 ment. 



"Now as to remedies. I said in Chi- 

 cago some weeks ago, and I repeat, that 

 in the case of countries exercising ex- 

 change controls against us, the satisfac- 

 tory solution of the exchange problem 

 should be made a prerequisite to the 

 negotiation of any general trade agree- 

 ment. I do not regard reasonable busi- 

 ness requirements as coercion. When our 

 nationals fill their part of a contract and 

 their foreign customers theirs, and the 

 foreign government intervenes, I think 

 that our nationals have a right to ask 

 our government to act on their behalf. 

 This is a matter upon which only gov- 

 ernment can act effectively. No bank or 

 business man, no group of banks or busi- 

 ness men can solve this problem them- 

 selves without the active help of gov- 

 ernment. 



A Starting Point 



"I have stated these five recommenda- 

 tions before and .shall doubtless do so 

 again. I feel that they represent the 

 .starting point for a truly American for- 

 eign trade policy, based upon studies of 

 facts which can not be ignored. The 

 adoption of these recommendations will 

 enable us to go forward. This, indeed, 

 would be a New Deal in American for- 

 eign trade. The way to trade is to 

 trade." 



In opening his address which proved 

 to be highly interesting to thu great 

 audience which packed the Armory, Mr. 

 Peek said, "I want to trade now and 

 not await the millennium when all cur- 

 rencies may be stabilized to a common 

 standard and all trade barriers reduced 

 to a c<)mmon basis." 



This last sentence reveals the line of 

 cleavage between the points of view of 

 Mr. Peek and Secretary of State Hull. 

 At Nashville in December, Secretary 



FEBRUARY. 1935 



U 



