108 SECTIONAL ADDRESSES 
trade the indispensable minimum of guarantees and prevents arbitrary 
and discriminatory treatment, if insisted on with too great rigidity, it may 
obstruct its own purposes in a period of crisis and difficulty such as we are 
now passing through.’ 
An additional exception of importance which, however, has not yet 
won general acquiescence was suggested by the American delegation to 
that London Conference and repeated at the Pan-American Conference 
in the following December. The proposal was that, under certain 
conditions, the benefit of multilateral pacts for the reduction of trade 
barriers which are open to adherence by all countries should not be 
claimed by non-participating countries. The general underlying idea is 
that if collective agreements are made among groups of countries which 
are prepared to reduce barriers to trade between themselves, other 
countries not willing to undertake the same obligations should not benefit 
by such pacts merely because they have general most-favoured-nation 
agreements with some of the participants. Rigidity of interpretation of 
this kind has held up several Danubian pacts which aim at closer economic 
relations between countries in central and eastern Europe. Perhaps, too, 
it was responsible for the breakdown of the Ouchy Convention in 1932 
between Holland, Belgium and Luxemburg. It will not be easy to get 
a general informal understanding among nations that they should not 
press their claims unreasonably and so destroy the chances of success of 
all collective agreements for the reduction of trade barriers. There are 
signs, however, that such an understanding is not impossible of attainment. 
This is fortunate ; for on it will depend the future successful working of 
the most-favoured-nation clause. 
The favourable attitude towards the problem of the most-favoured- 
nation clause on the part of the London Conference Committee on Trade 
and Commercial Policy was only one of many indications that the delegates 
on that occasion were ready to recommend a definite reversal of the worst 
of the restrictions now hindering trade. There could not but be general 
agreement that the unsettled monetary situation, which called for stabilisa- 
tion and general adjustment of international financial relations, was the 
most fundamental of the problems demanding solution and that, failing 
success here, no useful purpose would be served in proceeding with 
discussions on the removal of the ordinary barriers to trade. When, 
therefore, it became apparent that agreement concerning currency 
stabilisation was impossible, owing to the reluctance of certain govern- 
ments to give up the power of control over internal price-levels which 
they considered currencies unlinked to gold conferred upon them, there 
was no option left to the representatives of other governments except to 
decline to enter into either short-term or long-term undertakings con- 
cerning trade policy and related questions. But it is important to note 
that there was a fairly general consensus of opinion that the shrinkage in 
world commerce was due to a considerable, although an undefined, 
extent to high tariffs and all the other barriers, such as quotas and exchange 
control, which had been devised since 1929. 
In accordance, then, with this general feeling, in order that there might 
be a favourable atmosphere for international discussion and for possible 
