/--^here's a couplb 



I MORt bILllONS! LET ME 

 VJ^NOW IF YOU NEED MORE 



what's that? 



I CANY HEAR. YOUi 



the money due exporters instead of bor- 

 rowing it from investors. 



Again, exclusive commercial agree- 

 ments and barter transactions have been 

 made by other nations quite generally 

 since the depression started. We have 

 a record of 180 of them covering all 

 phases of international trade, from gen- 

 eral tariff adjustments to specific agree- 

 ments, barter between nationals of dif- 

 ferent countries, state trading, and, in 

 some instances, trading by nationals en- 

 couraged by governments. This practice 

 is not limited to the smaller nations. 

 These mutually exclusive compacts have 

 one common characteristic — that of leav- 

 ing the United States entirely out of con- 

 sideration. They have covered even such 

 fine points in trade between nations as 

 the international traffic in tourists. In 

 June of last year two countries entered 

 into an agreement whereby one of them 

 traded tourists' revenue with another for 

 carloads of hogs. The basis was $40 per 

 head for hogs and |60 per head for tour- 

 ists. The world is indeed hard pressed 

 for a medium of exchange between coun- 

 tries when such meticulous adjustments 

 as these are necessary. -^ ^; v^ 



I shall not take time to dwell 

 upon the better known restrictive devices 

 familiar to you all such as embargoes, 

 quotas, and excessive tariffs. I have 

 undertaken to outline briefly the situa- 

 tion as we see it from the studies we 

 have been able to make. In passing, I 

 shall refer to some of the criticisms di- 

 rected to my published reports to the 

 President. I shall then endeavor to in- 

 dicate what we are doing to improve the 

 situation and to make it possible to get 

 serious negotiations really under way. 



The first criticism is that there is 

 nothing new in these reports and there is 

 nothing to be gained by reminding the 

 public of the mistake in our international 

 transactions during the last dozen years. 



'^.■^■- .': 



Part of the criticism is justified — 

 there is nothing new in these figures. For 

 my own part, I have said so repeatedly. 

 They have remained safely filed in the 

 Department of (Commerce after the Fi- 

 nance and Investment Division of that 

 Department in its published yearly re- 

 ports since 1922 called attention both to 

 the condition and to the trend. I may add 

 that in 1922 the responsible members of 

 the administration were supplied with an 

 international balance sheet, a copy of 

 which is on record in Washington. 



The trouble is that in the face of these 

 repeated warnings nothing was done by 

 the responsible authorities to prevent the 

 debacle which followed, even though both 

 the condition and the trend were clearly 

 indicated to them. 



Next, it has been and still is argued, in 

 some quarters, that the country was bet- 

 ter off as a result of the policy which 



r.:-^0 



.•*./. 





TIME FOR UNCLE SAM TO DO A LITTLE 

 YANKEE TRADING TOO 



"^ V • »> . 



' ' < • I " :. 



•■■ \ ■ 



was followed, of financing our exports 

 through foreign loans, because industry 

 was kept busy, wages were paid, there 

 was general activity, and some individ- 

 uals and concerns made profits, even if 

 investors suffered. I disagree with that 

 view. If the investors were a limited 

 number of people of great means, who 

 could stand the loss, it might have some 

 foundation. But when the victims, in ad- 

 dition to the many small investors, were 

 our insurance companies, trust com- 

 panies, savings banks, and small coun- 

 try banks, which were trustees for mil- 

 lions of small investors and depositors, 

 every property owner in the nation was 

 affected adversely by the collapse of our 

 short-sighted foreign commercial and fi- 

 nancial policy. As these institutions were 

 affected, the loss spread throughout the 

 land. It contributed greatly not only to 

 the weakening of our whole financial 

 structure but to the social unrest as well. 

 It; thus becomes a matter of national 

 and Governmental concern. 



Another argument is that arrange- 

 ments between the nationals of two coun- 

 tries, such as barter transactions, which 

 contemplate balancing accounts, would 

 result in greatly reducing our foreign 

 trade. 



What is the use of trade without pay- 

 ment? In our normal private business 

 activities we limit our sales to what we 

 consider good or reasonable credit risks. 

 We rely upon the ability of the buyer to 



j^pay. If he cannot pay in the conven- 

 tional medium of exchange, we try to 

 find out how he can pay or what he can 

 give to us that we can use to satisfy the 

 debt and facilitate trade. I need only to 

 call to your attention the practice in re- 



V cent years of some of our most orthodox, 

 implement companies, and others, who: 

 gladly took wheat, com and cotton in 

 payment of old indebtedness or for new, 

 (Continued on page 6) v \ .< 



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