FOREIGN TRADE: Hitler at the Palace

Last week 1,500 bankers, exporters, importers, shippers, diplomats took over San Francisco’s Palace Hotel for the 27th National Foreign Trade Convention, gloomiest in many years. Convention managers spent hours on the telephone, trying to round up enough delegates with white ties and tails to fill out the head table. Palace Hotel officials could not remember a convention that had done so little drinking. For three evenings the bar of the Pied Piper Room was lined with fresh glasses, iced and ready for the Martinis for which the bar is famous. The ice in the glasses turned to water as delegates talked in nervous little groups. Their talk was subdued by one vast, all-pervasive IF. For every question about U. S. foreign trade had the same answer: “It depends on God and Hitler.”

Opening day, the delegates’ gloom was mocked by the U. S.’s own statistics. Despite Hitler’s elimination of many a U. S. market in Europe, Department of Commerce figures placed U. S. exports for the first six months of 1940 at $2,067,000,000, up 46% over 1939. Export losses by farmers, oilmen, automakers were more than offset by increased Allied purchases of steel, machinery, aircraft.

Chief import gains were in rubber and tin from the East Indies, nickel from Canada, wool from Argentina and South Africa. Since RFC has only recently begun its purchases of strategic materials, these gains were likely to grow. But, for the six months, total imports were up only 18%. Result was a U. S. merchandise export balance of $773,927,000—highest for any half-year period since 1921.

Good or bad, the figures could not pierce the pall at the Palace. They were ancient history; the delegates were worried about Tomorrow. Long had the Council plumped for more and freer trade, steadily endorsed the reciprocal trade agreement program of Cordell Hull. Last week it watched the Secretary of State take one more backward step in his losing battle for commercial freedom: to the long list of U. S. foreign-trade restrictions was added an embargo on aviation gasoline to countries outside the Western Hemisphere. Free traders confronted in San Francisco the question that lurks at every U. S. crossroad: to preserve liberty for the future, how much liberty is it necessary to put on the shelf?

As British Purchasing Commission’s Sir Louis Beale told the delegates about British purchases and plans, a Manhattan importer named Carl Whitman jumped from his chair, shouted “Hey! When are you going to pay what you owe us?” Next to those, the convention’s grimmest words were spoken by a vice president of Manhattan’s Chase National (biggest U. S.) Bank. Tall, balding Joseph Charles Roven-sky foresaw putting a lot of liberty on the shelf right away. He believed the U. S. would abandon at least temporarily the Hull methods, resort to Hitler’s own methods of “barter or compensation trade.” The Hull program was “sound in conception under normal conditions,” said he, but “it is entirely probable that . . . we . . . shall also adopt trading practices born of expediency.”

Next day this unpopular warning was answered by Franklin Roosevelt himself. A message from the White House to the convention blasted barter, said it would “subject . . . the entire nation to the regimentation of a totalitarian system.” Henry Francis Grady, Assistant Secretary of State, followed up his chief’s attack in person. His small eyes flashing behind shell-rimmed glasses, Free-Trader Grady tore into protectionism, dictatorship, a “sixth column … of special interests.” Said he: “I cannot believe that the cause of liberal trade is lost.”

But little as they liked to, they admitted that if Germany controls post-war Europe, they will trade with Germany. Before adjourning they passed a sheaf of resolutions. Among them: 1) gold is valuable; 2) the Johnson Act should be repealed; 3) the Hull reciprocal trade agreements are fine.