550.S1 Economic Commission/16: Telegram
The Acting Secretary of State to the Chairman of the American Delegation (Hull)
102. For Hull [from Roosevelt]. Your 91.22a The following may be of use to delegation and economic section and form basis for discussion in conference:
[Page 686]The government of the United States sees no inconsistency between its program for economic recovery and international cooperation for the purpose of restoring prosperity throughout the world.
The measures taken in the United States involve: lifting the price level to restore a more equitable relationship between debtors and creditors; provision of a medium of exchange which shall be substantially equal in purchasing power from one generation to another; stimulation of business activity and reemployment of idle millions through an immediate program of public works and reorganization of relations between government and business; managing of production to meet actual needs for farm products; creation of new purchasing power by a concerted effort to raise wages and to spread employment through restriction of hours of work; and a genuine effort to balance current expenditures and current receipts so that the credit of the government can be maintained.
It is conceived by this government that such a program is desirable not only for the United States but for other countries as well; it would welcome similar efforts elsewhere. If such a united effort should commend itself to other nations, the firmest basis would be laid for world-wide recovery, and international cooperation would immediately become possible. A substantial similarity of standards and of programs for recovery would remove any necessity which may exist for closing our borders to the goods of other nations and for most currency discrepancies and fluctuations.
The efficiency of the agricultural and manufacturing enterprises of the United States is well-known. In the midst of a great effort for recovery, however, the whole program might be jeopardized by exposure to concerted competition from other regions whose standards were markedly lower. We cannot afford to remove protection if such a move would involve exploitation of workers and farmers. A general lowering of living standards throughout the world would result. The people of the world would have no reason to thank us for entering on such a course; and our own people would be brought down toward the lower level.
It was an appreciation of these possibilities which caused the Congress, during the last session, to write certain sections into the Industrial Recovery Act and the Agricultural Adjustment Act. Subsection (e) of Section 3 of the Industrial Recovery Act gave the Executive power to prevent such competition from abroad: Here is synopsis:
“On his own motion, or if any labor or trade organization, shall make complaint to the President that any articles are being imported in substantial quantities or increasing ratio to domestic production of any competitive articles and under such conditions as to render in [Page 687] effective the maintenance of any code under this title, the President may cause investigation to be made by the Tariff Commission, and if, after such investigation the President shall find the existence of such facts, he shall, direct that the articles concerned shall be permitted entry only upon such terms and subject to the payment of such fees and to such limitations in the total quantity which may be imported (in the course of any specified period or periods) as he shall find it necessary to prescribe. In order to enforce any limitations imposed on the total quantity of imports, in any specified period, of any articles, the President may forbid the importation of such articles unless the importer shall have first obtained a license. Any limitation of entry shall continue in effect until the President shall find that the conditions which led to the imposition of such limitation no longer exists.”
And subsection (e) of Section 15 of the Agricultural Adjustment Act provides compensating duties on articles manufactured from agricultural products.
“During any period for which a processing tax is in effect with respect to any commodity there shall be levied, upon any article processed wholly or in chief value from such commodity and imported into the United States, from any foreign country, a compensating tax equal to the amount of the processing tax in effect with respect to domestic processing at the time of importation. …”
In a very real sense neither of these measures contemplates a change in the present competitive situation. They simply make it possible to limit imports of products made under conditions which fail to meet the standards considered by us to be fair and just.
We shall be the first to join with any nation showing genuine desire for recovery in line with these policies. This should mean, in the first place, a truce, and in the second place, the opening of negotiations looking to the removal of barriers to trade. If the Conference can, through its deliberations, work out the basis for such a program for recovery as is already under way in the United States, the whole trend of international action can be reversed. The drift toward nationalistic economic exclusiveness can be stopped; trade can resume its normal courses; currencies can be brought into better understood relationship with each other; and industrial activity can be resumed. It is our belief that the measures recently taken by this government will not only relieve distress within this country but that taken together they provide the basis for similar relief in all nations.
It is our earnest wish that such a result can be had from the deliberations at London. But the United States has no other recourse than to pursue its present program until a more general international one shall have been worked out by your conference. Roosevelt.