U.S. FOREIGN POLICY

Auckland Star, Volume LXX, Issue 118, 22 May 1939, Page 7

U.S. FOREIGN POLICY

BLOW AT GERMANY.

REPRISAL NAZIS FEAR MOST. PUTTING ON THE ECONOMIC SCREW. (By JOSEPH ALSOP AND ROBERT KIXTNER.) WASHINGTON, April 3. As everyone knows by now, the President wishes to strengthen the democracies by every means short of war. Everyone should also realise that his programme is governed by practical considerations, though the background of decisions is rarely revealed in complete detail. Fortunately, however, the happenings behind the scenes leading to the new tariffs on German goods and to the Brazilian commercial agreement offer a significant study of American foreign policv. Immediately after Hitler seized Czechoslovakia, and as lie was daHy, gobbling up Eastern Europe, the Trca-i sury announced an additional 2-> perj Icen't dutv on German imports to this. |countrv. One able American correspondent! in Berlin described the tariff increase u<: "a stunning blow to German official and particularly business circles." 'I he bulk! iof German* sales here will be subject toj ithe penalties, and experts forecast that; jthc net effect will be to i-luit off «.<m-i jinanv from hor largest market <>vcr.-ea-. ITllis' action i* no mere diplomatic pro-, [test: it is the kind of economic reprisal j Ithat the Nazis fear mo-t.

! Retaliation Move. J I The story of how it came about is ai |simple one, dating back to early fall. [Treasury, Customs and economic experts jwere convinced that Germany was subsidising imports sufficiently to make) mandatory clear-cut retaliation. Complaints were pouring in from American manufacturers, particularly in New England, and from American Federation of Labour leaders, who protested loss of American markets to German-subsidised

goods. Numerous conferences were held, comprehensive analyses were made, and the conclusion was that Germany was (dumping her products. The experts recommended to Secretary of the Treasury. Henry Morgenthau, jun.. that Section '303 of the tariff law of 1930 be invoked. Secretary Morgenthau is an extremely careful fellow, and he wanted: "outside" advice. Private experts who understand the intricate trading system! of the Germans were invited to Morgen-i thau's home. Again, there was agree-j iment that Germany was improperly dumping its goods here. Last November: I Mr. Morgenthau sent to the White' ! House an elaborate memorandum! recommending that this country retaliate; with increased duties. Separation Suspended. j The president was naturally friendly' to the idea of another blow at Hitler. whom he hates with a great passion.' 1 The State Department, however, becameverv excited about the whole business.' Chamberlain was working desperately. to pacifv the dictatorships; the -Peace of Munich"' had been signed and appease-): ' ment was the announced policy of Great,. ■ Britain and France. State Department,< •officials warned that the United States; could not chance even the remote poßsi-|l i ! bilitv that this country arouse Herr.J [Hitler .'igainst the democracies. Alter L Teat deal of argument the President ; acquiesced in the State Department [view, and the wh.de matter was Mdc(tracked to the Attorney-General for a J ilegal opinion. At the same time, a imessage was privately .sent to the, • Department of Justice. '"There is no; jliurry on the opinion. We shall let' ivou know when we want it," it eaid.i jHitlerV. treaty-breaking in Czeeho-j Slovakia and his march through Easternj iKurope ended appeasement, and also; .brought a hurry-up call to the Attorney-; 'General Frank Murphy. The imposi-j It ion of the 2.1 per cent duties was' on March 18. March 18 was! Ithe date of the Attorney-General's-opinion. " i

Red Tape Caution. That the State Department is cautious is not news. But, as it happens;! in our other example on American foreign policy, State Department official* were a great deal less cautious than the careful Mr. Morgenthau. Secretary Moganthau is frankly in favour of an "aggressive foreign policy." He argues 'that our best weapon against Fascism

is our great supply of money and credit. He favours financial aid to the South American countries to increase our trade, and thus hamper Fascist penetration. Brazilian Foreign Minister Oswaldo Aranha was recently in Washington to complete a commercial agreement, in which this country is to :make a £10,000.000 gold loan to' Brazil. Naturally, Secretary Morgenthau was (agreeable, and. in this case, he was siip- ! ported by State Department officials, who urged that the Treasury make a i direct loan to Brazil. "I A loan could he made, it wa* pointed :out, through the Treasury's frtabilisa--1 tion fund, by buying Brazilian currency •with gold and agreeing to hold the curIrenev for a period of years while Brazil redeemed it with regular gold repay - jments. Such a direct Treasury loan 'would be a simple matter. But. as has 'been said, Mr. Morgenthau is a cai«eiui 'fellow, with a healthy respect for reaction- i" Congress. He rclu.tantly told 'the State Department so: "We must 'ask Congress for the authority. I have promised this will be done. and. while it is slower, it must be done that way." Just as a foreign political consideration delayed the new tariffs on German good-, so a domestic political consideration left to Congress whether the Brazilian agreement should include £10.000.000 cash on the barrel-head.— X.A.N.A.