The Dominion. THURSDAY, SEPTEMBER 28, 1939. SUPPLIES OF ESSENTIAL WAR MATERIALS

Dominion, Volume 33, Issue 3, 28 September 1939, Page 8

The Dominion. THURSDAY, SEPTEMBER 28, 1939. SUPPLIES OF ESSENTIAL WAR MATERIALS

In the background of a statement by President Roosevelt to a Press conference that he intended to advise Americans not to sell to foreigners crude rubber, manganese, ferro-manganese, pig tin, metallurgical chrome, and other raw materials essential for war munitions, .is an interesting piece of Anglo-American trade history.. In June last, as the result of the increasing tension in Europe, the British and United States Governments signed a barter agreement under which the two countries would exchange cotton and rubber in sufficient quantities for building up “strategic stocks against a war emergency.” The agreement was ratified on June 30. In sending it forward, to the United States Senate the President asked for immediate action in order that it may come into effect, and this country obtain the benefits involved promptly.” In its general terms, the United States Government undertook to supply 600,000 bales of cotton in exchange for ravy rubber to the equivalent value from Britain. The following clause is important:

The intention of the United States Government and of the Government of the United Kingdom being to acquire reserves of. rubber and cotton respectively, against the contingency of a major war emergency, each Government undertakes not to dispose of its stocks (otherwise’ than for the purpose of replacing such stocks by equivalent quantities insofar as may be expedient for preventing de'terioration) except in the event of such an emergency. If, however, either Government should at any future date decide that the time has come to liquidate its stock of cotton or rubber, as the case mav be, it may do so only after (a) consulting the other Government as to the means to be employed for the disposal of such stock, and (b) taking all steps to avoid disturbance of the markets. In no case may either Government dispose of such stocks, except in the case of a major war emergency, before a date seven years after the coming into force of this agreement. This arrangement is an example of the foresight of the British Government in securing essential supplies. Britain had no anxiety about rubber, but adequate stocks of cotton were vital. Although she had her own Empire cotton-growing areas to draw upon, it was essential in building up strategic stocks to make sure of extra quantities from the United States. Other countries were also in the market. Germany, for example, bought up the entire Nicaraguan crop. The idea behind the Anglo-American barter agreement was to extend the sys-tem-to include other items if the test of experience proved satisfactory. The war crisis, however, came too soon for the scheme to be further developed. It seems unlikely, however, that this will now be attempted in view of the President’s statement to the Press conference that the efforts of foreign purchasers to buy stocks of war supplies in the United States “had impeded the Government’s, efforts to acquire reserve supplies of strategic materials.” The significance, of the agreement, however, is the indication it afforded of the recognition by the two countries of a community of interest in making provision for a war emergency. ,