THE ECONOMIC WEAPON

New Zealand Herald, Volume LXXVI, Issue 23320, 13 April 1939, Page 10

THE ECONOMIC WEAPON

"Methods short of war, but stronger and more effective than mere words" are to be employed by the United Stateß against those countries which by ruthless aggression threaten the peace of the world. This was the warning given some days ago by President Roosevelt, and it has now taken more definite shape in the project, officially endorsed, for barter agreements between the United States and the European democracies to facilitate the building up of war-time reserves of foodstuffs and materials. It is proposed to exchange surplus stocks of American wheat and cotton for rubber and tin held by Great Britain, Holland and Belgium, and doubtless if the arrangement proved practicable other commodities would be brought within its scope. Stocks thus exchanged are to be held as reserves, in order that they may not interfere unduly with normal market conditions, but apparently they will be replenished periodically as emergency demands are made on them. The cutting edge of this economic weapon is the exclusion from the arrangement of Germany and Italy, and thus the American plan resolves itself into the imposition of sanctions against the totalitarian States and the establishment of a monopoly in essential supplies for the democracies. Difficulty may arise from the fact that surpluses of such materials as cotton and wheat are not confined to the United States, but in a matter of this sort it should not be beyond the power of statesmen to overcome points of economic rivalry. The tightening grip on supplies may force Germany to accelerate her move toward the oilfields of Rumania and the rich granary of the Ukraine, and in that event the United States might have to back moral pressure with something more physical.