The New Deal and Foreign Trade

by Alonzo E. Taylor

[Macmillan, $2.00]

AT the close of his pamphlet, America Must Choose, Secretary Wallace characteristically expressed his desire to see the whole question of American foreign trade examined by our people in a new spirit, free from the too frequent arguments of the past appealing to fear, to suspicion of neighbor nations, to narrow self-interest, and to ingrained hatred of change. In justice to this critical summary of the Wallace point of view by one of the most formidable of his critics, it may be said that Dr. Taylor is a generous adversary, who nowhere enters either bitterly or with an excess of prosaic materialism into the high ground of this serious and vital controversy.

His criticism of the method of the Wallace proposals and of the spirit of the New Deal is, however, sweeping and detailed. He oilers no substitute for the equipoise of our agriculture in world markets sustained by the continuance of a substantial American foreign trade, the kernel of Secretary Wallace’s effectively reasoned pamphlet. If the world is fundamentally upset, —and this he readily grants,—this solution will not tend to restore its equilibrium, but might, like well-intentioned efforts of other national planners in the past, stifle recovery indefinitely with too much reform which the real world now finds indigestible.

It need not detract from the maturity and completeness of Dr. Taylor’s excellent book to maintain that the Wallace pamphlet still stands, in all essential particulars, when this argument of some leu times its length is concluded. This is partly due to the fact that Dr. Taylor, writing In the interest of what he regards as scientific truth, makes several broad admissions to the Wallace philosophy where he is very evidently profoundly convinced himself.

It is also an impairment of Dr. Taylor’s argument that he singles out for particular censure a principle he attributes to the New Deal in foreign trade which has suffered a very considerable change in the experience of administration since Secretary Wallace put these thoughts on paper some eighteen months ago. This is the strict eon struct ion of bilateralism in foreign-trade bargaining which the Secretary of Agriculture certainly seemed to favor in those days. The Stale Department, however, has steadily led the Administration in the contrary direction ever since. Perhaps the orthodox international trader’s arguments in favor of multilateral trade and generalized agreements which are so vigorously stated in this hook might still irk Secretary Wallace a little, but not nearly so much since his tacit agreement with the Hull policy has brought with it tin’ apparent conviction that rnostfavored-nation methods would work best for agriculture as well as for the rest of our foreign trade.

The facts of a rapidly moving world shatter many a sound point based on recent trends too narrowly interpreted. Dr. Taylor is too thorough a student of world trade to fall often into this error; but his reiterated emphasis on the fact that this country possesses a recent real balance of merchandise transactions on the passive side, in spite of last year’s apparent balance of s 17(1,000,00(1 oil the active side, clearly did not anticipate the present year’s uiajor swing toward a balance in the import column. Even Secretary Wallace must perceive the fact that this year the country is hovering on the edge of that all but unprecedented event, an import balance of merchandise trade. If the test of one’s argument he in seeing a few months ahead in these turbulent times, it was Secretary Wallace and not Ids adversaries who pleaded for a gain of half a billion dollars in our import account as one section of hi.s programme of equilibrium. The trouble is that already during this year—up to September first—we have imported $400,000,000 more of agricultural products than we have exported.

And Dr. Taylor does not begin to exaggerate the troubles Mr. Wallace is going to have with his farmers when that fact sinks deeply into the public consciotisness.

Outside of a somewhat irascible tone, generally expressed in footnotes, this is an admirably objective book, dealing cunpetently with a subject that is susceptible of profound and dangerous misunderstanding. Dr. Taylor admits what lie cannot confute, and confutes mainly transitory phases of the; New Deal in foreign trade in which experience has already changed its direction in line with workable practice along an adjusted ‘middle course. ’