Big Five v. Big Swapping

Throwing back his broad Scottish shoulders and slightly twitching the muscles of his neck, as he always does before saying something important, Prime Minister James Ramsay MacDonald declared to a roomful of correspondents: "The problem, as I see it, is not merely the recovery of this nation but the restarting of the commerce of the world. We must have a conference to boldly tackle this much bigger problem in all its aspects."

Thus spoke the Scot in May. On July 13 he proposed to President Hoover a World Economic Conference. Out of bales of diplomatic notes to & from nearly all nations of the world, Scot MacDonald's project took form and hatched under the League of Nations' wing. Last week from Geneva he received an invitation to chairman the Conference. London buzzed with rumors that President-elect Roosevelt wanted it to take place in Washington. Mr. MacDonald announced that he accepted Geneva's invitation on condition that the Conference convene in London.

When? Certainly not until after the U. S. and Britain have made their debt bed and are lying in it, if the Prime Minister has his way. Last week he created a special Cabinet subcommittee of five to tug at Britain's end of the debt sheets. The Big Five: 1) the Prime Minister; 2) the Lord President of the Council, bumbling Stanley Baldwin who negotiated and signed at Washington in 1923 the promise to pay $11,000,000,000 over 62 years, from which Mother Britain has been trying to extricate herself ever since; 3) Foreign Secretary Sir John Simon; 4) Chancellor of the Exchequer Neville Chamberlain; 5) President of the Board of Trade Walter Runciman.

"Not For Me." Speeding across the winter-whipped Atlantic to tell this Big Five what President-elect Roosevelt has told him was moose-tall British Ambassador to the U. S. Sir Ronald Lindsay who landed at Southampton this week, rushed to London. Meanwhile the Association of American Correspondents in London was permitted to give a luncheon for Chancellor Chamberlain at which he said: "The British Government is not assuming that the United States is asking any compensation in the forthcoming debt discussions. Our view is that an adjustment of these debts is as much in the interest of the creditor as of the debtor and, therefore, I deprecate the suggestion that the coming negotiations should be regarded as a big swapping deal."

President-elect Roosevelt has indicated that he might swap debt concessions to Britain for British tariff concessions to the U. S. On the contrary Chancellor Chamberlain argued that the U. S., in addition to forgiving Britain much of her debt, should also lower the U. S. tariff wall which he holds in part responsible for Depression. "A system under which it has been possible for the United States to reach its present position cannot be perfect," said Mr. Chamberlain, referring directly to the U. S. protective tariff system. "However, it is not for me to tell the United States what to do."

Asked by his U. S. hosts whether Great Britain stands in a European "united front" to force the U. S. virtually to cancel War debts, Chancellor Chamberlain replied: "We have no understanding with France except that we are signatories with France of the Lausanne convention. If France were dissatisfied with the debt settlement we make with the United States, she would not ratify the Lausanne convention--and that is something we must prevent, for it would throw the whole Lausanne agreement into the melting pot."*

"Empire Content." Chancellor Chamberlain merely talked last week, but President Walter Runciman of the Board of Trade acted, issued an order (effective April 1) which will bar from free or preferential entrance into Great Britain a long list of goods manufactured in Canada or other Dominions which contain less than 50% of Empire materials & labor.

Up to now the Mother Country's standard of "Empire content" has been 25%. On this basis more than 1,000 factories, representing a U. S. investment of over $1,500,000,000 have been operating in Canada (not to mention other Dominions) assembling U. S. parts into finished products of less than 50% Empire content in many cases.

The Runciman decree will make U. S. owners of Canadian factories squawk loudly for help to Franklin Delano Roosevelt, will overhang the Anglo-U. S. debt negotiations, will give Chancellor Chamberlain something more to swap with, should it come to that.

Paradoxically the Canadian branches of Ford and General Motors were highly pleased by Mr. Runciman's decree. They, almost alone of U. S. manufacturers in Canada, have long been building cars of more than 50% Empire content.

* Under the Lausanne agreement of the Allies pledged themselves to collect not more than 1-c- on the $1 of Germany's Reparations debts to them, provided they are proportionately forgiven their War debts by the U. S.

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