The First Step

In London last week, the seemingly incredible happened. With hardly a mussed hair, a United Nations conference of 17 countries, this time on foreign trade, came to an end with a tentative agreement on the basic policies for a world trade charter. In general, the charter, preparatory to a full-dress conference later, followed the broad lines suggested by the U.S.

This was not quite the victory for the U.S. it seemed. Actually, it meant that the U.S. had succeeded only in persuading other nations to waive their doubts (tentatively) of U.S. economic stability. As these doubts were substantial, this was a major accomplishment.

In effect, the other nations gave the U.S., and the incoming Republicans, until next summer, when U.N. will discuss specific tariff cuts, to prove that the U.S. can and will 1) maintain a reasonably stable economy and 2) practice to the fullest the free trade it preaches. In turn, the U.S. hopes that by then nations which are either wholly or in part state traders, e.g., Russia, which did not attend the conference, and Britain (see Commodities), can somehow reconcile their ideas with those of the U.S.

Brass-Knuckle Talk. But no one, least of all U.S. businessmen, thought that the job the U.S. had set out to do was a small one. Talk of how to do it, like exports, was at an all-time high. In Manhattan alone there were over 40 speeches on foreign trade in the last fortnight. Probably the most brass-knuckled talk was that of William E. Knox, 45, world-minded president of Westinghouse Electric International Co. Said he to Manhattan exporters :

" 'Foreign trade,' in the present postwar world, has no relation to real foreign trade. . . . The nation is shipping abroad materials of all kinds, but we are receiving promises to pay and very little else from debtors whose ability to pay is questionable. Calling this trade is to perpetuate a myth. Trade consists in swapping something you have for something you want. We must supply capital goods . . . technical assistance and know-how to other nations to help them help themselves, and to strengthen their economies." (Westinghouse is now doing this by selling plans and know-how to China for a $35 million manufacturing plant.)

This can best be done, said he, not by overall policies laid down by the Federal Government alone and "sold" to exporters as to foreign countries, but by an American Board of Foreign Trade set up by Congress, with representatives of both industry and Government drafting U.S. trade policies and the means to implement them. Only by speeding up the flow of imports to pay for U.S. exports can "we talk about foreign trade honestly and without using quotation marks . . . find a way to be paid in some other form than with more I.O.U.s."

Brass-Knuckle Facts. Thanks to the volume of U.S. exports, greatest in history, foreign trade was indeed getting towards the I.O.U. stage. Exports, up some 300% over prewar, are now at a rate of $10 billion yearly, while imports, though double prewar, are still lagging at $4.6 billions. This top-heavy unbalance has reduced gold and dollar reserves of foreign nations from $17 billion in 1944 to $6.4 as of last June. Warned Electric Bond & Share's board chairman, Curtis E. Calder in Knox-like tones: unless the U.S. drastically increases its overall imports, the "gap will be filled either by denuding our customers of their limited resources, or by providing them, through loans or gifts, with additional purchasing power."

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