Tombstones & Teasels

In the Kingdom of Denmark these days, the beer bottles must have square labels, because the Government decided that oval ones waste too much paper. In Providence, R. I., stonecutters have refused to cut names into tombstones shipped ready-shaped from Sweden and Finland. And in Britain last week, Food Minister John Strachey told a truly shocked House of Commons that the tea ration might have to be cut, partly because India and Ceylon did not like Government-regulated tea buying.

Western Arithmetic. These are some of the more bizarre symptoms of what ails world trade. This week in Geneva, the representatives of 18 nations* will meet, chiefly to hear what the U.S. thinks can be done.

Robin J. Cruikshank, a sharp-eyed British journalist, told Americans this winter (TIME, Jan. 20) how Europe's ears would be cocked. He asked: "Will Uncle Sam decide to take the expansionist way in the world?" What the U.S. offered at Geneva would be the tipoff: "The first speech of the American spokesman . . . will have all the force of an act, a decisive act."

U.S. Under Secretary of State Will Clayton would go to Geneva with congressional permission to cut U.S. tariffs up to 50%. The U.S. could discuss concessions on as many as 3,500 different items, including abaca, Bibles, goat meat, curling stones, unbleached teasels and zinc dust. Despite some worried special interests at home, Clayton had as clear a mandate to "take the expansionist way" as a U.S. Congress was ever likely to give.

In return, the U.S. wanted a general relaxation of all the trade restrictions thought up by nervous economic planners to make their economics more "secure." And the U.S. wanted the new rules for "freer" world trade written into the Charter of an International Trade Organization (I.T.O.), to act as umpire hereafter.

The return concessions were the rub. People all over the world now believe that governments are responsible for a lot of things--even down to the corners of a beer-bottle label--that used to be none of a government's business. The program for "freer" world trade ran smack into the program for "secure" economic systems.

Eastern Subtraction. The Russians had made their choice. With their own ideas of economic predestination, they would not even be present in John Calvin's grey old city. The postwar deals that Soviet trade chief Anastas Mikoyan has been arranging made it clear that Russian trade would be based on the Kremlin's notions of military security and political expediency--not on old-fashioned consumer demand.

The Czechs would be at Geneva, but they were lukewarm about freer trade. Zdenek Augenthaler, Prague's representative, wanted lower tariffs on the goods the Czechs will spare for the West. But Augenthaler was even more interested in seeing that the new I.T.O. did not discriminate against state trading monopolies.

Certainly the British, led at Geneva by Sir Stafford Cripps, have distinct reservations about freer trade. Once Britain grew one-third of her food, imported the rest. Now, says the Government, Britain must grow two-thirds, because (in the view of the planners Britons elected) the nation must buy less abroad if it is to stabilize its economy. Grain raised at home costs more, but the supply is more "secure."

Or, take cotton. To control imports and foreign exchange--and eliminate old-fashioned risk--the British planners have shut down, presumably forever, the great Liverpool Cotton Exchange, where for decades British buyers and world sellers took the risks and losses and profits of the cotton trade. A British Government commission now does Britain's cotton buying. Britain's spinners now pay more for their cotton than spinners elsewhere with access to free markets, but British planners argue that, if they relax their trade tourniquets too much, the economy may bleed to death.

Global Division. Amidst these grim drifts and doubts, Clayton and the Americans at Geneva hope to slow down the drift toward economic nationalism, and then to let the results demonstrate what they sincerely believe--that capitalism is catching.

But U.S. officials were already noting, in their minds, what might happen if capitalism, in war's aftermath, did not "catch." Said one: "I am convinced there is a most serious question whether we can maintain our private enterprise economy [in the U.S.] if the rest of the world is socialist. . . . We will almost certainly be driven to state trading, at the very least."

Socialism and security are not the only factors working against freer trade. Chemistry ("the science of substitutes") and the export of machinery make it possible for many a once backward nation to dream of self-sufficiency. This technological tendency has been encouraged by the wartime and postwar shortage of transportation. The danger is that in the last two years wartime necessity may have hardened into peacetime policy, and that not even U.S. tariff concessions will be able to unfreeze worldwide restrictions. An expert from one of the "middle powers" at Geneva had this to say, privately, last week:

"I had hope for the success of a world trade conference two years ago, but it has steadily faded. If trade is to be really free, not merely a scaling down of tariffs is needed but a major surgical operation. I see no prospect of that now." To this man, World War III has already begun--not as a shooting war but as a competition between socialism and capitalism. The outcome would depend on how the U.S. harnesses its productivity and distributes its prosperity. If the U.S. succeeded, capitalism would indeed be catching, and the shooting phase need never begin.

In this perspective, the rehabilitation of Britain, Western Europe, and other areas where socialism and capitalism compete becomes much more important than tariffs and Queensberry rules of trade. The world needs more capital, and only the U.S. has any to spare. The British Government is using too much of the U.S. loan to buy tobacco and Hollywood movies because Britain cannot get delivery of the U.S. machines she needs for recovery. Geneva will not free trade between nations unless the level of world production--stimulated by U.S. capital shipments abroad--is on the upswing.

* The 18: Australia, Belgium, Brazil, Britain, Canada, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon (Syro-Lebanese Customs Union), Luxembourg, The Netherlands, New Zealand, Norway, Union of South Africa, the U.S.

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