Papers Relating to the Foreign Relations of the United States, 1927, Volume I
The Chairman of the American Delegation to the International Economic Conference ( Robinson ) to the Secretary of State
My Dear Mr. Secretary: I have the honor to lay before you, for presentation to the President, my report as Chairman of the American Delegation to the International Economic Conference held in Geneva.
I wish in particular to express my deep appreciation of the unfailing courtesy and support extended to the Delegation by the representatives of the State Department in Geneva.
I am [etc.]
Report of the Chairman of the American Delegation to the International Economic Conference
The dislocation following the war resulted in instability in currencies, interruption of the usual flow of international credits, reduced production and difficulties of transport across frontiers; it was accompanied by unemployment and impaired purchasing power, with the further result that agriculture suffered from a loss of markets and lack of credits. These adversely affected the standards of living.
The several States, on the theory of protecting individual interests, undertook various devices of relief that in the majority of instances further retarded the natural flow of credits and trade.
The first concerted attack on this multiple problem was made at the Brussels Conference in September–October, 1920.84 The work of this Conference was confined mainly to discussion on the problem of unstable currencies and established fundamental formulae for stabilization that have become effective in all but two important countries.
This Conference was followed by the “Expert Committees” set up by the Reparation Commission and the formulation of the Experts Plan [Page 241] for payment of reparations and the rehabilitation of the German economy.85
Then followed the Conference at Locarno,86 from which resulted the treaties which have tended materially to clarify the political situations in Europe.
It may be assumed to have been in the minds of international political and economic leaders in every country that the need existed of concerted discussion of various factors still contributing to the unstable conditions in Europe. The League of Nations called this International Economic Conference to discuss and advise upon some of the remaining questions.
From the date of the Brussels Conference to the date of this Economic Conference, continuous improvement has been in evidence throughout Europe in practically all social and economic conditions, naturally more marked in some countries than in others.
The Agenda recommended by the Preparatory Committee, and the documentation prepared at its request, has portrayed a condition of distress in Europe which in the view of the Delegation of the United States did not at the time of the Conference obtain in all lines of endeavour. The Agenda was based upon the commercial interdependence between nations, more particularly on the interdependence existing between the different countries in Europe. The facts developed and discussions had at the Conference emphasized not only the necessary interdependence of all the countries of the world, but the interdependence of the several social groups as well.
Within the limits fixed by the Agenda, in the main, discussion and the resultant recommendations revolved around European problems, though the general resolutions, for the most part, have world-wide application. No discussions were had on governmental debts, reparation or movements of population.
The Conference, looking forward rather than backward, confined its attention to tangible problems, viewing nothing as static, with full recognition that the weights of the various factors would change from time to time. Fundamental policies of national economy, such as free trade versus protection and nationalization of resources, were not included in the deliberations of the Conference. Recognizing the definite progress, almost to completion, of the stabilization of currencies on a gold basis, and that tariff levels were less important relatively than the rationalization of tariffs and also that nationalization of resources was more a domestic than an international question, the transactions of the Conference did not include a discussion on these subjects except incidentally.[Page 242]
The Members of the Delegation were greatly impressed with the men who were gathered at this Conference, brought together from every quarter to give their experience and information and contributing on every phase of economic life. Very helpful had been the work of the Preparatory Committee and the Economic Section of the League. This gave direction to the discussions and considerations; and with this start, the Conference, with its Advisors, supplemented and elaborated in a large degree the preparatory work and material.
The Permanent Secretariat of the League had made careful and well organized arrangements and the mechanism provided for carrying on the work of the Conference was admirable and effective.
The Members of the American Delegation were accorded full right and participation in the work of the Conference. The names of the Delegation of the United States, their several responsibilities in, and respective official connections with, the Conference, are set forth in Annex I. The Experts and Advisers of the Delegation of the United States had participation in the discussions and in the preparation of materials for the use of the Conference. The names of the Experts and Advisers who assisted at the Conference and of the Secretary and two Assistant Secretaries of the Delegation are set forth in Annex I.
The Conference developed the value of personal contacts with members of the several Delegations and also with the experts and advisers accompanying them. There were 194 Delegates and a larger number of Experts and Advisers, representing 48 countries. As a result of personal discussions, notable progress in clarification and standardization of the use of technical terms was achieved. Through personal discussions it became possible for the Delegates from different countries to weigh and value points of view of other countries. Furthermore, through personal discussion it became possible for Delegates to better differentiate between economic and political phases of questions.
It might be fair to say that the indirect discussions of the Conference may be of quite as lasting and general benefit as the resolutions passed. Many divergencies of opinion existed between Delegations and with Delegations; but in spite of these divergencies, there were evolved definite formulae for the relief of economic difficulties that still militate against international commerce.
At the opening of the Conference our Delegation was asked to give a statement on the character and probable causes leading up to the relatively prosperous position of the United States. Europe, which possesses rich and varied natural resources, has an area approximately that of the United States. The individual States of our country are geographically and physically as heterogeneous as the different States in Europe; but in trade and industry, we are a homogeneous whole, without barriers or currency differences. Europe, on the other hand [Page 243] has a series of separate units, each contending for national economic independence. Both employers and workers have in the main adopted the policy of unrestricted output; and generally workers have accepted substitution of machines for hand labor, and employers in turn have compensated the workers with appropriate increases in wages. The conditions obtaining in our country have been important factors in the creation and maintenance of higher wage levels, resulting in higher standards of living and, in turn, in greater power of consumption and production. A comparison between the situation in the United States and the European countries has led certain economists to advocate an economic United States of Europe.
It developed in the Conference that “consumers’ goods” were being used, even in Europe, at as high a rate per capita as prior to the war; but the production and consumption of “capital goods” was considerably lower and that this, in the main, accounts for unemployment and, in turn, had reduced wages and purchasing power to a lower level.
The discussion of the Conference further disclosed the fact that if the development of unused or inadequately developed resources throughout the world could be initiated and financed, increased consumption of capital goods would follow, with the result of reduction or elimination of unemployment, and the probable increase in the wage level and consumption of consumable goods.
The Conference divided itself into three committees on Commerce, Industry and Agriculture. Each of these divided itself into subcommittees for specialized discussion. In the Committee on Commerce the discussion revolved largely about trade barriers. A limited discussion on tariff levels disclosed the age old differences of opinion, but at the same time brought out the fact that even more important than relative differences in levels of custom duties was their freqeunt and abrupt alteration. Lack of continuity of policies, differences in the standards of classification, discrimination and other unequal treatments are more injurious than differences in tariff levels. No recommendation was made in respect of tariff levels but the support of all the members was secured approving the principle of “equality of treatment” and the “unconditional most-favored-nation” clause as well as an accord condemning the policy of artificial limitation of raw material exports. The resolutions will also disclose that existing trade barriers would be less harmful if general adoption could be obtained of improvements in practice resulting in simplification of customs formalities, standardization of tariff nomenclature and consolidation of customs charges and other technical improvements.
On rationalization in industry there was a full discussion; the principal differences grew out of the fact that the European workers regarded rationalization as likely to bring about increased unemployment. [Page 244] However, finally agreement was had on a formula based on experience of the countries in which rationalization had been most highly developed. The conference went on record in opposition to indirect and direct states subsidies, but without undertaking critical definitions of the terms, urging that subsidies should not be likely [lightly?] invoked.
In the discussions on Cartels, appeared also differences between workers and operators. In addition to this, the subject was relatively new and untried, so no accurate definition was possible.
We recognize that there are certain physical and geographical conditions in particular situations that might make it desirable and economical for some form of international industrial agreements to be made; but we are apprehensive of the dangers of restricted output and the tendency to monopolistic exploitation. The resolution on Cartels sets out most of the objections and points out that the success of Cartels will be conditional on the character and policies of the Management.
Early experience in the United States in agreements of a similar character resulted in restrictive legislation. Because of this and the conviction that governments would participate in Cartels, our Delegation felt that we could not by our actions approve international Cartels and we took a definite position against international Cartels with Governmental participation.
The Committee on Agriculture adopted resolutions in support of international extension of co-operative marketing, in favor of enlargement of agricultural credits in countries where these are still inadequate and urging the world-wide collection of comparable statistics on production, movement, stocks and consumption of farm products.
The full text of the resolutions reached by the Conference and in each case the degree of agreement reached is shown in Annex 2.87
In conclusion we have appreciatively to acknowledge the contributions of the various departments of the Government in Washington. Before the departure for the Conference, sub-committees were set up to explore the questions set forth in the Agenda on which were experts from the following Departments of the Government, State, Treasury, Commerce, Agriculture, Labor and the United States Tariff Commission. These sub-committees held many meetings before the delegation convened in Washington. Before leaving Washington, the members of the Delegation had two meetings with the expert members of the sub-committees. In the eight days crossing the ocean the Members of the Delegation and the experts accompanying the [Page 245] Delegation held fourteen meetings for the discussion of the documentation of the Preparatory Committee and all the facts and statistics developed by the sub-committees of experts relating to the economic position of the world and particularly with reference to the United States. During the course of the Conference, daily meetings were held, including Delegates and Experts and Advisors, at which the policies of the day were outlined.
We feel that within the limits fixed for discussion and recommendation, the conference has pointed ways for the removal or modification of obstacles to the natural flow of international trade, and for the lowering of costs of production. We believe if the formula evolved should be followed, it will be beneficial to the peoples not only of Europe but of the world. We are convinced that improvement in economic condition in Europe will make for universal peace.
Personnel of the American Delegation
- Mr. Henry M. Robinson.
Member of the Dawes Commission, and President of the First National Bank, Los Angeles.
- Mr. Norman H. Davis.
Formerly Assistant Secretary of Treasury and Under Secretary of State.
- Mr. John W. O’Leary.
President of the United States Chamber of Commerce.
- Mr. Alonso E. Taylor.
Director of Food Research Institute, Stanford University.
- Mr. Julius Klein.
Director, Bureau of Foreign and Domestic Commerce, U. S. Department of Commerce.
Mr. Robinson and Mr. O’Leary served on the Committee on Industry; Mr. Davis and Mr. Klein served on the Committee on Commerce; Mr. Taylor served on the Committee on Agriculture.
Experts and Advisers of American Delegation to the International Economic Conference:
- Dr. Arthur N. Young.
Economic Adviser to the Department of State.
- Dr. E. Dana Durand.
Chief of the Research Division, Department of Commerce.
- Mr. Grosvenor Jones.
Chief of the Finance and Investment Division, Department of Commerce.
- Mr. Louis Domeratzky.
Chief of the Regional Division, Department of Commerce.
- Mr. E. W. Camp.
Commissioner of Customs, Treasury Department.
- Mr. Asher Hobson.
Permanent American Delegate to the International Institute of Agriculture at Rome.
- Dr. Percy W. Bidwell.
An Economist of the United States Tariff Commission.
- Mr. Henry Chalmers.
Chief of the Division of Foreign Tariffs, Department of Commerce.
- Mr. John P. Frey.
Representing the Department of Labor.
- Mr. Somerville Pinkney Tuck.
Consul of the United States of America at Geneva.
- Mr. F. C. Finger.
Representative of the Press:
- Mr. Arthur Bullard.
Dr. Young, Mr. Camp, Mr. Domeratzky, Mr. Chalmers and Mr. Bidwell served on the Committee on Commerce; Dr. Durand, Mr. Jones and Mr. Frey served on the Committee on Industry; Mr. Hobson served on the Committee on Agriculture.
- See Foreign Relations, 1920, vol, i, pp. 88 ff.↩
- See Foreign Relations, 1928, vol. ii, pp. 46 ff., and 1924, vol. ii, pp. 1 ff.↩
- See ibid., 1925, vol. i, pp. 16 ff.↩
- Not printed. The resolutions are incorporated in the report of the Conference adopted on May 23, 1927. See League of Nations, Report and Proceedings, vol. i, pp. 30 ff.↩