Foreign Relations of the United States, Diplomatic Papers, 1933, General, Volume I

550.S1/952: Telegram

The Chairman of the American Delegation (Hull) to the Acting Secretary of State

London, June 13, 1933—8 p.m.
[Received 9:25 p.m.⁵¹]

28. My No. 26, June 13, 3 p.m.⁵² Following is final draft of my speech which is not to be released until receipt of Associated Press flash “Hull speaking”.

“Mr. Chairman: It is appropriate

1. That the nations should meet in this great capital to deal with the crisis which besets them all. The compelling necessity for the present meeting of chosen representatives from 65 nations has been demonstrated by disastrous experience. The whole panic ridden world is looking to this Conference for leadership with a program of basic relief and every participant here must realize at the outset that distressed peoples in every land expect concord, cooperation and constructive results from these proceedings. The success or failure of this Conference will mean the success or failure of statesmanship everywhere and a failure at this crucial time would long be conspicuous in history.

2. It is universally agreed that economic calamity with attendant losses, sufferings and hardships unparalleled in our time have for 3½ years afflicted each nation and the world in common. Depleted treasuries, collapsed price levels, a destroyed international finance and commerce, greatly diminished domestic production and consumption, 30 millions of unemployed wage earners, a prostrate agriculture, universal monetary and exchange instability, mountainous debt and tax burdens constitute some of the awful panic experiences of recent years. The people of all nations now realize that despite unbounded opportunities they are actually worse off and more insecure than they were 12 years ago and that the necessity for new policies and new leadership is obvious and urgent.

3. This is a Conference of representatives of sovereign governments; I have absolute faith in its complete ability, power and disposition to move the world and this it will accomplish if it promulgates a program which in conjunction with suitable domestic programs everywhere will restore confidence, employment and full and stable prosperity alike in every country. We would be false to the trust reposed in us by the anxious audience of humanity elsewhere if this great tribunal were complacently to adjourn with the humiliating implication that we are incapable of providing new policies at all and that the same nation-destroying, world-wrecking economic policies that have been in operation since the war must continue.

4. If we are to succeed narrow and self defeating selfishness must be banished from every human heart within this Council chamber. If, which God forbid, any nation should obstruct and wreck this great Conference with the short-sighted notion that some of its favored interests might temporarily profit while thus indefinitely delaying aid for the distressed in every country that nation will merit the execration of mankind.

5. Ignoring all realities all nations have strenuously pursued the policy of economic isolation each futilely and foolishly striving to live a hermit’s life.

6. The cherished idea of the extreme type of isolationist that each nation singly can, by bootstrap methods, lift itself out of the troubles that surround it has proven fruitless. Each nation by itself can to a moderate extent restore conditions by suitable fiscal, financial and economic steps. Thus the administration of President Roosevelt has within 3 months adopted an effective domestic program to promote business improvement in the fullest possible measure. The equal necessity for an equally important international economic program of remedies is clear. A brief examination of existing problems and conditions and the underlying influences chiefly responsible for their creation sustains this conclusion.

7. When every nation is visited by disastrous panic it is for the isolationist a mere coincidence. For him no panic has an international character, cause or cure. He credulously believes that the present depression just happened to come upon all countries at the same time and that despite demonstrated failure to do so since 1929 each by its own local program can at will restore full prosperity.

8. Economic nationalism as practiced since the war comprises every known method of obstructing international capital and trade such as high tariffs, quotas, embargoes, exchange restrictions and depreciated currencies. Many governments by manifesto are constantly changing their tariff and other obstructions so that their utter lack of stability is seriously destructive of business. These trade barriers inevitably caused a disastrous reaction upon production, employment, prices and distribution within the confines of every nation. Under the ravages of these combined methods of extremism uncounted millions of people are starving in some parts of the world while other parts are glutted with vast surpluses. Raw materials are fenced off from factories, factories from consumers and consumers from foodstuffs.

9. How many nations can get along without world trade? The indispensable nature of international commerce is better understood when we recall that most Latin American countries ordinarily sell abroad from 30 to 85 percent of their total production of movable goods; England must sell 25 percent; Germany 30 percent; Canada 30 percent; Australia 30 percent; New Zealand 40 percent and Japan 45 to 60 percent. A serious decline of the international market can cause a severe impairment of the economic and financial life of these large exporting countries and this in turn dislocates all foreign trade and as has been demonstrated during this panic cuts deeply into all production and throws tens of millions of wage earners out of employment.

10. The strangulation of international trade from more than 50 billion dollars the amount it should be according to the pre-war rate of annual increase down to a rate less than 15 billion dollars reveals a most tragic phase of this short-sighted and ruthless policy. An international transaction has become an exception rather than a rule. Each country proposes to sell but not to buy, to export but not to import and to get rich at the expense of the other.

11. The inevitable effect of these contradictory practices has been to reduce to the lowest level all prices of primary commodities bought and sold in world markets with similar effects upon commodity prices back in each country. The inability of peoples in different countries to transfer goods in payment of balances strains all domestic financial structures. Currencies and exchanges become unstable. These practices offensive and defensive have forced business in every nation to an artificial basis and plunged the world into economic war.

12. The more extreme proponents of these disastrous policies in operation during the post-war period in a spirit of mistaken selfishness or unreasoning fear have insisted strenuously upon the very minimum of economic contacts with other nations. Their slogan has been the talismanic word “prosperity” and each nation living by itself was to grow rich and the people everywhere were to wax fat and be clothed in purple and fine linen. In their eyes it was unpatriotic not to buy homemade goods regardless of costs.

13. In the making of tariffs thought was given only to the safeguarding of the home market even to the extent of protecting the more inefficient individual businesses, inefficient industries, and industries clearly not justifiable economically. No serious thought was given the disposition of surplus production through exchanges. The home market was to be kept separate from the world market and prices bearing no relation to those of other countries would be fixed arbitrarily within each nation.

14. Has not the time come for governments to cease erecting trade barriers with their excesses, rank discriminations, and hate breeding reprisals and retaliations?

15. Honest intelligence now compels the admission that nations are substantially interrelated and interdependent in an economic sense with the result that international cooperation today is a fundamental necessity. The opposing policy of self-containment has demonstrated its inability either to avoid or arrest or cure the most destroying depression in all the annals of business.

16. This Conference should proclaim that economic nationalism as imposed upon the various nations is a discredited policy; and from those who insist that the world should continue in this discredited policy the Conference must turn aside. Many measures indispensable to full and satisfactory business recovery are beyond the powers of individual states. The extreme difficulty is manifest of one nation by itself undertaking largely to reduce its tariffs or to remove exchange restrictions or to stabilize its exchange and currency or to restore the international financial credit and trade structure.

17. It is equally true that mutually profitable markets could only be obtained by the liberalization of the commercial policies of other countries and this is only possible by the simultaneous action of all governments stabilizing exchange and currencies and reducing to a reasonable extent trade barriers and other impediments to commerce between nations.

18. This Conference must formulate plans to deal effectively with these difficulties. Satisfactory conditions of peace and prosperity and human progress itself require the maintenance of a growing international commerce. The Conference must make clear whether civilized countries can ignore this economic fact and shirk the duties which such fact imposes.

19. Let me here reassert the principle that trade between nations does not mean the displacement of established home production and trade of one country by that of another. International trade is chiefly barter of a mutually profitable exchange of surpluses by different countries either directly or in a triangular manner. It specially contemplates too that an enterprising nation goes out into the world and locates and develops new markets for the goods it effectively produces. The gradual and careful readjustment of the excesses of tariff and other trade barriers to a moderate level would not contemplate either unreasonable or excessive competitive imports against efficient domestic industry operated under normal conditions on the one hand nor monopolistic price advantages at home on the other. This policy if practiced generally among the nations would insure healthier and more prosperous conditions in all industry at all efficient in every country. This broad program while disclaiming extreme economic internationalism on the one hand would challenge extreme economic nationalism on the other and launch every nation upon a sane practical middle course. It would reciprocally supplement efficient home markets with capacious foreign markets. In no others half so feasible can the present 30 millions of unemployed wage earners be returned to work nor bankrupt agriculture be restored to solvency nor famished industry be brought back to normal.

20. The world cannot longer go on as it is going at present. A successful meeting of this Conference in my judgment is the key to widespread business recovery. While it is true that at the present time there does not exist a sufficiently informed public opinion in support of a necessary program of international economic co-operation it is my firm conviction that the losses and sufferings of peoples in every country have been so great that they can soon be aroused into aggressive support of such a program.

21. The first and greatest task at the present juncture is the development here in this hall of a will and a determination on the part of nations vigorously to advocate this course. Thereafter plans and methods will readily take form. My firm prayer therefore, is for a spirit of co-operation necessary to create a unified leadership and program in this Conference that will carry hope to the unnumbered mil-ions in distress throughout the world. A preliminary step indicative of sincere purpose would be the immediate general adherence by all the participating governments to the tariff truce already agreed to by at least a dozen countries to continue to the end of this Conference. The full program should comprise a succession of methods and plans of international co-operation.

22. All excesses in the structure of trade barriers should be removed, all unfair trade methods and practices should be abandoned, the nations should attack these conditions and problems simultaneously and by as many effective methods as we can devise. In the monetary field suitable measures must be taken to provide for an immediate policy which will give the greatest possible measure of stability for the period during which the groundwork will be laid for enduring reform. Simultaneously all the nations must stimulate the natural sources of employment, restart the wheels of industry and commerce and so build up consumer power that a rise of the price level will of necessity follow.

23. Then the Conference must face the vexing problem of a permanent international monetary standard and lay down the proper function of the metals, gold and silver, in the operations of such a standard in the future.

24. Coincident with the immediate and the ultimate monetary problems there is the necessity of taking measures for the removal of restrictions upon foreign exchange dealings. This may involve a balance sheet reorganization of certain countries. The American delegation is prepared to offer concrete suggestions in regard to all these questions.

25. The nations which sent us here are interested above all else in peace and prosperity and prerequisite of either is a wise readjustment of economic policies. Economic conflicts with some exceptions are the most serious and the most permanent of all the dangers which are likely to threaten the peace of the world. Let this great Conference, therefore, proceed to the herculean task of promoting and establishing economic peace which is the fundamental basis of all peace.”

Hull

51. Telegram in twelve sections.
52. Not printed.