ANXIETY IN U.S.A.

Wairarapa Times-Age, 12 April 1939, Page 5

ANXIETY IN U.S.A.

PRESIDENT & MINISTERS CONFER PROPOSED BARTER PLAN BUILDING UP RESERVES OF WAR MATERIALS. MOVE TO STRENGTHEN HANDS OF DEMOCRACIES. By Telegraph—Press Association —Copyright. WASHINGTON,. April 10. Indicating his concern over the European situation, President Roosevelt conferred with Mr Cordell Hull, Secretary of State, and Mr Morgenthau, Secretary of the Treasury, aboard the train immediately he arrived from Warm Springs today. Mr Hull’s anxiety and preoccupation was obvious. He told Press representatives that war threats were keeping business interests hopelessly alarmed. He pointed out that European capital had fled to America in hundreds of millions of dollars, curtailing purchasing power abroad and dislocating trade, with injurious results for everybody. Mr Morgenthau commented similarly, and expressed the opinion that the outlook was gloomy. .He announced that the Treasury’s present working balance was 2,600,000,000 dollars, which was large enough to meet all possible contingencies arising from the present international situation. Mr Morgenthau’s statement lent emphasis to the belief held in other official circles that, unless effective means were devised soon to curb the Nazi and Fascist threats to the world economic structure, a European war was likely to result shortly. Simultaneously Senator Byrnes, the President’s confidante, -revealed the existence of a bold plan, believed to have been inspired by the Administration, to dispose of surplus farm stocks abroad through a barter system designed to give the United -States a huge stock of war materials and at the same time curb Germany’s disruptive trade policies. TERMS OF EXCHANGE. Senator Byrnes revealed the plan after conferring with Mr Hull and the Secretary of Agriculture, Mr Wallace, who endorsed it. Senator Byrnes said that its primary purpose was to exchange the surplus of wheat and cotton for raw materials, such as tin and rubber, which the United States did not possess. However, a high Administration official stated that it was the beginning of an economic axis aimed at regaining the market of Central Europe and South America, lost through Germany’s barter programme. Senator Byrnes announced that the State Department within a few days would open negotiations for barter treaties with Britain, Holland and Belgium, which countries dominate the world’s rubber and tin supplies. Under the treaties which would be ratified by the Senate, a foreign Government would impound bartered cotton and wheat for five years to prevent the price collapsing through dumping. The United States would reciprocate by maintaining reserves of rubber and tin in warehouses for use should war cut off supplies. Two prices would be negotiated; one for exchange, and the other the price at which a nation could release its stocks. American observers said that the scheme would strengthen the hands of England and France in the event of war because the totalitarian States lacked wheat and cotton. WIDE SUPPORT ANTICIPATED. Revealing that the arch-isolationists Senators La Follette, Bennett, and Clark had already given their approval, Senator Byrnes said that the plan should earn the support of the strict neutrality bloc because an adequate stock of strategic materials would precludes the necessity of American ships entering war zones. He added that the British and Dutch were at present restricting the production of rubber by 50 per cent and tin by 40 per cent. He believed that an opportunity to supplement production would appeal to them. The United States War and Navy Departments ’ recommend a minimum reserve of rubber of 266,000 tons, worth 85,000,000 dollars, but Senator Byrnes is urging a year’s supply, 1,250,000,000,000 pounds, plus tin worth 65,000,000 dollars. The United States has at present surpluses of 275,000,000 bushels of wheat and 14,500,000 bales of cotton. These may be expanded to include manganese, phosphates and aluminium. OFFICIAL BACKING AN IMPORTANT FIRST * STEP. WARNING TO AGGRESSORS. WASHINGTON, April 11. A statement issued today by Mr Cordell Hull, Secretary of State, endorsing Senator Byrne’s barter plan made it clear that the scheme has the Administration’s backing. The statement also appeared to confirm the impression that the proposal has far greater implications than the mere disposal of surplus wheat and cotton for the benefit of American farmers. It is now' regarded as President Roosevelt’s first step in accordance with his policy of adopting “all methods short of war but stronger and more effective than mere words” as a warning to aggressors.

Mr Hull explained that the proposal' was that the State Department "should find out whether certain other Governments are willing to enter into exchange with this Government of certain raw materials reciprocally desired for emergency stock purposes and for such purposes only.” Observers quickly noted that under such an arrangement the United States would be in a position to aid the “Stop Hitler” bloc by sending foodstuffs needed badly in the event of war. Thus the programme may accomplish many of the objectives of the controversial Pittman resolution to amend the Neutrality Act by giving the nations which have control of the seas, meaning Britain'and France, ready access to American supplies on a cash and carry basis.

Further, Senator Byrne’s proposal will give the Secretary of State full authority to negotiate such treaties with whatever nations he may select. Since the purpose of the plan is to acquire non-competitive strategic materials, neither of which Germany or

Italy possesses, the Fascist Powers will be excluded from the programme. It was impossible to ascertain tonight whether, in approaching Britain, the sponsors of the plan have anything in mind to obviate the difficulties arising from the existing Australian and Canadian supplies of wheat to Britain. The introducing by the Administration of a resolution authorising the President to impose embargoes and perhaps take over retaliatory action against Japan was discussed today. This step will be part of the campaign to revise the Neutrality Act and an answer to those critics of Senator Pittman’s plan who say that its operation would be to Japan’s benefit and China’s detriment. Another step contemplated is the introduction of a resolution extending the cash and carry provision for a further year. Mrs Roosevelt stated today that her transcontinental lecture lour had convinced her that people were beginning to doubt whether the United States could isolate itself. She encountered much less isolationist sentiment than formerly. "Isolation.” she said, “seems to be a hope, not a possibility.” She found no hatred or bitterness about conditions in Europe, “but people are a little appalled.”