Letter to the National Foreign Trade Council.

My dear Mr. Thomas:

I am delighted to have this opportunity of sending my warm greetings to those assembled at Houston for the National Foreign Trade Convention. It is a matter of sincere regret to me that it has proved impossible to address you over the radio, as I had hoped and planned. Instead, may I send you a personal message by this letter?

The American people, I am sure, share my pride in the self-reliance and alertness of you who are engaged in export and import trade and related occupations. It is the knowledge that you will take full advantage of any new opportunities for expanding our foreign trade that encourages the Administration in concert with other Governments to press forward with its efforts to bring about a relaxation of governmental restrictions which now throttle international commerce.

It is peculiarly fitting that you should hold your Convention in a State whose two principal products—cotton and petroleum —afford striking examples of our dependence upon foreign markets. In this country, we use only about two-fifths of our normal cotton crop. Many other areas of this country produce agricultural or industrial commodities in excess of our domestic needs. But foreign trade is not merely the concern of particular localities and industries. It is essential to the Nation as a whole since the prosperity of each section of this country depends upon the prosperity of other sections. All of us who desire a prosperous America have a vital stake in a sound solution of your difficulties.

The full reward of America's high productive capacity is only gained when our business men and our farmers can sell their surpluses abroad. This is true of every great surplus-producing Nation. As every producer knows, it is not merely the value of his foreign sales which is lost when he is left with an unmarketable surplus on his hands. The value of his entire production is seriously impaired. In turn, every producer in the country suffers from the resulting repercussions. The fall in our exports from over five billion dollars in 1929 to little more than one and a half billion dollars in 1932 was but a part of the huge loss in trade shared by all the Nations of the world. No Nation has escaped the intense human suffering and unprecedented unemployment which accompanied the collapse of both home and foreign trade during these years.

We, as well as every other Nation, must develop our domestic economy in every profitable way. Foreign markets must be regained if American producers are to rebuild a full and enduring domestic prosperity for our people. There is no other way if we would avoid painful economic dislocations, social readjustments, and unemployment. In rebuilding our foreign markets we cannot afford to lose sight of the fact that a market only exists because people buy as well as sell. In the long run a Nation's sales are inescapably limited by its purchases. This does not mean an unprofitable exchange of goods. It means that each country has something it desires to sell which other countries find it desirable and profitable to buy. It is in this sense and to this extent that we must import. We import in order that we may be paid for our exports with foreign materials and goods in much the same way as the farmer exchanges his products with the country merchant for those articles which he needs and cannot produce economically on the farm.

International trade today is being throttled not only by prohibitive duties, but also by import quotas and other trade control measures. These highly arbitrary restrictions prevent the flow of trade through normal and most profitable channels. The growing cost both to the United States and to other Nations is becoming intolerable. World trade for the profit of all must be liberalized and freed from discriminatory practices. There must be a return to fair and friendly trade methods. We cannot accomplish this alone. The only practicable way to assure American trade of protection against injurious trade barriers in foreign countries is to join with these countries in a concerted effort to reduce excessive trade restrictions and to reestablish commercial relations on a non-discriminatory basis. This is the kernel of the American trade agreements program.

Hard experience is driving business men all over the world to similar conclusions. The International Chamber of Commerce at its meeting in Paris last June voted its general approval of the principles upon which the American trade recovery program is built, and urged "that bilateral trade agreements with the strict observance of the unconditional most-favored-nation clause be negotiated as rapidly as possible."

The Governments of the world also are coming to realize these inescapable truths. In September of this year representatives of more than fifty Nations meeting in Geneva declared that the "removal of impediments to the exchange of goods" is "indispensable" for economic recovery, and recommended that commercial agreements should be negotiated "upon the principle of the most-favored-nation clause."

The American program stands out today in the 'eyes of the world as a definitely constructive program designed to combat the tendency toward excessive national self-sufficiency and the depressed standards of living which extreme economic isolation inevitably entails.

Furthermore, if we would build constructively for peace, we must build upon economic foundations which are sound; and sound economics requires liberalized trade. America stands ready to go forward with other Nations in this great movement.

Very sincerely yours,

Eugene P. Thomas, Esq.,

Chairman, National Foreign Trade Council,

Rice Hotel,

Houston, Texas