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Full text of "Department of State bulletin"

iliiiii!i!|iiiiip 



THE DEPARTMENT OF STAT 




T 
U 





1 T" 




VOL. Xn, xAO. 301 



APRIL 1, 1913 



In this issue 



RENEWAL OF TRADE AGREEMENTS ACT 

INTERIM COMMISSION ON FOOD AND AGRICULTURE 

Messages of the President to the Congress 

"BUILDING THE PEACE" 

America's Good Neighbors 
Foreign Affairs Outlines 

THE MEXICO CITY CONFERENCE AND THE INTER- 
AMERICAN SYSTEM 
By Dana G. Munro 

THE WORK OF THE CULTURAL-RELATIONS ATTACH^ 
By Morrill Cody 



-Vi«^NT o*. 




^-IXES o^ 



For complete contents 
see inside cover 



U. S. SUPERirfTENDENT OF DOCUMENTS 

MAY 7 1945 



THE DEPARTMENT OF STATE 

BULLETIN 



VoL.Xn • No. 301 • 




PrBi.iCATius 2312 



April J, 1945 



The Department of State BULLETIN, 
a weekly publication compiled and 
edi ted in the Division of Research and 
Publication, Office of Public Affairs, 
provides the public and interested 
agencies of the Government trith 
information on developments in the 
field of foreign relations and on the 
work of the Department of State and 
the Foreign Service. The BVLLETIIS 
includes press releases on foreign 
policy issued by the White House and 
the Department, and statements and 
addresses made by the President and 
by the Secretary of State and otlter 
officers of the Department, as well as 
special articles on various p/insps of 
international affairs and the functions 
of the Department. Information con- 
cerning treaties and international 
agreements to which the United States 
is or may become a party and treaties 
of general international interest is 
included. 

Publications of the Department, 
cumulative lists of whichare published 
at the end of each quarter, as irell as 
legislative material in the field of inter- 
national relations, are listeil currently. 

The BULLETIN, published with the 
approval of the Director of the Bureau 
of the Budget, is for sale by the Super- 
intendent of Documents,Uni ted States 
Government Printing Office, Wash- 
ington 25, D. C, to whom all pur- 
chase orders, with accompanying 
remittance, should be sen I . The sub- 
scription price is $3.50 a year; a single 
copy is 10 cents. 



Qontents 



Page 

Amehican Republics 

The Mexico City Conference and the Inter- American 

System. By Dana G. Munro 525 

Declaration of War by Argentina Against Germany and 

Japan 538 

Change in Name of the Office of the Coordinator of Inter- 
American Affairs 685 

EUROPF. 

Discovery of Nazi Post- War Plans 637 

The Allied Commission for Italy: Transcript of Remarks by 

the Acting President of the Allied Commission for 

Italy 539 

Announcement Regarding Communications Facilities With 

Bulgaria and Rumania 546 

Disappearance of American Citizens Deported by Germans 

From Occupied Areas 577 

Fourth Anniversary of Constitution of New Government of 

Yugoslavia 677 

Cultural Cooperation 

The Work of the Cultural-Relations Attach^. By Morrill 

Cody 574 

Economic Affairs 

International Cotton Advisory Committee: Designation of 

Representatives to Fourth Meeting 545 

Combined Reappraisal of Supply and Requirements: Joint 
Statement by the Department of State and the British 
Embassy 546 

Bretton Woods. Address by Charles P. Taft 578 

Peace and Economic Policy. Address by Charles O'DonneU. 580 

General 

Death of David Lloyd George 538 

Post-War Matters 

Meeting of the Committee of Jurists 533 

"Building the Peace". America's Good Neighbors .... 547 
Dumbarton Oaks Proposals: 

Question Concerning Representation in the Assembly of 

the Proposed United Nations Organization 530 

Basic Data on the Dumbarton Oaks Proposals: 

Announcement by the Department of State 555 

Foreign Affairs Outlines on ''Building the Peace": 

Outline Number 1. War — How Can We Prevent It?. 558 
Outline Number 2. Prosperity — How Can We Pro- 
mote It? 562 

Outline Number 3. Social Progress — How Can We 

Work for It? 566 

Outline Number 4. Freedom — How Can We Achieve 

It? 570 

United Nations Conference on International Organization: 

Invitations Extended to Syria and Lebanon 576 

Acceptance of Invitation to the Conference by 37 Gov- 
ernments 676 

{Continued on back cover) 



The Mexico City Conference and the Inter- 
American System 



By 
DANA G. MUNRO 



ONE OF THE CHIEF purposcs of the Inter- Amer- 
ican Conference on Problems of War and 
Peace was to strengthen the inter-American sys- 
tem and to consider its relationship to the world 
Organization outlined in the Dumbarton Oaks 
Proposals. For five years, since the outbreak of 
the war in Europe, the governments represented 
at the conference, and this included every Amer- 
ican state except Argentina, had been working 
together to protect their common interests. Since 
Pearl Harbor, they had been contributing actively 
to the war effort, and by the time when they met 
at Mexico City all the republics represented had 
entered the conflict as belligerents. The problems 
which were arising as the result of this partner- 
ship and the prospect that other complicated 
problems would arise in the post-war era made 
it necessary to consider whether still more effec- 
tive means for cooperation could not be devised. 

The system of treaties and institutions and 
agencies which form the framework of inter- 
American cooperation had its formal beginning 
with the First Pan American Conference in 1889. 
This meeting set up the International Bureau of 
American Republics, which later became the Pan 
American Union, and adopted agreements deal- 
ing with compulsory arbitration of pecuniary 
claims, inter-American trade, and sanitary prob- 
lems. Subsequent conferences, meeting in nor- 
mal times at five-year intervals, continued to work 
along the same lines, and gradually expanded 
their activities into broader fields of common 
interest. 

At first the practical results of inter-American 
cooperation were not very great. There were 
bitter controversies between several of the Latin 
American countries, and throughout the continent 
there was dislike and suspicion of some of the 
policies of the United States. Many of the other 
republics, furthermore, had closer commercial and 



cultural ties with Europe than with us. As time 
went on, however, these obstacles to cooperation 
tended to disappear, and there was a growing 
realization that the American nations, despite 
differences in language and culture, had common 
aspirations and interests which made pan-Ameri- 
canism something more than a vague ideal. They 
all believed in the pacific settlement of inter- 
national disputes and in the sanctity of treaties, 
and successive inter-American conferences ex- 
pressed their adherence to these principles. 
They also believed in democracy, even though it 
was clear that social conditions in many of the 
American states would make the achievement of 
democratic government a long and painful process. 

A realization of these common interests was 
evident during the first World War, when the 
majority of the other republics of the continent 
either broke off relations with the Central Powers 
or, in several cases, declared war. It again be- 
came evident when the basic principles of Ameri- 
can political life were challenged by the rise of 
Fascism and National Socialism in Europe. It is 
true that there were groups in manj' of the 
American countries for whom totalitarian doc- 
trines had a strong appeal. Som.e military leaders 
were influenced by the success of German arms, 
and some vested political interests saw in Fascism 
a possible means of retaining power in the face 
of growing pressure from more liberal elements. 
But among the great majority of people the re- 
action was much the same in Latin America as 
in the United States. The rise of the Fascist 
menace consequently drew the nations of the con- 
tinent closer together than ever before. 

Cooperation in the war effort set up a new rela- 
tionship between the American nations and created 
many new problems. Many of these could be dealt 

' Dr. Munro is Special Adviser to the Director of the 
Office of American Republic Affairs, Department of State. 

525 



S26 



DEPARTMENT OF STATE BULLETIN 



with through normal diplomatic channels, but 
others required consideration by the American 
republics as a group, and it was to deal with 
matters of this latter type that the Conference 
on Problems of War and Peace met in Mexico 
City in February 1945. The work of the con- 
ference covered a wide range of subjects. This 
article will discuss only that part of it which 
related to the political relations between the coun- 
tries of the liemisphere and the organizational 
framework of the inter-American system. Three 
of the agreements reached — the Act of Chapulte- 
pec, the resolution entitled "Reorganization, Con- 
solidation, and Strengthening of the Inter- Ameri- 
can System", and the resolution on the world 
Organization — were especially important. 

The Act of Chapultepec,= by which the Ameri- 
can republics agreed to defend one another against 
aggression from any source, went further toward 
joint action for mutual defense than any previous 
agreement. The elimination of the use of force 
in international relations had been a major ob- 
jective of each inter-American conference since 
the first one in 1889, and several treaties had been 
signed establishing machinery to assure the peace- 
ful settlement of disputes. At the Lima confer- 
ence in 1938 these treaties were supplemented by 
an agreement for consultation with a view to 
common action if the peace and security of any 
American republic was threatened. The Meeting 
of Foreign Ministers at Habana in IQiO went fur- 
ther and declared that any attempt on the part of 
a non-American state against the integrity or in- 
violability of the territory, the sovereignty, or the 
political independence of an American state would 
be considered an act of aggression against all the 
American states.' The American republics had 
thus expressed their determination to stand to- 
gether against any attacks from outside of the 
hemisphere, and the prompt and effective help 
which the other American nations gave the United 
States in the dark days after Pearl Harbor showed 
how real this determination was. Neither the 
declaration of Lima nor the resolution of the Ha- 
bana confei'ence; however, afforded any definite 
assurance of support to an American state attacked 
by another American state. 

Before the Mexico City conference some of the 
other American governments had proposed a gen- 

' BuiiETTN Of Mar. -1, 1945, p. 339. 
• BuiiETi.N Of Aug. 24, 1940, p. 136. 



eral guaranty against aggression, and the United 
States Government had expressed its approval of 
the general idea. The need for such action was 
perhaps more evident than at any other time in 
recent years. In a few countries internal political 
dis.sentions and the economic dislocation caused by 
the war had increased the influence of ultra- 
nationalistic, militarist groups whose activities not 
only endangered democratic government in their 
own countries but also aroused distrust and alarm 
in neighboring states. There was more than a 
possibility that such groups might be tempted to 
stir up international controversies or even to pre- 
cipitate conflicts with other countries as a means of 
gaining or retaining power. An assurance that 
all of the other countries would oppose such moves 
would obviously strengthen the hands of the demo- 
cratic elements and would make it easier for all of 
the American republics to concentrate their efforts 
on the prosecution of the war. 

Uruguay and Colombia presented carefully 
worked out proposals for a guaranty of territorial 
sovereignty, and these proposals, with less detailed 
projects from other delegations, were combined by 
a subcommittee of the conference into a project 
which was laid before the Committee on Inter- 
American Organization. In its original form this 
provided for a pledge by all of the American states 
to use any necessary measui-es, including force of 
arms, to check an aggression by one state against 
another, and it made action by all of the American 
nations obligatory if a majority of the 21 govern- 
ments voted that action should be taken. The 
American Delegation was not able to accept the 
resolution in this form, but after prolonged dis- 
cussions, in which Senators Connally and Austin 
wei'e especially helpful, a new formula was agreed 
upon. 

The Act of Chapultepec as finally adopted com- 
prises three sections. Part I declares that all 
sovereign states are juridically equal, that every 
state has the right to respect for its individuality 
and independence, and that 

"every attack of one State against the integrity 
or inviolability of the territory, or against the 
sovereignty or political independence of an Amer- 
ican State, shall ... be considered as an act 
of aggression against the other States which sign 
this Act. In any case invasion by armed forces 
of one State into the territory of another tres- 
passing the boundaries established by treaty and 



APRIL 1, 1945 



527 



demarcated in accordance therewith shall consti- 
tute an act of aggression." 

The declaration lists a number of steps which 
may be taken to prevent aggression, ranging from 
the recall of chiefs of diplomatic missions through 
the suspension of economic relations to the use of 
armed force, and provides that the signatory 
countries will consult in order to agree upon such 
steps as may be necessary to check any threats or 
acts of aggression during the war period. Both 
the United States and the other American coun- 
tries could properly agree to action of this char- 
acter while the war continues because all of the 
countries signatory to the agreement are Allies, 
and an attack on any one of them would be an 
interference with the common war effort. The 
act thus is in effect as a pledge of support, now 
and so long as the war continues. 

Part II recommends the conclusion of a per- 
manent treaty establishing procedures whereby 
threats or acts of aggression may be prevented. 
The scope of this treaty is not defined, because it 
will of course have to be drafted in such a way 
as not to conflict with any obligations which may 
be assumed by the American nations in a world 
security organization. This fact is brought out 
in Part III, which declares that the act consti- 
tutes "a regional arrangement for dealing with 
such matters relating to the maintenance of inter- 
national peace and security as are appropriate 
for regional action in this Hemisphere", and pro- 
vides that "The said arrangement, and the perti- 
nent activities and procedures, shall be consistent 
with the purposes and principles of the general 
international organization, when established." It 
will be recalled that the Dumbarton Oaks Pro- 
posals contemplate the existence of "regional ar- 
rangements". 

The Act of Qiapultepec has been hailed tlirough- 
out Latin America as the outstanding achieve- 
ment of the conference. This general approval 
is a striking indication of a new spirit in inter- 
American relations. An agreement contemplating 
joint armed intervention in conflicts between 
American governments would have been almost 
unthinkable a few years ago because each govern- 
ment, including that of the United States, would 
have been too jealous of its freedom of action and 
because many of our neighbors would have feared 
to afford any possible pretext for interference in 



their affairs by the United States. We have come 
a long way from the time when we ourselves re- 
jected proposals for cooperative action in inter- 
preting and applying the Monroe Doctrine and 
when the Doctrine was regarded with suspicion by 
our neighbors as a possible cloak for North Ameri- 
can aggression. 

This change in the spirit of inter-American re- 
lations was also evident when the conference ap- 
proached the question of improving the machinery 
of inter-American cooperation. During the war 
years this machinery had become far more complex. 
The Meetings of Foreign Ministers had provided 
a new means for consultation in emergencies. Sev- 
eral special agencies had been created to deal with 
•problems which required continuous considera- 
tion. The Inter-American Financial and Eco- 
nomic Advisory Committee, the Inter-American 
Defense Board, the Emergency Advisory Com- 
mittee for Political Defense, and the Inter -Ameri- 
can Juridical Committee were perhaps the most 
important of these, and there were many others 
working in various fields. Most of these were set 
up to meet the urgent needs of the war period, but 
it was clear that some of them would have a perma- 
nent value and that other new agencies should be 
created to deal with post-war problems and with 
the problems of the transition period. It was also 
evident that there was need for more effective 
means through which the American governments 
could coordinate and guide the work of the inter- 
American system as a whole. 

Several countries had presented proposals deal- 
ing with phases of this problem, and Mexico and 
the United States had prepared comprehensive, 
detailed draft resolutions covering the whole sub- 
ject. There was naturally some difference of views 
as to the action which should be taken, but these 
views were harmonized in negotiations in which 
Assistant Secretary Rockefeller played a leading 
role. The result was the resolution on the "Re- 
organization, Consolidation, and Strengthening 
of the Inter- American System".* 

This agreement seeks to coordinate and to make 
more eilicient the various agencies through which 
the American nations have worked together in 
dealing with matters of common interest. In the 
first place, it provides that the International Con- 
ferences of American States shall meet every four 



' Bdixetin of Mar. 4, 1945, p. 341. 



528 



DEPARTMENT OF STATE BULLETIN 



years instead of every five years, and that the 
next one shall meet in Bogota in 1946. These con- 
ferences formulate most of the general treaties, 
and they establish the basic principles which gov- 
ern the joint action of the American states. In 
the second place, the resolution provides that reg- 
ular meetings of the Ministers for Foreign Affairs 
shall be held annually, in the intervening period, to 
take "decisions on problems of great urgency and 
importance concerning the inter-American system 
and with regard to situations and disputes of every 
kind which may disturb the peace of the American 
Republics". These meetings are less formal and 
require less preparation than the hirger confer- 
ences. They have been one of the chief means 
through which the American republics have been 
able to maintain a united front during the present 
war. Hitherto they have been called only in 
emergencies: the first one, after the outbreak of 
hostilities in Europe; the second, when the fall of 
France raised grave questions about the fate of the 
European colonies in America ; and the third, after 
Pearl Harbor. The provision for regular annual 
meetings, with additional special meetings if a 
majority of the Governing Board of the Pan 
American Union should consider a special meeting 
necessary, is an expression of belief in the value of 
more frequent personal contact between the states- 
men responsible for the foreign policies of the 
continent. 

A third important provision entrusts new pow- 
ers to the Pan American Union. The jurisdiction 
of the Governing Board of the Union is extended 
to "every matter that affects the effective func- 
tioning of the Inter-American system and the 
solidarity and general welfare of the American 
Republics". This provision represents a radical 
depaiture from previous policy, under which the 
Pan American Union has avoided taking any ac- 
tion involving significant political decisions. In 
its new functions the Board will form a sort of 
permanent committee to watch over the function- 
ing of the inter-American system; it will afford 
an effective medium for prompt consultation be- 
tween the American states when it does not seem 
appropriate to convene a special meeting of for- 
eign ministers. 

Many of the nations represented at Mexico felt 
that these new and weighty responsibilities could 
not be effectively discharged by a group whose 
members were primarily concerned with the dip- 



lomatic representation of their governments at 
Washington. A proposal for a body of special 
representatives who would meet every six months 
in a different capital was not accepted, but the 
conference agreed that the members of the Gov- 
erning Board should be persons appointed specifi- 
cally for this duty and should not form a part 
of their government's diplomatic missions. It 
also accepted a suggestion of the United States 
that the chairman of the Board should be elected 
annually and should not be eligible for reelection, 
thus changing the present custom by which the 
Secretary of State of the United States always 
holds that position. Furthermore, it limited the 
terms of the Director General and the Assistant 
Director to 10 years and prohibited their reelec- 
tion or the election of jiersons of their own na- 
tionality to succeed them, but this arrangement 
will not take effect before 1955 in the case of the 
Director General, nor before 1960 in the case of 
the Assistant Director. This indicated the con- 
ference's approval of the way in which the affairs 
of the Union are being conducted at the present 
time, and the many friends of the Director Gen- 
eral were especially pleased when the conference 
adopted a resolution expressing its warmest ap- 
preciation of the excellent services rendered by 
Dr. Rowe and his collaborators to the cause of 
pan-Americanism. 

The resolution dealt also with several other 
organs of the inter-American system which have 
been created for special purposes. It was agreed 
that three of these, the Inter- American Juridical 
Committee, the Emergency Advisory Committee 
for Political Defense, and the Inter-American 
Defense Board, should continue at least until the 
meeting of the next inter-American conference 
at Bogota. A separate resolution recommended 
that a permanent military agency, formed of 
representatives of the General Staffs of each of 
the American republics, be set up to propose 
measures for better collaboration in the defense 
of the hemisphere. The resolution on the inter- 
American system created an important new 
agency in another field: the Inter-American 
Economic and Social Council, which will take 
the place of the Inter-American Financial and 
Economic Advisory Cornnittee established at the 
Meeting of Foreign Ministers in 1939. The new 
council will serve as a coordinating agency for 
all official inter-American economic and social 



APRIL 1, 1945 



529 



activities. It is specifically charged with the 
duty of promoting social progress and raising the 
standard of living of all the American peoples, 
and it will maintain liaison with the cori-espond- 
ing organ of the general international Organiza- 
tion when that Organization is established and 
with existing or projected specialized interna- 
tional agencies in the economic and social field. 
Like many of the other inter- American organiza- 
tions, the new council will be under the general 
supervision of the Pan American Union. 

Some of the changes envisaged by tlie resolution 
on the inter-American system could be made by 
the conference, but others, which involve the 
modification of general inter-American treaties, 
will require action by the Ninth International 
Conference of American States when it meets 
next year at Bogota. The resolution consequently 
instructed the Governing Board of the Pan 
American Union to prepare for the Bogota con- 
ference a draft charter covering the whole prob- 
lem of improving and strengthening the inter- 
American system. At the suggestion of the 
Mexican Government this charter is to include a 
declaration of the rights and duties of states and 
a declaration of the international rights and du- 
ties of man, which will be attached to the char- 
ter as annexes, so that they can be amended from 
time to time "to adapt them to the requirements 
and aspirations of international life". The first 
of these will presumably follow the lines of the 
declaration of Mexico, adopted by the conference, 
which restates the fundamental principles of pan- 
American cooperation; the second is foreshad- 
owed in another resolution which emphasizes the 
idea that international protection of the "essen- 
tial rights of man" would make unnecessary the 
diplomatic protection of citizens abroad and thus 
eliminate a cause of international friction. Both 
of these declarations were presented by the Mexi- 
can Delegation. 

The change in the organization of the Govern- 
ing Board, which can be made under the provi- 
sions of existing inter -American treaties, will 
become effective this year. The charter will con- 
sequently be drafted by the new, specially ap- 
pointed representatives, who will be free from 
other duties and thus in a better position to un- 
dertake this important work. 

Both the Act of Chapultepec and the resolution 
on the inter- American system contemplate a far 



closer cooperation between the American states in 
dealing with problems prejudicial to their peace 
and welfare, and both contemplate a close rela- 
tionship for this purpose between the inter- 
American system and the proposed general inter- 
national Organization. Another resolution of the 
conference dealt specifically with the Dumbarton 
Oaks Proposals and accepted them as a generally 
satisfactory basis for the setting up of a general 
organization.' The nations represented at the 
conference make clear their determination to co- 
operate with each other and with other peace- 
loving nations in the establishment of such an 
organization and expressed their desire "to make 
their full contribution, individually and by com- 
mon action in and through the inter-American 
system, effectively coordinating and harmonizing 
that system with the General International Or- 
ganization for the realization of the latter's ob- 
jectives". 

At the same time the Latin American represen- 
tatives at the conference made it clear that they 
themselves felt that a number of changes should be 
made in the Dumbarton Oaks plan. This had 
been submitted to them before the conference and 
had been discussed informally with their repre- 
sentatives at Washington in a series of exploratory 
meetings designed to give a full opportunity for the 
expression of each country's views. The United 
States, because of its relationship to the Dumbar- 
ton Oaks Proposals, did not and could not appro- 
priately join with the other participants in the con- 
ference in recommending the suggested changes. 
Nevertheless it made it clear that it hoped that the 
views of the other American nations would be free- 
ly expressed for the benefit of the forthcoming 
United Nations Conference at San Francisco. A 
committee, headed by the able Dr. Parra Perez of 
Venezuela, consequently compiled the opinions sub- 
mitted by many of the other American govern- 
ments, and it was agreed that these should be sub- 
mitted to the San Francisco conference and prior 
to the conference be transmitted to the nations in- 
vited to attend. The committee found that there 
was a consensus of opinion among the Latin Amer- 
ican governments on seven points : 

"(a) The aspiration of universality as an ideal 
toward which the Organization should tend in the 
future 



' Bulletin of Mar. 18, 1945, p. 449. 



550 



DEPARTMENT OF STATE BULLETIN 



" (b) The desirability of amplifying and making 
more specific the enumeration of the principles and 
purposes of the Organization 

"(c) The desirability of amplifying and making 
more specific the powers of the General Assembly 
in order that its action, as the fully representative 
organ of the international community may be made 
effective, harmonizing the powers of the Security 
CouncU with such amplification 

"(d) The desirability of extending the jurisdic- 
tion and competence of the International Tribunal 
or Court of Justice 

"(e) The desirability of creating an interna- 
tional agency specially charged with promoting 
intellectual and moral cooperation among nations 

"(f) The desirability of solving controversies 
and questions of an inter-American character, 
preferably in accordance with inter-American 
methods and procedures, in harmony with those 
of the General International Organization 

"(g) The desirability of giving an adequate rep- 
resentation to Latin America on the Security 
Council" 

Taken together, the Act of Chapultepec, the 
resolution on the inter-American system, and the 
resolution on the general international Organiza- 
tion set forth the policy which the nations of the 



^\'cstern Hemisphere propose to follow after the 
war. The American republics intend to take an 
active part in the creation of a world organization 
wiiich will maintain peace and afford an oppor- 
tunity for international cooperation in economic, 
social, humanitarian, and cultural matters. They 
also propose to continue to deal with purely Amer- 
ican questions through a stronger and more effec- 
tive inter-American system wliich will function, 
as a regional arrangement within a larger inter- 
national framework, consistently with the prin- 
ciples and purposes of the general international 
Organization. That these two purposes are con- 
sistent is shown by the fact that the same prin- 
ciples inspire both the inter- American system and 
the world Organization. Tlae United States has 
a vital interest in both. We may be glad that 
the strain of war and the hardly less difficult prob- 
lems which loom up as peace approaches have 
strengthened the ties between us and the other 
nations of the hemisphere, and that they, like 
ourselves, have felt that general international or- 
ganization is essential to the peace and security 
of all nations and that closer inter- American co- 
operation will advance the cause of peace and pro- 
mote the economic and social progress that must 
underlie world peace and security. 



Question Concerning Representation in Assembly 
Of the Proposed United Nations Organization 



[Released to tie press by the White House March 29] 

Soviet representatives at the Yalta conference 
indicated their desire to raise at the San Fran- 
cisco conference of the United Nations the ques- 
tion of representation for the Ukrainian Soviet 
Kepublic and the White Kussian Soviet Republic 
in the Assembly of the proposed United Nations 
Organization. 

The American and British representatives at 
the Yalta conference were requested by the Soviet 
representatives to support this proposal when it 
was submitted to the Conference of the United 



Nations at San Francisco. They agreed to do 
so, but the American representatives stated that, 
if the United Nations Organization agreed to let 
the Soviet Republics have three votes, the United 
States would ask for three votes also. 

The British and Soviet representatives stated 
that they would have no objection to the United 
States and its possessions having three votes in 
the Assembly if it is so desired. 

These conversations at Yalta related to the 
submission of a question to the San Francisco con- 
ference, where the ultimate decision wiU be made. 



APRIL 1, 1945 



531 



Recommendation for Renewal of Trade 

Agreements Act 

MESSAGE OF THE PRESIDENT TO THE CONGRESS 



[Released to the press by the White House March 26] 

To THE Congress of the United States: The 
coming victory of the United Nations means that 
they, and not their enemies, have power to estab- 
lish the foundations of the future. 

On April twenty-fifth their representatives will 
meet in San Francisco to draw up the Charter for 
the general Organization of the United Nations 
for security and peace. On this meeting and what 
comes after it our best hopes of a secure and 
peaceful world depend. 

At the same time we know that we cannot suc- 
ceed in building a peaceful world unless we build 
an economically healthy world. We are already 
taking decisive steps to this end. The efforts to 
improve currency relationships by the Interna- 
tional Monetary Fund, to encourage international 
investments and make them more secure by the 
International Bank for Reconstruction and De- 
velopment, to free the air for peaceful flight by the 
Chicago civil-aviation arrangements are part of 
that endeavor. So, too, is the proposed Food and 
Agriculture Organization of the United Nations. 

We owe it to the vision of Secretary Hull that 
another of the essential measures we shall need 
to accomplish our objective has been tested and 
perfected by 10 years of notably successful ex- 
perience under his leadership. You are all famil- 
iar with the Trade Agreements Act, which has 
been on the books since 1934 and which on three 
occasions, since that time, the Congress has re- 
newed. The present law expires in June of this 
year. I recommend that it again be renewed so 
that the great work which Secretary Hull began 
may be continued. 

Under him the reciprocal-trade-agreement pro- 
gram represented a sustained effort to reduce the 
barriers which the nations of the world maintained 
against each other's trade. If the economic foun- 
dations of the peace are to be as secure as the 
political foundations, it is clear that this effort 
must be continued, vigorously and effectively. 

Trade is fundamental to the prosperity of na- 
tions, as it is of individuals. All of us earn our 

638502—45 2 



living by producing for some market, and all of 
us buy in some market most of the things we need. 
We do better, both as producers and consumers, 
when the markets upon which we depend are as 
large and rich and various and competitive as pos- 
sible. The same is true of nations. 

We have not always understood this, in the 
United States or in any other country. We have 
tried often to protect some special interest by 
excluding strangers' goods from competition. In 
the long run everyone has suffered. 

In 1934 this country started on a wiser course. 
We enacted into law a standing offer to reduce 
our tariff barriers against the goods of any country 
which would do the same for us. We have en- 
tered into reciprocal trade agreements with 28 
countries. Each one of these agreements reduced 
some foreign barriers against the exports of this 
country, reduced our barriers against some pro- 
ducts of the other party to the bargain, and gave 
protection against discrimination by guarantee- 
ing most-favored-nation treatment to us both. 
Each agreement increased the freedom of busi- 
nessmen in both countries to buy and sell across 
national frontiers. The agreements have con- 
tributed to prosperity and good feeling here and 
in the other contracting countries. 

The record of how trade agreements expand 
two-way trade is set forth in the 1943 report of 
the Committee on Ways and Means. This record 
shows that between 1934-35 and 1938-39 our ex- 
ports to trade-agreement countries increased by 
63 percent, while our shipments to non-agreement 
countries increased by only 32 percent; between 
these same periods, our imports from agreement 
countries increased by 22 percent as compared 
with only 12 percent from non-agreement coun- 
tries. The disruptions and dislocations resulting 
from the war make later comparisons impossible. 
The record published in 1943 is, nevertheless, as 
valid today as it was then. We know, without 
any doubt, that trade agreements build trade and 
that they will do so after the war as they did be- 
fore. All sections of our population — labor, 



552 



DEPARTMENT OF STATE BULLETIN 



farmers, businessmen — have shared and ■vrill share 
in the benefits which increased trade brings. 

Unfortunately, powerful forces operated 
against our efforts in the years after 1934. The 
most powerful were the steps of our present ene- 
mies to prepare themselves for the war they in- 
tended to let loose upon the world. They did this 
by subjecting every part of their business life, 
and especially their foreign trade, to the principle 
of guns instead of butter. In the face of the 
economic warfare wliich they waged, and the fear 
and counter-measures which their conduct caused 
in other countries, the success of Secretary Hull 
and his interdepartmental associates in scaling 
down trade barriers is all the more remarkable. 

The coming total defeat of our enemies, and 
of the philosophy of conflict and aggression which 
they have represented, gives us a new chance and 
a better chance than we have ever had to bring 
about conditions under which the nations of the 
world substitute cooperation and sound business 
principles for warfare in economic relations. 

It is essential that we move forward aggressively 
and make the most of this opportunity. Business 
people in all countries want to know the rules under 
which the post-war world will operate. Industry 
today is working almost wholly on war orders, but, 
once the victory is won, immediate decisions will 
have to be made as to what lines of peacetime pro- 
duction look most profitable for either old or new 
plants. In this process of reconversion, decisions 
will necessarily be influenced by what businessmen 
foresee as government policy. If it is clear that 
barriers to foreign trade are coming down all 
around the world, businessmen can and will direct 
production to the things that look most promising 
under those conditions. In that case a real and 
large and permanent expansion of international 
trade becomes possible and likely. 

But if the signs are otherwise, if it appears that 
no further loosening of barriei's can be expected, 
everyone will act very differently. In that event 
we shall see built up in all countries new vested in- 
terests in a systena of restrictions, and we shall have 
lost our opportunity for the greater prosperity 
that expanding trade brings. 

I have urged renewal of the Trade Agreements 
Act. In order to be fully effective the act needs to 
be strengthened at one important point. You will 
remember that as passed in 1934 it authorized re- 
ductions in our tariff up to 50 percent of the rates 
then in effect. A good many of those reductions 



have been made, and those rates cannot be reduced 
further. Other reductions, smaller in amount, 
leave some remaining flexibility. In other cases, 
no reductions have been made at all, so that the full 
original authority remains. 

You will realize that in negotiating agi'eements 
with any foreign country what we can accomplish 
depends on what both parties can contribute. In 
each of the agreements we have made, we have con- 
tributed reductions on products of special interest 
to the other party to the agreement, and we have 
obtained commensurate contributions in the form 
of concessions on products of special interest to us. 

As to those countries, much of our original 
authority under the act has been used up. We are 
left in this situation : Great Britain and Canada, 
our largest peacetime customers, still maintain cer- 
tain high barriers against our exports, just as we 
still have high barriers against theirs. Under the 
act as it now stands we do not have enough to offer 
these countries to serve as a basis for the further 
concessions we want from them. The same situ- 
ation confronts us, although in a lesser degree, in 
the case of the other countries with whom we have 
already made agreements; these include France, 
the Netherlands, Belgium, Turkey, Sweden, Switz- 
erland, and most of the American republics. 

I therefore recommend that the 50 percent limit 
be brought up to date by an amendment that 
relates it to the rates of 1945 instead of 1934. Then 
we shall have the powers necessary to deal with 
all our friends on the basis of the existing situation. 

The bill which the Chairman of the Ways and 
Means Committee has introduced in the House of 
Representatives, H.R. 2652, would accomplish the 
objectives I have in mind, and has my support. 

This legislation is essential to the substantial 
increase in our foreign trade which is necessary 
for full employment and improved standards of 
living. It means more exports and it also means 
more imports. For we cannot hope to maintain 
exports at the levels necessary to furnish the addi- 
tional markets we need for agriculture and indus- 
try — income for the farmer and jobs for labo;* — 
unless we are willing to take payments in imports. 
We must recognize, too, that we are now a creditor 
country and are destined to be so for some time 
to come. Unless we make it possible for Ameri- 
cans to buy goods and services widely and readily 
in the markets of the world, it will be impossible 
for other countries to pay what is owed us. It is 
also important to remember that imports mean 



APRIL I, 1945 



533 



much more than goods for ultimate consumers. 
They mean jobs and income at every stage of the 
processing and distribution channels through 
which the imports flow to the consumer. By re- 
ducing our own tariff in conjunction with the 
reduction by other countries of their trade bar- 
riers, we create jobs, get more for our money, and 
improve the standard of living of every American 
consumer. 

This is no longer a question on which Repub- 
licans and Democrats should divide. The logic 
of events and our clear and pressing national in- 
terest must override our old party controversies. 
They must also override our sectional and special 
interests. We must all come to see that what is 
good for the United States is good for each of us, 
in economic affairs just as much as in any others. 

We all know that the reduction of government- 
created barriers to trade will not solve all our trade 
problems. The field of trade has many fronts, and 
we must try to get forward on each of them as 
rapidly and as wisely as we can. I shall con- 
tinue therefore to explore the possibility also of 
reaching a common understanding with the friend- 
ly nations of the world on some of the other inter- 
national trade problems that confront us. The 
appropiiate committees of tlie Congress will be 
fully consulted as that work progresses. The pur- 
pose of the whole effort is to eliminate economic 
warfare, to make practical international coopera- 
tion effective on as many fronts as possible, and 
so to lay the economic basis for the secure and 
peaceful world we all desire. 

When this trade-agreements legislation and the 
other legislation I have recommended to this Con- 
gress is adopted, and when the general Organiza- 
tion of the United Nations and their various spe- 
cial agencies, including one on trade, have been 
created and are functioning, we shall have made a 
good beginning at creating a workable kit of tools 
for the new world of international cooperation to 
which we all look forward. We shall be equipped 
to deal with the great overriding question of secu- 
rity, and with the crucial questions of money and 
exchange, international investment, trade, civil 
aviation, labor, and agriculture. 

As I said in mj' message of February 12 on the 
Brett on Woods proposals: 

"The point in history at which we stand is full 



of promise and of danger. The world will either 
move toward unity and widely shared prosperity 
or it will move apart into necessarily competing 
economic blocs. We have a chance, we citizens of 
the United States, to use our influence in favor of 
a more united and cooperating world. Wliether 
we do so will determine, as far as it is in our 
power, the kind of lives our grandchildren can 
live." 

The Whfte House 
March 26, 191(5 

Meeting of the Committee 
of Jurists 

[Released to the press March 27] 

The Department of State, acting on behalf of 
this and other governments sponsoring the United 
Nations Conference at San Francisco, namely, 
Great Britain, the Soviet Union, and China, has 
issaied invitations to the governments to be repre- 
sented at San Francisco tliat they send representa- 
tives to a preliminary meeting of jurists to be con- 
vened in Washmgton on April 9 to prepare a 
draft of a statute for the International Court of 
Justice, which is to become a part of the inter- 
national Organization. 

It will be recalled that the Dumbarton Oaks 
Proposals state that there should be an Interna- 
tional Court of Justice which should constitute the 
principal judicial organ of the Organization; that 
the Court should be constituted and should func- 
tion in accordance with a statute which should be 
a part of the Charter of the Organization. The 
Proposals also provide that the Statute of the 
Court should be either (a) the Statute of the Per- 
manent Court of International Justice, with such 
modifications as may be desirable, or (b) a new 
statute in the preparation of which the Statute of 
the Permanent Court of International Justice 
should be used as a basis. 

The committee of jurists that is to meet on 
April 9 will concern itself with the preparation of 
a draft to be considered at San Francisco. If it 
does not conclude its work before the convening of 
the San Francisco conference, it will continue its 
deliberations at the seat of the conference. 



534 



DEPARTMENT OF STATE BULLETIN 



Renewal of Trade Agreements 



Address hy CHARLES P. TAFT> 



[Released to the press March 30] 

Within the last two weeks the bill for the re- 
newal of the Hull Reciprocal Trade Agreements 
Act has been introduced into the House of Repre- 
sentatives by Representative Doughton. It must 
be acted on before June 12th, or the existing 
authority lapses. 

It provides for an increase in the original au- 
thority granted in 1934, and renewed in 1937, 1940, 
and 1943 without change. Tariff rates by this new 
bill could be reduced by 50 percent of what they 
were on January 1, 1945. 

Although the reciprocal trade-agreements pro- 
gram has the overwhelming support of every sec- 
tion of American opinion, the opposition is vigor- 
ous and determined, and it is most essential for the 
supporters of sound commercial policy and inter- 
national peace to rally for what promises to be 
a real fight. 

It is true that the efforts of the United Nations 
group are concentrated on the active support of 
the Dumbarton Oaks Proposals at San Francisco, 
and of the Bretton Woods agreements in Congress. 
But the trade-agreements renewal is an essential, 
perhaps the most essential, part of the economic 
program, without which the new world Organi- 
zation would start its life vitally handicapped. 
Those actively interested in San Francisco results 
should therefore pick up the trade-agreements 
fight. 

The 50 percent additional authority is essential 
to lay any basis for progress out of the devastating 
economic conditions that will exist when the Ger- 
man war is liquidated. The wise use of this au- 
thority in such a way as not to disrupt American 
employment and industry is pledged by the past 
record of the trade-agreements organization in its 
11 years of operation under the act. 

I am not sorry .that there is the necessity for dis- 
cussing the basis of international trade each three 
years when this act comes up for reconsideration. 
It has educated the American public to sound 



' Delivered before the Minnesota United Nations Com- 
mlttee and Civic Commerce Association at Minneapolis, 
Minn., on Mar. 30, 1945. Mr. Taft is Special Assistant to 
the Assistant Secretary for Economic Affairs. 



principles of international economic relationship, 
and the lesson cannot be too often repeated. 

Since the first World War, we have become a 
creditor nation and have learned that if we are 
to be paid it will have to be mainly in goods or 
not at all. If we shut out the goods by high tariffs 
we can be paid in gold, but only imtil the gold 
runs out, and we seem to have not much use for it 
anyway. 

But there is more to learn about this business 
of trade. It is not just an exchange of goods: It 
covers services to our tourists abroad, remittances 
by immigrants here to their families in the old 
country, shipping and air services by foreign lines, 
banking activities, patent payments, interest and 
dividends. All of those make up "invisible" items 
that help to balance imports and exports for us or 
for other countries. 

The worst job the devastated coimtries face, and 
England too, for that matter, is to restore their 
balance of payments. After the last war, in the 
two years 1919 and 1920, Europe imported 17.4 
billion dollars of commodities and exported only 
5 billion dollars. With the magnitude of disrup- 
tion this time the pressure will be even greater, 
and the deficit, too, in all probability. The only 
salvation for all of us is to help England and the 
liberated areas to move all the exports they can 
and to build toward some equality between what 
they musl import to live and what they must ex- 
port to pay for the imports. 

During that period of adjustment, export and 
import controls, quotas, and exchange controls are 
unavoidable. But unless we want excessive na- 
tionalism and the artificial self-sufficiency that con- 
tinues economic warfare, we must work toward 
agreements for progressive relaxation of controls 
by others, and reasonable reduction of trade bar- 
riers by the United States. 

It is true of course that trade can mean hostility 
and warfare. But if the spirit is right it helps our 
efforts for peace. As Herbert Feis puts it : 

"Trade can be the support of, but not the substi- 
tute for a calm spirit within nations and just deal- 
ings between them, or for the maintenance of free 



APRIL 1, 1945 



535 



institutions, or for the strength which sometimes 
alone can command respect." 

All the discussions on the reciprocal trade agree- 
ments and the Hull policies have failed adequately 
to concentrate on the importance of imports for 
our own benefit and advancement. People still 
talk about exports all by themselves, as increasing 
our employment, for instance, and giving us that 
extra 3 million jobs toward the ideal job goal, with- 
out even wondering how the purchasers pay us for 
them. 

The tmth is that we ought to begin with imports 
for their own value. They give us things which 
frequently we can't produce at all, or would pro- 
duce at much greater cost. That gives us more 
value for our wages and salaries, just like mass 
production of automobiles. To quote Herbert Feis 
again, 

"The import trade of each nation enables it to 
share in the richness of the earth everywhere, and 
to benefit from the research, the diligence, the 
skill and the capital possessed by the men and 
women of other coimtries." 

Exports pay for the imports we need, of course, 
and there are many, many essential raw materials 
we don't and never can produce here. Wlien 
they aren't expanded too far they give sound em- 
ployment, and they pay our debts, too, or consti- 
tute investments of our capital. 

I said "investments" rather than "loans," be- 
cause we have thought too much about repayment 
in these past years. If you buy stock in Ameri- 
can Tel. and Tel. and it keeps on going, and you 
get your dividends, you don't talk about taking 
your capital out; you leave it in. If an invest- 
ment is sound, why not leave it? If it is a loan 
and is paid oflF, why not leave the proceeds there 
in something else, also paying the interest or divi- 
dends? Then only the latter have to be paid in 
goods exported to us. 

But can we look forward to expanding and non- 
discriminatory trade about which we in the State 
Department are always shouting? Or is it to 
be a pipe dream in a world of state traders and 
economic isolationists? The answer is perfectly 
clear : All the trading nations will be more than 
glad to go along on an expanding world economy 
with us, but they have to be shown what we are 
going to do about tariffs and such methods of 
economic warfare as export subsidies. If this 



trade-agreements renewal fails with its additional 
authority, then we might as well kiss good-by to 
any hope for economic cooperation from the other 
great nations of commerce. 

Then why take a chance and seek more author- 
ity? You may well ask me. The answer is sim- 
ple. The operations under the Trade Agreements 
Act are a bargaining process. While there is con- 
siderable authority left under the old act, it covers 
commodities that concern chiefly the enemy na- 
tions and certain other countries with whom we 
have not in the past been able to make agreements 
imder the act. Our big customers and especially 
Great Britain and Canada gave us concessions of 
great importance, and we gave them nearly all 
our possible concessions. They are the very ones 
with whom we must do the quickest and most im- 
portant bargaining for the post-war period, and 
our powers to enter into arrangements with them 
must be increased. 

Fast action is needed with all nations with which 
we deal, especially the liberated areas. For that 
reason we are planning to deal with related groups 
of countries at the same time. Bilateral agree- 
ments will result, and the bargaining will take 
place with the principal suppliers as before, and 
on a most-favored-nation basis, but the coordina- 
tion of negotiations, as has occurred in at least 
one instance in the past, makes it possible for each 
country to gage its action in the light of action 
expected in a related negotiation. Thus it may be 
possible to operate in a much briefer period and 
so prevent at the very inception the trade practices 
we oppose. 

There has been discussion of a multilateral 
agreement with a large number of countries. This 
would have to be on a formula for flat reductions 
across the board. The basic element in past ne- 
gotiations, the careful study of the value and 
effects of each individual reduction of each indi- 
vidual rate in each country, would disappear be- 
cause it would be impossible. That kind of bar- 
gaining can obviously not be conducted between 
many countries at a time. 

On the other hand much more can be done now 
under the increased authority and the old method, 
because many industries converted to war pro- 
duction are not subject to disruption but can go 
back to lines that do not need tariff protection of 
the character they have previously enjoyed. 

{Continued on page 538) 



536 



DEPARTMENT OF STATE BULLETIN 



Interim Commission on Food and 

Agriculture 

MESSAGE OF THE PRESIDENT TO THE CONGRESS TRANSMITTING FIRST REPORT 



[Released to the press by the White House March 261 

To THE Congress of the United States : I am 
sending herewith for the information and consid- 
eration of the Congress the first report to the Gov- 
ernments of the United Nations by the Interim 
Commission on Food and Agriculture. Appended 
to this report is the constitution of the Food and 
Agriculture Organization of the United Nations, 
which the United Nations Conference on Food and 
Agriculture at Hot Springs, Virginia, requested 
the Interim Commission to formulate and rec- 
ommend. 

The Interim Commission has done its work well. 
It has prepared a plan for a permanent interna- 
tional organization through which governments 
can pool and extend their knowledge and collabo- 
rate with each other in raising the standards of 
nutrition of their peoples and in establishing and 
maintaining an expanding prosperity for agri- 
culture in all countries. 

I recommend that the Congress authorize the 
acceptance of the constitution and the participa- 
tion of the United States in the work of the Food 
and Agriculture Organization.' 

The United Nations have already made mucli 
progress in setting up an organization for interna- 
tional securitj'. But our collaboration for peace 
must be on a broader basis than security alone. 
We must strive to correct the conditions that pre- 
dispose i^eo^Jle toward war or make them the ready 
tools and victims of aggressors. We shall need 
also to work together as nations toward achieving 
freedom from want. Our participation in tlie 
Food and Agriculture Organization will be an 
essential step in this collaboration. 

The Organization will seek its ends through the 
provision of international services in agriculture 
and nutrition which have heretofore been either 
lacking or inadequate. Among other things, it 
will provide the means for bringing together from 
all parts of the world the results of research in 



' Buu-ETIN of Feb. 18, 1945, p. 225. 



all the fields of agriculture and nutrition and for 
disseminating ideas and advice on how the avail- 
able information can be of greatest usefulness. 

Improved standards of nutrition, increased 
levels of farm incomes, avoidance of agricultural 
surpluses — these are among the important objec- 
tives that the Food and Agriculture Organiza- 
tion will assist the nations of the world in achiev- 
ing. The Organization will seek to better condi- 
tions in food and agriculture by fostering interna- 
tional cooperation in developing the optimum use 
of the rasources of land, labor, and science. One 
of its important jobs will be to help in improving 
the marketing of agricultural products through- 
out the world so that farmers can find good mar- 
kets here and abroad and continue to produce as 
fully as is consistent with soimd conservation 
practices. 

The constitution of the Organization provides 
that it shall include fisheries and forests within 
the scope of its work, and that in agriculture it 
shall cover both food and non-food products. The 
work of the Food and Agriculture Organization 
will be primarily technical and advisory. Its staff 
will be small ; its budget will be small, $2,500,000 
for the first year — with $625,000 as the share to be 
borne by the United States — and about twice that 
amount in succeeding years. It is in no sense a 
relief organization. 

In becoming a member of the Food and Agricul- 
ture Organization, we will retain complete free- 
dom of action in determining our national agri- 
culture policies. Under its constitution, the Or- 
ganization will have no powers of direction or 
control over any nation. It will recommend agri- 
cultural policies and advise nations on their food 
and agricultural problems, but it will have no 
power to coerce or command. The constitution 
provides that all member nations shall have equal 
representation in the conference of the Organiza- 
t ion, each being entitled to one vote. Our responsi- 
bilities in joining the Organization are of the same 



APRIL 1, 1945 



537 



nature as those Congress has heretofore authorized 
in approving our participation in the Pan Amer- 
ican Union. 

I therefore recommend that the Congress ap- 
prove our active participation in the Food and 
Agriculture Organization of the United Nations, 
in accordance with its proposed constitution as 
set forth in appendix I of the attached report, and 
authorize annual appropriations of our share of 
the budget of the Organization. 

Franklin D. Eoosevelt 
The "WnrrE House 

March 26, 1915 

Discovery of Nazi 
Post- War Plans 

[Released to the press March 30] 

The Department of State announced on March 
30 that reliable information collected by Allied 
governments clearly indicates that the Nazi regime 
in Germany ha.s developed well-arranged post-war 
plans for the perpetuation of Nazi doctrines and 
domination. Some of these plans have already 
been put into operation and others are ready to be 
launched on a wide-spread scale immediately upon 
termination of hostilities in Eui'ope. 

Nazi Party members, German industrialists, and 
the German military, realizing that victory can no 
longer be attained, are now developing post-war 
conmiercial projects, are endeavoring to renew and 
cement friendships in foreign commercial circles, 
and are planning for renewals of pre-war cartel 
agreements. An aijpeal to the courts of various 
countries will be made early m the post-war period 
through dummies for "unlawful" seizure of indus- 
trial plants and other properties taken over by 
Allied governments at the outbreak of war. In 
cases where this method fails German repurchase 
will be attempted through "cloaks" who meet the 
necessary citizensJhip requirements. The object 
in every instance will be to reestablish German 
control at the earliest possible date. German at- 
tempts to continue to share in the control and 
development of technological change in the im- 
mediate post-war period are reflected in the phe- 
nomenal increase in German patent registrations 
in foreign countries during the past two years. 
These registrations reached an all-time high in 



1944. The prohibition against exporting capital 
from Germany was withdrawn several months 
ago, and a substantial outflow of capital to foreign 
countries has followed. 

German technicians, cultural experts, and un- 
der-cover agents have well-laid plans to infiltrate 
foreign countries with the object of developing 
economic, cultural, and political ties. Germaji 
technicians and scientific-research experts will be 
made available at low cost to industrial firms and 
technical schools in foreign countries. German 
capital and plans for the construction of ultra- 
modern technical schools and research laboratories 
will be offered at extremely favorable terms, since 
they will afford the Germans an excellent opportu- 
nity to design and perfect new weapons. This 
Government is now in possession of photostatic 
copies of several volumes of German plans on this 
subject. The German propaganda program is to 
be an integral part of the over-all post-war pro- 
gram. The immediate aim of the propaganda 
program will be directed at removing Allied con- 
trol measures by "softening up" the Allies through 
a subtle plea for "fair treatment" of Germans, and 
later the program will be expanded and intensified 
with the object of giving rebirth to all Nazi doc- 
trines and furthering German ambitions for world 
domination. Unless these plans are checked they 
will present a constant menace to post-war peace 
and security. 

The recent Inter- American Conference on Prob- 
lems of War and Peace at Mexico City fully recog- 
nized this danger and as a result adopted numerous 
resolutions aimed at uncovering and eliminating 
all Nazi influences in this hemisphere and all activ- 
ities directed at a resurgence of German power 
after the war. Such resolutions included the con- 
trol and elimination of subversive activities, the 
exclusion and extradition of war criminals, the 
exchange of information relating to persons who 
should not be allowed to carry on financial and 
commercial activities, and the reaffirmation of 
similar objectives of other inter-American 
conferences. 

The statement of gold policy issued simultane- 
ously on February 22, 1944 by the United King- 
dom, the Union of Soviet Socialist Republics, and 
the United States, and the Declaration on Janu- 
ary 5, 1943 on acts of dispossession issued by the 
same three countries in conjunction with several 
other countries, together with resolution VI of 



538 

Bretton Woods, which has been endorsed by many 
nations, give ample proof that the peace-loving 
nations of the world are united and will take such 
action as is necessary to smash the economic and 
political foundation of future German aggression. 

Declaration of War by 
Argentina Against 
Germany and Japan 

[Released to the press March 27] 

The Department of State hiis not yet received 
the official text of the action taken by the Argen- 
tine Cabinet. However, the report of its action 
in declaring a state of war against Germany and 
Japan is welcomed here as indicating the intention 
of Argentina to participate actively in the war 
against the Axis and to make its national policy 
conform to the procedure outlined in a resolution 
of the Inter- American Conference on Problems of 
War and Peace.^ This resolution outlines the 
steps prerequisite to the restoration of complete 
solidarity among the American republics. 

The resolution, approved unanimously by dele- 
gates from 20 American republics at Mexico City 
on March 7, was designetl to intensify the war ef- 
fort of the American nations against Germany and 
Japan and to consolidate and extend the solidarity 
of this hemisphere against all types of aggression. 

The resolution, recognizing that the unity of the 
peoples of the Americas is indivisible, proposed 
that the Argentine nation should conform and 
adhere to the principles and declarations in the 
Final Act of the Conference of Mexico. 

The resolution provided that the Final Act of 
the Conference shall be open to adherence by the 
Argentine nation, always in accordance with the 
criteria outlined in the resolution. 

The criteria for such adherence included the 
basic conditions: that Argentina should partici- 
pate whole-heartedly with other American states 
in the Act of Chapultepec for common action to 
resist aggression against any American state ; and 
that the Argentine nation would effectively im- 
plement a policy of cooperative action with other 

' Bulletin of Mar. 18, 1945, p. 450. 



DEPARTMENT OF STATE BULLETIN 

American states in war against the Axis to enable 
her incorporation into the United Nations as a 
signatory to their joint declaration. 

In the light of the Argentine nation's action, it 
is expected that there will be an early exchange of 
views in the spirit of the Final Act of the Mexico 
City conference concerning the early restoration 
of American solidarity. 



Death of David Lloyd George 

[Released to the press March 26] 

The Acting Secretary of State, Joseph C. Grew, 
on March 26 sent the following telegram to the 
Eight Honorable Anthony Eden, British Secre- 
tary of State for Foreign Affairs : 

"I have just learned with the deepest regret of 
the death of David Lloyd George, who once led 
his country to victory and peace. The courage 
and dauntless resolution of this valiant British 
statesman in the cause of freedom established him 
as one of the great men of our time. His spirit 
is an inspiration to all of us at this moment of 
approaching victory. 

"Joseph C. Grew 
"Actinff Secretary of State" 



RENEWAL OF TRADE AGREEMENTS— Continued from 

page 535. 

1 am not one who believes that peace is depend- 
ent upon economics or that wars result from eco- 
nomic rivalry. Even some of the greatest social- 
ists agree that, while men are profoundly affected 
by the way they earn their living, at the times of 
crisis it is ideals of justice and liberty and reli- 
gion that determine their course. 

But our economic foundations are tremen- 
dously important, and in these coming months it 
is our economic relation to England, France, and 
Russia that can facilitate or almost destroy our 
chances for building the foundations of peace. In 
all this complex of problems the renewal of the 
Trade Agreements Act must be considered to rank 
with the Bretton Woods agreements and the Dum- 
barton Oaks Proposals, 



APRIL 1, 1945 



539 



The Allied Commission for Italy 

Transcript of Remarks by the Acting President of the Allied Commission for Italy' 

I 



T IS nearly eighteen months since I stood with my 
friend and colleague Mr. Robert Murphy and 
watched the signing of the armistice agreement 
vvhich brought to a conclusion hostilities between 
the Allied forces and those of Italy. At that 
moment our minds turned naturally to the months 
that had passed since the North African invasion 
was first launched under General Eisenliower's 
command. This was the first, the prototype, of 
joint operations by land and sea. They had been 
months of common difficulties jointly surmounted, 
difficulties both in the military and in the political 
sphere. Then, after the conquest and defeat of 
the German and Italian Armies in Tunisia, came 
the successful landings in Sicily. Now came the 
collapse and suri'ender of Fascist Italy, at that 
time the pupi^et of Nazi Germany. 

A few days after, Murphy and I landed by plane 
between Taranto and Brindisi; and here, in the 
shape of Marshal Badoglio and liis few ministers, 
the conception of a legitimate Italian Government 
was kept alive, although its authority was reduced 
to a tiny enclave of territory. 

Under the conventions of international law the 
landings at Salerno and the occupation of south- 
ern Italy were followed by proclamations setting 
up Allied Military Government. But even in 
those early days the concept of an independent 
Italian Government was kept in being; and from 
that moment all our minds were directed to the 
purpose of rebuilding, through such a Govern- 
ment, Italy as a free and democratic nation. 

Considering the enormous injuries inflicted upon 
fhe Allies, and more especially upon the British, 
by the closing of the Mediterranean, the threat, 
the imminent danger, the almost mortal blow to 
Egj'pt and the Suez Canal, and the vast corre- 
sponding burdens placed upon us, never in the his- 
tory of war have victorious armies so rapidly and 
with such sincerity turned from battle to the task 
of reconstruction. 

That was because we knew that the Italians, 
under a cruel dictatorship and held in fee by Ger- 
many, were being forced against their true inter- 
ests and their long-standing traditions. As in the 
days of the Risorgimento, freedom-loving Ital- 
ians had looked to the Anglo-Saxon people for 

638502 — 45 3 



sympathy and practical aid, so now, when they 
were escaping from something worse even than 
King Bomba, it was to the same old friends that 
they turned for sympathy in their new trials. 
Those trials continue. The armistice brought, 
alas, for Italy no peace. The cruel hand of war 
is passing from south to north through Italian 
territory, and we still do not know the final total 
in this somber addition of destruction. Never- 
theless, from the earliest moment an Italian Gov- 
ernment has been nurtured by the Allied author- 
ities. From Brindisi it was moved early in 1944 
to Salerno and there began, although subjected to 
great physical difficulties of communication and 
location, to grow in strength and stature. As 
soon as possible after the capture of Rome, ar- 
rangements were made for the members of the 
Government at Salerno to enter into close discus- 
sion with the heads of the parties in Rome. Thus 
Signer Bonomi's first administration rapidly 
emerged. 

It has seemed a long and di'eary winter with a 
comparatively stable military line. But these 
months have not been wasted. There has been a 
steady and continuous development of the author- 
ity of the Italian Government; more and more 
teri'itory has been handed over from Military Gov- 
enmient to their control; and within that terri- 
tory wherever possible the Italian authorities are 
taking over functions that properly belong to 
them. 

Section II 

For instance, since we met last, the food dis- 
tribution in southern Italy has become an Italian 
and not an Allied responsibility. In the field of 
transport an organization called ENAC under 
Italian control is making good progress in the 
difficult task of organization and allocation; in 
the ports of Taranto, Brindisi, and Castellammare 
the Italians have taken over complete control. 

There is a further item that I should mention of 
interest to you gentlemen: That is, as you know, 

' Tlie Rt. Hon. Harold Macmillan, British Resident Min- 
ister in Italy. Mr. Macmillan made these remarks at a 
press reception in Rome on Feb. 24, 1945. 



540 



DEPARTMENT OF STATE BULLETIN 



instead of news being distributed by a branch of 
tlie Allied military authorities, the normal system 
of distribution through the press agencies has re- 
cently been restored. 

Meanwhile, the Italian Army, as is well known, 
has reentered the combat line. Ever since the 
armistice the most valuable help has been given 
by all the Italian forces to the common war effort. 
Nor should those who think only of military func- 
tions in terms of combat troops forget what a large 
proportion of all modern armies is concerned with 
the services behind the lines. Towards these es- 
sential services the Italians have made great con- 
tributions. But of course they are right in seek- 
ing the honor of participation in the battle; and 
it is a great satisfaction to feel that this ambition 
is being realized. Nevertheless, there are, from a 
practical point of view, many limiting factors in 
the making of a new army. There is little Italian 
equipment in liberated Italy ^ suitable for modern 
combat troops; nor can any be manufactured there. 
Italian combat troops have to be furnished with 
Allied equipment. After this equipment has been 
shipped to Italy it takes some months before the 
combat troops can be trained in its use and ready 
for battle. And shipping is a great difficulty. 
Shipping today is devoured not so much by the 
enemy submarine but by the voracious demands of 
our immense war effort all over the globe: The 
Pacific war, the Burmese war, the war on the East- 
ern Front, and the Mediterranean war. We have 
many obligations. We have an obligation to our 
French friends wlaich is being met with equipment 
for new French divisions. So with the Battle of 
Europe still coming to a liead and the Battle for 
Japan expanding and developing, the rate of re- 
equipment for the Italian combat Army must be 
decided in accordance with world needs. Nor must 
we forget the huge demands for relief and rehabili- 
tation supplies throughout all liberated Europe, 
including Italy. It is this very shipping problem 
which has delayed until now the implementation 
of a policy jointly accepted by the two Allied Gov- 
ernments, that is, the giving of a uniform bread 
ration of the equivalent of 300 grams throughout 
all liberated Italy. I have seen one or two mali- 
cious reports which have somehow im^Dlied that 
there was a division of opinion on this matter be- 

' Liberated Italy, excluding territory under AMG nd- 
mini.stration, includes the islands of Sardinia and Sicily 
and all of tlie pt-ninsula south of the northern boundaries 
of Viterbo, Rieti, and Teramo provinces. 



tween the Allies, or an unwillingness by the theater 
command to implement the decisions of the two 
Governments. These suspicions are fortunately 
confined to a few professional mischief-makers. 
The quality of insinuation is twice cursed: It 
curseth him who makes it and him who listens to 
it. It is now a matter of great satisfaction to us 
all that some improvement in the over-all shipping 
situation and some legitimate risks which can 
now be taken in the light of the improved strategic 
jiosition of the European war have made it pos- 
sible to increase the ration as from March first. 

When I sfjeak of the Italian Army I must men- 
tion two most helpful things. First, the excel- 
lent recruiting figures under the new call-up. 
This sliows a real wave of enthusiasm. Secondly, 
the patriot forces are joining the Army under 
special arrangements with great gusto, and special 
new arrangements are being made for the future. 
I sometimes hear rather dismal talk about what 
will be the conditions in the North when it is 
liberated. The physical conditions will depend, 
alas, upon the degree of destruction which German 
malignance and misdirected ingenuity can devise. 
But I believe that the spiritual energy of the 
northern peoples will be a great benefit rather than 
a possible danger to Italy. At any rate, our con- 
tacts and those of the Italian Government with the 
patriot movements allow us a confident hope that 
this will be the case. 

This steady development of the Italian Gov- 
ernment to its own authority is taking some fur- 
ther steps. The Chief Conmiissioner and I have 
today called upon the Prime ISIinister, Bonomi, 
and the Foreign Secretary, De Gasperi, to inform 
them of certain changes which are being made 
immediately. They are intended to carry out to 
the full the changed relationship between the 
Allied Commission and the Italian Government, 
which will in future be one of consultation and 
advice. Although the requirements of the Italian 
campaign and overriding military needs must be 
protected, the rights of the Allied governments 
will be held in reserve in the matter of day-to-day 
administration. 

Section III 

Wliat are the conditions of a sovereign state ? I 
would say that they consist, first, in control of the 
external relations of that state; and secondly, in 
the control of the legislative functions and in- 
ternal administration. Judged by this criterion, 
under the decisions wliich we have today commu- 



APRIL I, 1945 

nicated, the position of the Italian Government 
will be from a practical point of view incompara- 
bly reinforced. We have informed the Italian 
Government that it should conduct its relations 
with other governments no longer indirectly 
through the Allied Commission but directly. 
They have absolutely free right to appoint and 
receive ambassadors to and from all Allied and 
neutral countries. They will deal directly with 
their ambassadors in foreign countries and with 
their own secret chaimels of communication by 
diplomatic pouch. It is true that we have asked 
to be informed of any important negotiations in 
which the Italian Government may be engaged 
with foreign governments. That is a natural re- 
quest, given the present situation, and one more 
likely to be beneficial to those negotiations than 
harmful. Externally, therefore, the Italian Gov- 
ernment will resmne once more those normal rela- 
tions which every sovereign government has with 
the governments of aU countries with which it is 
at peace. Internally, since there is no legislature, 
decrees and laws are passed by the Government. 
Up to now they have been submitted for the ap- 
proval of the Commission. This requirement is 
abolished. Therefore the Italian Government re- 
gains full control over its legislative authority. 
As regards administration it has up to now been 
the practice that all appointments of the Italian 
Government must be approved by the Commission. 
This requirement also is abolished; and all ap- 
pointments, from members of the Government 
down to the minor functionaries, will be the sole 
responsibility of the Italian Government itself. 
You may remember that in the first directive is- 
sued to General Eisenhower the task of insuring 
tlie removal of undesirable or Fascist function- 
aries from their posts was placed upon the com- 
manding generaL But all that is out of date. "We 
have full confidence in the democratic purposes of 
the Italian Government ; it is far better that they 
should freely choose their officials, and we have 
confidence that they will do so with efficiency 
and probity. At any rate they can in future do 
so without even formal approval from the Allied 
Commission. Tlaere is of course one exception; 
that is, the appointment of certain officers of mili- 
tary importance must be made with the approval 
of the Supreme Allied Commander. But that 
merely follows the normal practice where one na- 
tion has placed its armies imder the command of 
another, and there is nothing, I am certain, in this 



541 

wliich could be either derogatory to the Italians or 
misunderstood by them. The officers of an army 
fighting under the Supreme Allied Commander are 
naturally a subject on which he must be consulted. 

There is another aspect of the changes which 
we have today announced to Signor Bonomi which 
I think may interest you. We have had, in order 
to make effective the transfer from Allied Military 
Government to Italian control and to get through 
the interval before a new stage could be reached, 
a considerable number of regional officers of the 
Allied Commission permanently stationed in areas 
under Italian jurisdiction. All these will be with- 
drawn. Certain liaison officers will be left to 
assist the military authorities in their dealings in 
the various areas, and a number of teclmiail ex- 
perts, where their services are asked for by the 
Italian Goveiimient, will remain available; but 
the general structure of local and regional repre- 
sentation is no longer necessary. It has perhaps 
been felt as an instrument of control, and the 
withdrawal of these officers marks a new stage and 
of course throws corresponding responsibilities 
upon the Italian administration. 

There are a number of other points with which 
our communication deals. I am hoping that the 
question of Italian prisoners of war held in Italy 
can be rapidly liquidated. Arrangements are be- 
ing made to reestablish in every possible way the 
cultural relationships between the Italian people 
and the Allies. One of the great disadvantages of 
war is the break in the flow of knowledge and 
literature between one country and another. In 
an effort which I commend equally as a statesman 
and as a publisher, we will make arrangements 
for the flow between Italy and the United Na- 
tions of books and other publications of a scientific, 
political, philosopliical, and artistic nature. 
Later on we hope to make similar arrangements 
for the movement between Italy and the United 
Nations of professional men, scholars, and artists. 

I regard, therefore, these changes which I have 
been authorized by the two Governments to make 
in the political field as marking not indeed the 
final but perhaps the penultimate stage in an evo- 
lutionary process begun eighteen months ago. It 
is certainly a long way from the Sicilian olive 
grove where we signed the armistice terms on that 
golden September afternoon. It is a long way 
from the medieval castle in Brindisi which housed 
an independent Italian Government, cabined and 
confined perhaps, but alive. It is a long way from 



542 



DEPARTMENT OF STATE BULLETIN 



the cold and j^rim surroundings of a Government 
trying to set itself up in battered Salerno. It is 
a great advance even from the day when an Italian 
Govenmaent reentered Rome. It marks a policy 
of steady development, and it has nearly reached 
its final point. 

So much for the political aspects, external and 
internal. 

We are working steadily at plans for consider- 
able economic progress with a view to the rehabili- 
tation of Italian agriculture and industry. There 
will also be immense financial problems which re- 
quire to be solved both for the immediate period 
and still more for that after hostilities cease. I 
hope to be able to make or authorize to be made 
special communications on the decisions reached 
on all these questions. A considerable amount of 
work is going forward; plans are being made; 
orders are being placed ; and as the shipping posi- 
tion improves and the war draws to its close, we 
hope to be in a position to help Italy to deal with 
the immense economic problems that confront her. 

Section IV 

In order to look forward with confidence, we 
must from time to time look back with understand- 
ing. Five years ago, in the spring of 1940, the 
vast power of the Nazi w^ar-machine was about to 
be launched on Europe. The phase of "phony" 
war — strange and ironic expression — was drawing 
to its close. That machine had been built up by 
fraud and in secrecy; although many had under- 
stood aright the wicked purposes of its builders, 
few had properly assessed its strength. Within a 
few weeks it was destined, like a mighty flood, to 
overwhelm almost the whole of Europe. Fortified 
by the temporary security of her eastern frontier — 
an advantage destined to be wantonly thrown 
away within another year — Germany was able to 
subdue successively Norway, Denmark, Holland, 
Belgium, France, Poland, Czechoslovakia. Yugo- 
slavia, and Greece — all destined to fall beneath 
the terrific weight of the first impact. Neutrals 
were blackmailed, satellite powers brought into 
uneasy alliance. After the virtual conquest of 
Europe, using as her cat's-paw Fascist Italy under 
Mussolini's crazy leadership, Africa was menaced 
by the same immense and almost irresistible at- 
tack. In the following years the great expansion 
movement reached its peak, with the advance to a 
few miles from Cairo and the conquest of huge 
tracts of Russian territory. Great Britain in those 



days could but stniggle to stem the advancing 
tide. But at a certain point in time (about the 
exact definition of which historians will long de- 
bate) the movement of expansion was halted. For 
long months and even years, the Allied forces 
could withstand its further progress but not to 
any great degree force a retreat. An uneasy equi- 
poise followed, in the course of which almost ir- 
reparable woimds have been inflicted upon the 
suffering body corporate of Europe. 

And now in the West, starting from the autumn 
of 1942 with Alexander's and Eisenhower's 
African campaigns, from the triumphs of 1943, 
the Battle of Tunis, the capture of Sicily, the end 
of Fascist Italy, and the liberation of half Italy 
in 1944. the epic story culminates in the vast enter- 
l^rise of the landings in and liberation of France, 
Belgium, and part of Holland, and the advance 
into German territory. On the East, the splendid 
Soviet Ai-mies have driven the invader from 
the sacred soil of Russia and are advancing further 
each day into the very heart of Germany. Day by 
day the Germans are being pushed back into their 
steadily retracting zone. Day by day the noose 
is being drawn tighter. Day by day their final 
and utter collapse is growing surer and more in- 
escapable. And the vast, swollen river of aggres- 
sion which, starting from its impure sources, five 
years ago threatened to overwhelm Europe has 
already shrunk to quite a manageable stream and 
will soon be dry forever. 

But when floods recede, filth and devastation re- 
main behind. Through eighteen active months in 
concert with our Italian friends, the Commission 
has been charged with the cleansing and purifying 
task. Wlien all the difficulties are understood, I 
believe America and Great Britain have nothing 
to be ashamed of, either in the spirit which has 
inspired its representatives in Italy or the efficiency 
with which they have done their work. 

The story has been one of quiet and steady prog- 
ress towards a clearly defined goal. The develop- 
ments which I have ventured to bring to your 
attention as having taken place since our last 
meeting, together with the specific and important 
changes which are now to become operative, are 
part of that policy. Great as are the difficulties 
which Europe has to face, let us not be downcast. 
Let us rather think, with a due mixture of pride 
and gratitude, of those from which she has already 
been rescued by the courage and sacrifice of our 
two peoples and our Allies. 



APRIL 1, 1945 



543 



UNRRA Agreement for Relief Program in Italy' 



PitiME Minister Ivanoe Bonomi and UNREA 
Italian Mission Chief Spurgeon M. Keeny an- 
nounced on March 9 that the Italian Government 
and the United Nations Relief and Rehabilita- 
tion Administration signed at Rome on March 8, 
1945 an agreement for a relief program in Italy. 

They hailed the agreement as a substantial step 
in the direction of providing a much-needed relief 
program for liberated Italy. ^ Prime Minister 
Bonomi said in a statement : 

"On behalf of the Government and of the 
Italian people I wish to 
express my warmest 
gratitude for the assist- 
ance which UNRRA is 
bringing to our country. 
This assistance is a no- 
ble act of human soli- 
darity by UNRRA as 
representative of 44 
United Nations com- 
prising most of the 
peoples of the earth. I 
have willingly accepted 
the basic principle of 
your work of assist- 
ance. This principle is 
summed up in the for- 
mula of helping people 
to help themselves. You 
make available, free of 
charge, $.50,000,000 for 
tlie relief of Italy, the 
equivalent, at the offi- 
cial rate of change, of 
5,000,000,000 lire. You 
ask that Italy, on her 
part, establish in her 
various budgets an ad- 
ditional 5 billion lire to 
make this assistance 
effective. Naturally it 
is our responsibility 
to bear the expenses of 



local transportation and administration and we 
have agreed to bear them in reasonable measure. 
This substantial amount of relief will be furnished 
to particular areas and, specifically, to refugees, 
to mothers and childi-en. Additional amounts will 
be provided by UNRRA for the fight against epi- 
demics. It will thus be possible to leave other 
fields of assistance entirely free to other generous 
international endeavors which will be vying with 
this work of human solidarity. As we sign with 
a grateful soul this convention which is a new link 



' Released to the press by 
UNRRA Italian Mission at 
Rome on Mar. 9, 1945. 

' BulijEtin of Jan. 7, 
1945, p. 29. 



Summary of the Principal Points of the Agreement 
Between the Italian Government and UNRRA 

1. UNRRA is to funiish supplies and services, costing up to $50,000,000 in 
foreign exchange, for three general programs in Italy : 

(a) Care of, and welfare services for, children and nursing and expectant 
mothers ; 

(b) Assistance in the care and return to their homes of Italian refugees; 
and 

(c) The provision of medical and sanitary aid and supplies. 

2. UNRRA is also to furnish supplies and services for two other programs: 

(a) Care of non-Italian refugees in Italy, and 

(b) Control of epidemics in Italy. 

3. The cost of these supplies and services incurred in foreign exchange is, 
under present arrangements, to be borne entirely by UNRRA, without charge of 
any kind to Italy. 

4. Except in connection with operations for the benefit of non-Italians, the 
Government will have, however, the responsibility for distributing all supplies. 
Distribution will be carried out by the Government in accordance with UNRRA 
principles and in accordance with plans agreed upon with UNRRA. 

5. As a contribution to the relief programs of UNRRA, the Government 
undertakes to bear the costs of the programs incurred in Italian currency in 
Italy up to an amount in lire matching UNRRA's foreign-exchanfxe expendi- 
tures. These costs include expenses of storage, transportation, and distribution 
of supplies and expenditures for the purchase of local fuel and produce to supple- 
ment food furnished by UNRRA. (A similar requirement is made by UNRRA 
of every country receiving its relief supplies.) 

6. Some of the .supplies furnished by UNRRA may be sold by the Government 
to recover part of its expenses but only to the extent that this does not deny 
relief to the needy. 

7. A joint committee of Government and UNRRA representatives will recom- 
mend terms of supplementary agreements covering such matters as methods 
of distribution, selection of recipients, amounts of supplies to be sold, and sale 
prices. 

8. Part of the funds made available by the Government will be used to pay the 
expenses in Italian currency directly incurred by UNRRA in Italy ; for its own 
administrative overhead (estimated at 2 percent) , and for the care of non-Italian 
refugees (estimated at 13 percent). 

9. The remainder of the funds will be available for payment of the Govern- 
ment's expenses under the program. 

10. UNRRA's mission and personnel in Italy are to be given diplomatic facili- 
ties and immunities corresponding to their position. 

11. The agreement is terminable upon six months' notice from either party. 



544 



DEPARTMENT OF STATE BULLETIN 



binding us to the 44 United Nations, I believe I 
may forecast that concord in benefaction, as soon 
as the war is over, will lead to a peaceful common 
life for all the peoples of the world." 

Spurgeon M. Keeny, Chief of UNRRA's Italian 
Mission, stressed the importance of Italy's full- 
fledged cooperation with UNRRA. He added 
that the agreement restated the program of assist- 
ance to Italy authorized by the UNRRA Council 
at Montreal. The Council's program called for 
care of, and welfare services for, children and 
expectant mothers ; assistance in the care and re- 
turn to their homes of displaced persons; and the 
provision of medical and sanitary aid and sup- 
plies. UNRRA expenditures of foreign exchange 
for these purposes will be up to $50,000,000. 

Another phase of the UNRRA program in Italy, 
Mr. Keeny stated, is directed to the care of dis- 
placed persons of United Nations nationality, 
stateless persons, and German-Jewish refugees. 
Also provided for are operations for aid in the 
control of epidemics such as anti-malarial and 
anti-typhus campaigns. 

UNRRA will, under the present arrangements, 
supply all imported goods without any charge to 
Italy. As in other countries receiving UNRRx\. 
supplies, the local government will bear the ex- 
penses incuri'ed locally in local currency in execu- 
tion of the relief and rehabilitation program. To 
cover the local expenditures the Italian Govern- 
ment has agreed to establish a 50,000,000 lire ad- 
vance and to add quarterly to the credit an amount 
in lire equaling the dollar expenditures by 
UNRRA. 

It is anticipated that by far the largest part of 
this lire fund will, with the agreement of UNRRA, 
be used by Italian Government agencies for such 
expenses of the relief programs as unloading, 
warehousing, transportation, and distribution of 
supplies, and for the purchase of fuel and local 
supplementary produce. It is expected that only 
a small part of this fund will be spent by UNRRA 
for its program of assistance to non-Italian refu- 
gees and for its own local administrative expenses. 

The program is designed to furnish about 
1,700,000 children and 300,000 pregnant and nurs- 
ing mothers, a total of 2,000,000 persons, with an 
average of 750 calories of additional food daily 
for a period of approximately one year. "It is 
important to note," Mr. Keeny said, "that such 
food is to supplement the basic rations provided 



by other authorities and that the UNRRA pro- 
gram will not in any sense replace any existing 
relief activity. Because of budget limitation, pri- 
ority will have to be given to children and mothers 
who are suffering most seriously from undernour- 
ishment and malnutrition. 

"Since our aid must be largely in the form of 
supplies it will be almost entirely dependent upon 
the shipping situation. Our funds, it is estimated, 
will provide an average of 15,000 tons of supplies 
monthly for one year. I can announce that the 
first 15,000 tons of shipping has been approved by 
the shipping authorities, and 5,000 tons of this 
are expected within the month, of which more than 
2,000 tons have been received." 

Mr. Keeny stated that "it is UNRRA's policy to 
make the fullest possible use of existing distribu- 
tion agencies. The functions of the UNRRA 
staff in Italy will be mainly in getting the supplies 
and planning, advising, and observation." 

"We are prepared," he declared, "to furnish 
medical and sanitary supplies to supplement those 
presently available. At the request of the Italian 
Government we will also furnish some medical 
personnel to render advisory service. 

"The aid planned for Italian refugees, both 
displaced and in refugee camps, includes furnish- 
ing supplies, such as food, made available to chil- 
dren and mothers as a part of the supplementary 
feeding program; providing clothing and camp 
supplies. Voluntary-society personnel, working 
under UNRRA's direction, namely: the Friends' 
Ambulance Unit, Save the Children Fund, Catho- 
lic Committee for Relief Work Abroad, Interna- 
tional Voluntary Service for Peace, and Jewish 
Relief Unit, have already been assigned to aid the 
Italian Government in refugee-camp-welfare 
maintenance, health and hygiene programs. The 
nature and scope of such assistance has been deter- 
mined after consultation with appropriate Italian 
Government authorities. 

"At the request of the military we are assuming 
responsibility for certain camps and hospitals in 
southern Italy now caring for refugees of United 
Nations nationality. As ne<:essity develops and 
with the concurrence of military authorities we 
may expand our program of assistance to such 
displaced jaersons as are not in refugee camps. In 
general we shall attempt to give relief to indi- 
vidual families as well as to persons assembled in 
camps. 



APRIL 1, 1945 



545 



"A program of epidemic control is being devel- 
oped in cooperation witli military authorities and 
the Italian Government. Oar part in such a pro- 
gram, in addition to furnishing expert advice, will 
include the furnishing of necessary imported sup- 
plies such as DDT, Paris green, screening, hand 
tools, sprayers, and atabrine tablets. Our first 
activity in this respect will be in aiding to control 
the growing threat in certain parts of Italy." 



Mr. Keeny said in further explanation that the 
appropriation of $50,000,000 for Italian relief, 
while under no time limit, was being budgeted for 
expenditure over a period of one year. He added 
that, on the basis of present plans, the non-Italian 
staff of UNRRA's Italian Mission is expected to 
consist of about 75 persons connected with the 
programs for the benefit of Italy and of about 150 
persons connected with the hospitals and centei-s 
caring for non- Italian refugees. 



International Cotton Advisory Committee 

DESIGNATION OF REPRESENTATIVES TO FOURTH MEETING 



[Released to the press March 29] 

The varioais governments which are participat- 
ing in the fourth meeting of the International 
Cotton Advisory Committee opening in Wasliing- 
ton on April 2 have designated the following 
persons to serve as their representatives: 

India 

S. K. Kii-palani, India Government Trade Commissioner 
and Acting Head of India Supply Mission, Wash- 
ington 
S. D. Chard, Cotton Adviser to the Government o£ India, 
Bombay, India 
Turkej/ 
Talha Sabuneu, Commercial Counselor, Turkish Em- 
bassy, Washington 
Union of Soviet Socialist Republics 
Mikhail M. Gousev, Chairman of the Board and Presi- 
dent, Amtorg Trading Corporation, New York 
Mexico 

Manuel Alcazar, Ministry of Agriculture, Ciudad JuSrez, 
Mexico 
Brazil 
Garibaldi Dantas, Chief, Cotton Classification Commis- 
sion, Sao Paulo, Brazil 
Deodoro I. Perrelli, President, Cotton Exporters Syn- 
dicate, Sao Paulo, Brazil 
Flavio Rodrigues, President, Cotton Growers Union, Sio 
Paulo, Brazil 
Peru 

Pedro Beltran, Ambassador, Peruvian Embassy, Wash- 
ington 
Juan Chavez, Minister Counselor, Peruvian Embassy, 
Washington 



British Cotton Exporting Colonies 

E. Melville, British Colonies Supply Mission, Washington 

J. P. Summerscale, First Secretary, British Embassy, 
Washington 
Egypt 

Mounir Bahgat, Agricultural Attach^, Egyptian Lega- 
tion, Washington 

M. A. Kilani, Ministi-y of Agriculture, Cairo, Egypt 

A. M. AUouba, Ministry of Finance, Cairo, Egypt 
French Cotton-Exporting Colonies 

Edouard Senn, Chief of Textile Division of French Sup- 
ply Mission, Washington 
United States of America 

L. A. Wheeler, Department of Agriculture 

E. S. Mason, Department of State 

C. C. Smith, Department of Agriculture 

C. D. Walker, Department of Agriculture 

The International Cotton Advisory Committee 
was established, in accordance with the recom- 
mendations of the International Cotton Confer- 
ence held in Washington in September 1939, for 
the purpose of keeping the interested countries 
abreast of developments in the world cotton situa- 
tion and of suggesting practicable measures from 
time to time for international collaboration in the 
solution of world cotton problems.^ 

In accordance with these continuing functions 
previous meetings of the Committee, all of them 
in Washington, were held on April 1, 1940, Oc- 
tober 17, 1940, and April 11, 1941, by which time 
war developments made further meetings imprac- 
ticable. The situation now is such that tlie Com- 
mittee can resume its normal activities. 



' Bulletin of Mar. 2.5, 1945, p. 475. 



546 



DEPARTMENT OF STATE BULLETIN 



Combined Reappraisal of 
Supply and Requirements 

JOINT STATEMENT BY THE DEPARTMENT OF 
STATE AND THE BRITISH EMBASSY 

[Released to the press March 28] 

During the war years, the governments of the 
United States, the United Kingdom and the 
British Dominions have worked together to ap- 
portion tlie essential foodstuffs, commodities and 
products available so as to insure that the neces- 
sary supplies were provided for the allied troops 
and to maintain the basic war economies of their 
own countries and of their allies. In recent 
months it has become apparent that the world food 
supply situation is becoming increasingly critical. 
This is largely due to the increasing requirements 
of our armies and those of our fighting allies, and 
of the areas which have been liberated from enemy 
occupation and in part to difhculties of transpor- 
tation and production. 

The governments concerned have met the con- 
tinuing and increasing requirements of our troops 
fighting a global war and, in addition, have sent — 
and are sending — substantial quantities of food 
and other essential supplies to the civilian popula- 
tions of the liberated areai-: — in Europe, in the 
Mediterranean and in the Pacific. Some of these 
supplies have been furnished directly by the 
United States, the United Kingdom and the Brit- 
ish Dominions, some have been retransferred out 
of stocks shipped to the United Kingdom on 
United States Lend-Lease or Canadian Mutual 
Aid. Our common resources have been used for 
the common end. Recently, however, whereas the 
demands which have to be met have been growing 
with the increasing progress of our armies, the 
supplies available have not increased commensur- 
ably. In order to be able to continue to meet 
these essential needs to the fullest extent possible, 
a combined re-appraisal of the whole supply and 
requirements picture will now be made. 

At the invitation of the President, the Prime 
Minister has now sent the Rt. Hon. Oliver Lyttel- 
ton, member of the War Cabinet, and the Rt. Hon. 
J. J. Llewellin, Minister of Food, to the United 
States to work out these difficult problems with 
highest authorities of the United States Govern- 
ment. All relevant factors will be discussed, in- 
cluding the levels of consumption and the reserves 



necessary to support the war effort in the countries 
concerned. 



Announcement Regarding 
Communications Facilities 
With Bulgaria and Rumania 

[Released to the press March 31] 

As of March 30, 1945, according to announce- 
ments of the Ti'easury and Post Office Depart- 
ments, communications facilities are available be- 
tween this country and Bulgaria and Rumania. 
Postal service will be open for communications to 
both countries. Telecommunication service with 
Bulgaria has also been restored, but telecommu- 
nications to Rumania are not being accepted for 
the present. 

Effective immediately, non-illustrated postcards 
and letters not weighing more than one ounce will 
be accepted for mailing to Bulgaria and Rumania. 
Communications may relate to business as well as 
i:)ersonal matters. Postage rates will be 5 cents 
for each letter and 3 cents for each card. Airmail, 
registration, money-order, and parcel-post services 
are not yet available. No facilities are available as 
yet for sending support remittances to Bulgaria 
and Rumania. The transmission of currency, se- 
curities, money orders, checks, drafts, or other 
financial instruments continues to be prohibited. 

The Treasury Department has announced that 
communications of a business, financial, or com- 
mercial nature which are limited to the ascertain- 
ment of facts and exchange of information may 
be transmitted to and from Bulgaria and Rumania 
without Treasury license. Accordingly, banks 
and other financial institutions may reply to re- 
quests for information from their customers. Doc- 
uments such as birth, death, and marriage certifi- 
cates, wills, commercial reports, and financial 
statements may be forwarded and solicited. 
Treasury licenses are still required for communi- 
cations containing instructions or authorizations 
to effect financial or property transactions. Con- 
cerns in the United States may correspond with 
firms in Bulgaria and Rumania with respect to the 
resumption of business relations, but private-trade 
transactions will not be licensed until arrange- 
ments for the resumption of private trade have 
been made. 



APRIL 1, 1945 



547 



Building the Peace ^ 

America's Good Neighbors' 



[Released to the press Maroh 31] 

Voice No. 1 : What 
happened to the Monroe 
Doctrine at Mexico City ? 

Voice No. 2: What is 
this Economic Charter 
for the Americas ? 

Voice No. 3: Wliat 
about Argentina? 

Announcer: Good 
questions. And for au- 
thoritative answers, 
NBC's University of the 
Air calls upon top ex- 
perts — officials of the 
Department of State it- 
self — in this, the sixth of 
a series of seven broadcasts on the problems of 
Building the Peace. Copies of all seven broad- 
casts are available on request. These programs 
are the most extensive attempt yet made to bring 
American foreign policy closer to the people. 
They are broadcast not only to this country but, 
through the facilities of the Armed Forces Radio 
Service, to our service men and women overseas, 
wherever they are stationed. 

This time the discussion concerns America's 
Good Neighbors — our sister republics to the 
south — and our policy toward them. Assistant 
Secretary of State Archibald MacLeish, the chair- 
man of the State Department programs, has with 
him Assistant Secretary Nelson Rockefeller, who 
is responsible for American republic affairs, and 
Mr. Avra Warren, Director of the Office of Amer- 
ican Republic Affairs in the Department. Later 
in the program our Ambassador to Cuba, Spruille 
Braden, will speak briefly from Habana. 

MacLeish : This is Archibald MacLeish. Our 
Latin American neighbors have been good neigh- 
bors indeed, at the time when we needed them 



PARTICIPANTS 

Archibald MacLeish 

Assistant Secretary of State 
Nelson Rockefeller 

Assistant Secretary of State 
Avra Warren 

Director, Office of American Republic 

Affairs, Department of State 
Spruille Braden 

Ambassador to Cuba 
Kennedy Ludlam 

Announcer for NBC 



' This program broadcast over the network of the Na- 
tional Broadcasting Company on Mar. 31, 1945 is the sixth 
in a series of seven broadcasts sponsored by the Depart- 
ment of State. 

638502 — 45 1 



most. When Japan at- 
tacked Pearl Harbor, 
and Hitler declared war 
on us, almost without 
exception the republics 
to the south immediately 
broke relations or de- 
clared war on the Axis 
nations. We have stood 
together in the common 
defense of the Americas, 
North and South, with 
each nation contributing 
what it could for the 
united war effort. 

Now, Nelson Rocke- 
feller here has been 
closely associated with our policy toward the 
Americas to the south. For four and one-half 
years, until his recent appointment as Assistant 
Secretary of State, he was Coordinator of Inter- 
American Affairs. He was a delegate to the recent 
Inter-American Conference on Problems of War 
and Peace at Mexico City. Mr. Rockefeller, mil- 
lions of us who didn't get to Mexico City were 
greatly impressed by the job that conference did. 
Rockefeller : That conference really marked a 
great step forward in the evolution of our inter- 
American system. The conference itself was 
called as a result of suggestions from the other 
American nations, and they took the lead time 
after time in proposing action and rounding out 
the whole program. 

MacLeish : Granted. But you don't need to be 
too modest. We thought the United States Dele- 
gation did a good job too. 

Rockefeller : The thing that struck me most 
about that was how the members of our Delega- 
tion, with their varied backgrounds, worked to- 
gether. Republicans and Democrats, representa- 
tives of business, labor, and agriculture all worked 
as a team. They were American citizens first of 
all — and I mean that in the broadest sense. They 
were citizens not merely of the United States, but 



548 



DEPARTMENT OF STATE BULLETIN 



of the Americas. And I want to add : the press 
and radio coverage of the meetings was magnifi- 
cent. There were 5G U. S. newspaper and radio 
men down there, and they did a mighty fine job 
of reporting. 

MacLeish : One immediate consequence of that 
meeting would seem to be evident this week in the 
Argentine Government's declaration of war 
against the Axis and formal adherence to the acts 
of Mexico City. What some people are asking 
now is whether this is a sincere move. 

KocKEFELLER : Well, Mr. MacLeish, we believe, 
on the developments to date, that the Argentine 
Government has reoriented its position both on the 
war and with regard to the American security 
system. The steps already taken in Argentina 
have been taken against the opposition of the ex- 
treme nationalists down there — judging from the 
reports. We look forward with confidence to the 
early fulfilment of our hopes and the hopes of the 
peoples of the Americas. 

MacLeish: Isn't it true that the Mexico City 
conference made it pretty clear that more than a 
declaration of war would be required to bring 
Argentina back into the society of American 
republics ? 

Rockefellek: Yes. We are following closely 
the day-by-day developments in Argentina. As 
you no doubt are aware, the first paragraph of the 
Argentine declaration of war announced their ad- 
herence to the final act of the Mexico City con- 
ference. This act provided clear and unequivocal 
resolutions including agreement to the acts in uni- 
son against acts of aggression; strict control of 
Axis persons and property; denial of asylum to 
and provisions for arrest of Axis war criminals. 

MacLeish: But what has Argentina done to 
back that up ? 

Rockefeller : Well, the final paragraph of the 
Argentine declaration of war provides: "The re- 
spective ministries . . . will adopt immediately 
the measures necessaiy for a state of belligerency 
as well as those required to put an end definitely 
to all activities of persons, firms and enter- 
prises . . . thatmight make an attempt against 
the security of the state or interference with the 
war effort of the United Nations or threaten the 
peace and good will, welfare and security of the 
American Nations." 

In accordance with that directive steps have al- 
ready been taken to suppress Axis propaganda. 



Japanese diplomatic and consular officers have 
been interned. The crew of the Graf Spee have 
been made prisoners of war. All Axis firms have 
been taken over. Axis funds have been blocked; 
this latter step should stop the use by Germans of 
any funds that they have accumulated in Argen- 
tina, thus eliminating the power and influence of 
their agents. 

MacLeish : And hasn't the Board of the Pan 
American Union acted on Argentina's recent dec- 
laration of adherence ? 

Rockefeller : Yes. At a special meeting today 
of the Board of the Pan American Union, the 
Ambassadors of the American nations unani- 
mously adopted the following resolution : 

"The Governing Board of the Pan American 
Union has noted with satisfaction the measures 
adopted by the Argentine Government. . . . The 
Board believes that these measures are in accord- 
ance with the criteria of Resolution 59 of the Con- 
ference of Mexico and, consequently, resolves to 
request the Director General of the Pan American 
Union to transmit the above-mentioned communi- 
cation of the Argentine Government, together 
with a copy of this resolution, to the President of 
the Inter-American Conference on Problems of 
War and Peace, His Excellency Ezequiel Padilla, 
with the view to the signature by Argentina of the 
Final Act of the Conference of Mexico." 

And let me add that Dr. Garcia Arias, repre- 
senting Argentina at the Board meeting today, 
stated that Argentina, in common with the other 
republics, is determined to preserve "the demo- 
cratic principles that constitute a common aspira- 
tion of the nations of this continent." 

MacLeish : We have had two types of criticism 
of our policy toward Argentina in the past, and 
from opposite sides. On one side is the Army 
lieutenant who says, "AVhat are we doing fighting 
all over the world to stamp out Fascism and dicta- 
torship, while we let it grow up in our own back 
yard?" That sort of criticism has grown more 
pointed since the Yalta declaration, by which we 
accepted joint responsibility for preventing the 
rise of new Fascist dictatorships in liberated 
Europe. On the other side it has been charged 
that by refusing to recognize the Argentine Gov- 
ernment we have been intervening in her internal 
aifairs and that this was causing the deterioration 
of inter- American unity. What is your comment 
on these conflicting points of view, Nelson ? 



APRIL 1, 1945 



549 



Rockefeller: This is a very important ques- 
tion, Archie, and I'm glad you asked it. A policy 
of intervention may be necessary in war-torn 
Europe. In the Western Hemisphere we have de- 
veloped other means of encouraging the growth of 
democracy. 

In 1933 President Roosevelt pledged this coun- 
try to a policy of non-intervention. Again in 1936 
together with the other American republics we 
renewed the pledge to a policy of not interfering 
with the internal affairs of the other nations of the 
hemisphere. In other words, it is up to the people 
of each country to work out their own internal 
problems as long as they don't interfere with the 
peace and security of their neighbors. 

MacLeish : And the result of that policy has 
been the withdrawing of our Marines from Haiti 
and Nicaragua. 

Rockefeller: Yes, and it is the basis for the 
security and free sovereign equality of small na- 
tions in this hemisphere. This policy is sound, 
not only from the point of view of the freedom 
of the individual country but also from the point 
of view of the gradual growth and development of 
democracy. You can't superimpose democracy 
by force from the outside — it must grow up from 
the people, and economic and social conditions 
must exist which encourage and permit its growth. 
For instance, you couldn't expect to create or main- 
tain democracy in a country in which a great ma- 
jority of the population is illiterate, simply by 
forcing that country to hold elections. 

MacLeish : There are a lot of people who argue 
that we shouldn't wait for a dictatorship to re- 
form itself. 

Rockefeller : I believe that true democracy can 
only be developed under conditions which nurture 
its growth. It is the policy of the United States 
to encourage and assist in the development of those 
forces which make for economic development, a 
rising standard of living, and the growth of de- 
mocracy. This means cooperation in the fields of 
education, health and sanitation, development of 
food supplies for internal consumption, trans- 
portation, industrialization, together with a free 
flow of information. All of these factors lead to 
the betterment of the conditions of life of the 
people, and encourage the growth of knowledge 
and understanding. For the past four and a half 
years the Office of the Coordinator of Inter- Amer- 
ican Affairs, with which I was formerly connected, 



has been working in all these fields throughout 
the Americas. 

MacLeish : And a grand job you and your col- 
leagues did, if you will let me say so. I happen to 
believe myself, as you have probably heard me say, 
that the relations between peoples as peoples — the 
relations for which we. use the rather inadequate 
word culhiral — are more important over the long 
run than the more dramatic and exciting relations 
which are referred to as diplomatic or political. 
Your work in health and sanitation brought the 
people of many of the American republics into 
direct and human connection with men and women 
of the United States. 

Rockefeller : The people of the Americas have 
come to realize that the democracy is a dynamic 
force which is working in their best interests. 
Don't you agree, Avra? 

Warren: Yes, I think that almost all of the 
people of the American republics generally have 
a definite democratic outlook. They all won their 
freedom the hard way, and they believe in free- 
dom for the individual. They want freedom of 
information — the Mexico City conference passed 
a strongly worded resolution on that. They all 
definitely want to move in the direction of self- 
government. And we're in complete sympathy 
with their democratic aspirations. 

MacLeish : The program in the cultural field 
which the Coordinator's Office turned over to the 
Department of State several years ago went even 
further in creating the common popular under- 
standings which are far more important in the 
long run than the diplomatic understandings, or 
even the treaties and agreements. I am sure you 
will agree to that. For myself, I believe that when 
the Department is authorized by legislation to 
extend its cultural program to countries outside 
the Western Hemisphere, we will enormously in- 
crease the understanding and the good-will and 
therefore the hope for peace as between our people 
and the peoples of other nations. 

Rockefeller: I agree entirely. I am a great 
believer myself in personal contacts — the kind of 
exchanges of students and of teachers which we 
worked out in the early days of our program in 
South America. That was a two-way proposition 
aimed at building better understanding at both 
ends and cementing our common ties in this hemi- 
sphere. 



550 



DEPARTMENT OF STATE BULLETIN 



MacLeish : Then, of course, over and above 
personal contacts, we have the opportunities of- 
fered by modem means of communication which 
put nations into the closest possible touch with 
each other and offer an opportunity for the devel- 
opment of mutual understandings such as we never 
had before. But let's get back to the work of the 
Mexico City conference. A cornerstone of the 
whole inter- American system adopted at Mexico 
City was the Act of Chapultepec. Most com- 
mentators up here felt that it was the outstanding 
achievement of the conference. Will you describe 
that act briefly, Avra, beginning with the name 
itself? 

Wauuen : The name, of course, came from the 
historic old Castle of Chapultepec, where the meet- 
ings were held. In brief, the act states very sim- 
ply that all of the American republics will con- 
sider an act of aggression against any one of them 
as an aggression against all, whether it comes from 
outside this hemisphere or from within. It is the 
last step to outlaw war in the Americas. One of 
the most gratifying points was that the initiative 
for the Act of Chapultepec came from the other 
American republics. 

MacLeisii : Just how does the act operate ? 

Warken : If any American nation shows signs 
of becoming an aggressor, whether by economic, 
political, or military means, the rest of the nations 
consult together. If it is apparent that aggres- 
sion threatens, all the consulting American states 
may take any of the following steps — break com- 
munications or interrupt economic, financial, and 
commercial relations with the potential aggressor. 

MacLeish : A quarantine, then. But peaceful 
pressure isn't always enough, as our experience 
with Japan has shown, Avra. 

Warren : If the aggressor is not discouraged by 
peaceful pressure, then armed force is to be used 
to prevent or repel aggression. 

MacLeish : What provided the drive behind all 
this? Colombia, Uruguay, and Brazil presented 
the original declaration of Chapultepec to the con- 
ference, I believe. Were they actually afraid of 
aggression from within the continent? 

Warken : Yes, Archie, there had been a grow- 
ing uneasiness about this during the past year or 
so — a fear which was reflected by the various gov- 
ernments of the Americas in increased expendi- 
tures for military purposes, at a time when danger 



of aggression from the Germans and Japanese was 
decreasing. These expenditures the countries 
could ill afford. They need the money for schools, 
health services, public works, and such things, 
which are important to a rising standard of liv- 
ing and the growth of democracy. 

MacLeish: I'd like to raise a question of basic 
importance at this point: Is the Act of Chapul- 
tepec inconsistent with the proposals we'll be spon- 
soring at San Francisco? One publication has 
declared that the act is a "strangely contradictory 
instrument for a sponsor of the Dumbarton Oaks 
program to support". 

Rockefeller : It isn't contradictory. 

MacLeish: Here's the issue: The Act of Cha- 
pultepec, as I understand it, calls for immediate 
action on the part of the American republics, by 
force of arms if necessary, against any aggression 
in this hemisphere. Eight? 

EocKEFELLER : Immediate action after consulta- 
tion, yes. 

MacLeish: Now, the Dumbarton Oaks Pro- 
posals say that "The Security Council should en- 
courage settlement of local disputes ... by such 
regional agencies," it's true. But they also say 
that "no enforcement action should be taken 
• • • by regional agencies without the authorization 
of the Security Council." Does this mean we'll be 
going to the San Francisco conference with a re- 
gional set-up which is inconsistent with that 
clause? 

EocKEFELLER : Not at all, Archie. The Act of 
Chapultepec itself provides that the new inter- 
American set-up "shall be consistent with the pur- 
poses and principles of the general international 
organization, when established." We all recog- 
nized that we've got to have world peace and 
security, first of all, if the Americas are to be 
secure from attack. The inter-American system 
and the world Organization have exactly the same 
objectives — world peace and security. 

MacLeish : Let me be more specific. Nelson : If 
there is armed aggression against any signatory 
nation in this hemisphere then the other American 
nations are pledged to consult and take immediate 
action. 

EocKEFELLER : Ycs. That provision became ef- 
fective immediately, and will continue for the 
duration of the war. That's necessary to insure 
against any disruption of our war effort. But 



APRIL 1, 1945 



551 



after that, the same provisions must be renewed, 
in the form of treaties, if they are to take perma- 
nent effect. By that time the world Organization 
will be taking shape, and the regional commit- 
ments can be reconciled with it. 

MacLeish : But meanwhile if these hemispheric 
guaranties — and I think we all agree that they're 
good ones — if these guaranties stand, and the 
Dumbarton Oaks Proposals are adopted, wouldn't 
something have to give somewhere ? 

EocKETELLER : No. As I said, the American re- 
publics are already committed to operating within 
the framework of the United Nations Organiza- 
tion to be set up at San Francisco. There can't be 
any conflict for that reason. 

MacLeish : Let's suppose that some American 
country should attack a neighboring country. The 
Act of Chapultepec calls for immediate action 
against the aggressor. But under the Dumbarton 
Oaks Proposals, the American nations would have 
to get the approval of the world Security Council 
before acting. Any one of the big powers not 
involved — the permanent members of the Coun- 
cil — could veto the proposal for regional action, 
even of a non-military sort. Or the Security 
Council might delay giving its approval. What 
then? 

Rockefeller: I'd say that would be most un- 
likely, in a clear-cut case of aggression, Archie. 

MacLeish: I'll admit that. But it is a possi- 
bility. 

Rockefeller : Yes. That's one of the problems 
that must and will be worked out at San Francisco. 
But whatever the solution, we — the American re- 
publics — are committed to working within the 
system set up there. 

MacLeish: Since the American republics have 
a common interest in problems such as this, will 
they go to San Francisco as a bloc? How about 
that, Avra? 

Warren : On the contrary. Of course, we have 
common interests, because of our geographical po- 
sition. But every American nation represented 
there realizes its responsibilities to the world and 
will be pulling first of all for a workable interna- 
tional organization. The results of the Mexico 
City conference have given all of the American na- 
tions a sense of security at home, which permits 
each one of them to go forth and take part in world 
affairs as individual, free, sovereign nations. 



MacLeish : Now, a lot of people have been ask- 
ing where this leaves the Monroe Doctrine. Is it 
dead, or just subordinated ? 

Rockefeller: The Monroe Doctrine was orig- 
inally a United States policy. For the last eight 
or ten years, it has become more and more the doc- 
trine of the Americas — it has been adopted by all 
the Americas. The Act of Chapultepec has com- 
pleted that trend, now that Argentina has decided 
to go along. The other nations have invited us to 
come in with them on the use of force to stop ag- 
gression — a great change from their past position. 
But I'd like to ask Avra Warren to give us a little 
background here. As one of the ablest Ambassa- 
dors in the Foreign Service, and a specialist on 
Latin America, as well as world problems, his ex- 
perience goes back much farther than mine in this 
field. 

MacLeish: Fine. Go ahead, Avra. Perhaps 
you could sketch the evolution of our policy from 
the Monroe Doctrine to Mexico City. That is, if 
you can cover more than a century of time, in say, 
a couple of minutes. 

Warren : That's a tall order, Archie. The orig- 
inal Monroe Doctrine in 1823 put a sign up on the 
shores of the Americas that said to the European 
countries: No more colonization, no attempts to 
take back the former colonies in this hemisphere. 
Signed, the United States of America. That was 
directed at the Holy Alliance, and we had the 
power of the British Navy behind us to help hold 
that alliance in check. And the new republics 
to the south of us were not averse to our position 
at the time. 

MacLeish : They only began to take exception 
to it when we intervened in their affairs, especially 
during and just after the first World War, when 
our troops were sent into the Caribbean area. But 
the good-neighbor policy put an end to that. One 
of President Roosevelt's first acts when he took 
office in 1933 was to withdraw the last of the 
Marines from Haiti. 

Warren: Yes, and that was the year of the 
Montevideo conference, where we made it clear 
that we would henceforth do nothing to interfere 
with the internal affairs of any American nation. 
That's the essence of the good-neighbor policy. It 
is not our policy alone. All the countries took the 
same pledge. 

ilAcLEiSH : Some of the other countries were 
suspicious of us at first. They thought that we 



552 



DEPARTMENT OF STATE BULLETIN 



were setting the stage for some new form of im- 
perialism, didn't they, Nelson? 

Rockefeller: Yes, but they were soon con- 
vinced that we really meant what we said. The 
Monroe Doctrine still stood, as a warning to out- 
side nations, but it received additional backing 
by 20 other American nations at Habana in 1940 
and at Rio de Janeiro in 1942. All the American 
nations told aggressors to keep out. They made 
it even stronger at Mexico City, with the Act of 
Chapultepec. 

MacLeish : In addition to the Act of Chapul- 
tepec, Nelson, what would you say were the main 
achievements of the Mexico City conference ? 

Rockefeller : I'd put the strengthening of the 
Pan American Union near the top of the list. 
Avra, do you want to go into that? 

Warren : The Pan American Union will be em- 
powered to act on matters of common military, eco- 
nomic, political, and cultural interests. It will 
act as a sort of board of directors for the American 
nations and will be vested with considerable politi- 
cal responsibility. 

MacLeish : In other words, it has been a con- 
sultative body on non-political matters in the past, 
but it is now going to be given political powers. 
How would these be exercised? What will the 
machinery be? 

Warren: The Governing Board of the Pan 
American Union will have regular meetings at 
least once a week here in Washington. They will 
be backed up — and this is most important — by an 
annual meeting of Foreign Ministers and by reg- 
ular four-year meetings of the American states. 
The machinery for adjusting all of the problems 
of the Americas will be met on those various levels. 

MacLeish: Just what actual powers would be 
added? 

Warren: The Pan American Union has been 
given jurisdiction over any question affecting the 
unity or solidarity of the American republics. 
This is a substantial new power of a political na- 
ture. Furthermore, the Pan American Union will 
arrange inter-American conferences, administer 
all inter- American agreements such as the Act of 
Chapultepec, bring together and codify all inter- 
American laws and declarations, draw up a char- 
ter further strengthening inter-American organi- 
zation. Then there has been created under the 
supervision of the Pan American Union an Inter- 
American Economic and Social Council to make 
studies and recommendations for the social prog- 



ress and raising of the standard of living of all 
the American peoples. 

MacLeish: Now, I'd like to bring up one 
further achievement of the Mexico City confer- 
ence: The Economic Charter for the Americas. 
What's the significance of that charter? 

Rockefeller : It's a long-range program, an out- 
line of goals. It's got to be implemented, of course. 
But it represents agreement on fundamental aims : 
for rising levels of living, equal access to raw mate- 
rials, reduction of trade barriers, free movements 
of capital, agreements for distribution of sur- 
pluses, and recognition of labor's rights. 

MacLeish : These aims are fine ; but one maga- 
zine writer has complained that the charter doesn't 
"get down to earth." Isn't the real question in 
the minds of the peoples of the other Americas 
what will happen in the very near future — when 
the war is over in Europe? After all, the war has 
almost doubled our trade with Latin America, and 
even dropping back to normal would have pretty 
severe results. To some countries, the transition 
from war to peace appears more dangerous than 
the war itself. 

Rockefeller : Yes, they're concerned most of all 
about what will happen to them after we cut oflF 
our purchases of war material but before normal 
civilian buying resumes. If the transition isn't 
handled carefully, some of the countries whose 
economies depend largely on exports might very 
well collapse and actual starvation might ensue. 
Economic collapse could lead to political disorders, 
which might impair the whole inter-American 
system and the future well-being and security of 
our own country. 

Warren : In 1933, when the depression was at its 
worst, 18 out of 20 of the other American repub- 
lics experienced revolutions. We've got to help 
maintain economic and political stability if we 
want to see the aims of the Economic Charter 
realized. 

Rockefeller : That's why we agreed to give as 
much advance notice as possible before we stop 
buying war materials. We've pledged ourselves to 
work together to maintain economic stability in 
the whole hemisphere during the transition period. 
MacLeish: There are some who like to accuse 
us of wanting to play "Santa Claus" when we try 
to work out a fair program for the transition. 

RocKEi-ELLER : I think Will Clayton made our 
position very clear down in Mexico City. We 
don't owe anyone anything. Each country has 



APRIL 1, 1945 



553 



done its part in its own and the group's best in- 
terest. We must consider our own interests first. 
But we know our interests can't be separated from 
those of the other American republics. We know, 
for example, that we've got to build up our foreign 
trade if we are going to maintain a national in- 
come of around 150 billion dollars such as we 
have now. And we can't do that if our good 
neighbors are down and out. The only way they 
can buy more from us is for them to enjoy higher 
earning power. 

MacLeish : Some people believe that industriali- 
zation would make competitors. 

Rockefeller: That's the old colonial concept. 
You've got to have markets, too. And industriali- 
zation furnishes markets for our products. That's 
pretty universally recognized now. You only have 
to realize that Canada, with 11 million people, 
buys more goods from us than we have ever sold 
in any one year to all of the 130 million people in 
Latin America. That's because Canada is highly 
industrialized, and has a high standard of living. 
Latin America wants to industrialize, too. They've 
got the dollar surpluses to do it with down there 
now, from selling us war supplies, and not being 
able to buy goods in return. 

MacLeish : Now, it's time we got Ambassador 
Spruille Braden down in Habana in on this dis- 
cussion, to add something on the special problems 
of the Caribbean countries. What do you say, 
Spruille? Come in, Habana ! 

Braden : ^ First I'd like to say, Archie, that 
everyone with whom I have talked here feels that 
the splendid accomplishments at Mexico City will 
unquestionably contribute to the solution of post- 
war problems. And they will be big problems 
for the Caribbean area. 

This area is of tremendous importance to us 
economically and geographically. For instance, 
Cuba last year was the largest exporter to the 
United States of all of the American republics 
and ranked third among them as a customer for 
American goods. Our direct investments in Cuba 
are the second largest which we have in the world, 
exceeded only by our direct investments in Canada. 
These facts are all the more remarkable considering 
that Cuba is only the size of the state of Penn- 
sylvania and has only about half as many 
inhabitants. 



' Owing to technical communication difficulties between 
Washington and Habana, Mr. Braden's remarks were not 
heard. 



Aside from the economic aspects, the strategic 
position of the Caribbean area is very important 
to the defense of the hemisphere. That is why it 
became imperative to establish military bases 
throughout the area. The Germans were fully 
alive to the vital strategic value of the Caribbean 
and had laid deep plans years before the outbreak 
of war in Europe placing fifth columnists in these 
countries. Fortunately all of the Caribbean coun- 
tries declared war against the Axis simultaneously 
with the United States. Moreover, long before we 
entered the war, steps were taken to curb the activ- 
ities of subversive agents. For instance, in Jan- 
uary 1939 the Nazis still had control of all the 
principal airlines, with 134 trained military pilots 
and other German technicians operating within 
only a few hundred miles of the Panama Canal. 
The Colombian Government took steps to end this 
situation, and by June 10, 1940 every last one of 
these dangerous elements had been eliminated, 
thereby averting what 18 months later might have 
been another Pearl Harbor at the Panama Canal. 
Here in Cuba there are hundreds of Germans and 
Japanese interned, and everyone is familiar with 
the case of Heinz August Luining, a dangerous 
Nazi who was captured and executed by the Cuban 
authorities in 1942. 

In other words, there is a very definite inter- 
dependence among all of the American republics 
both in war and peace, in trade and every other 
way. That's why we must all work together to 
solve our mutual post-war problems, and why the 
strengthening of the ties of friendship and coop- 
eration which was attained at Mexico City is of 
such importance to all of us. That's how it looks 
from Habana. 

MacLeish : Thanks a lot, Spruille. Now, here's 
a highly controversial question that frequently 
crops up in our State Department mailbag : What 
about the charge that we have employed only 
Catholics, or that we have played up Catholicism 
excessively in our relations with Latin America? 
A recent magazine article claimed that we had 
antagonized some elements in the Latin American 
countries by leaning too far in that direction. 

Rockefeller : We follow a strict policy of non- 
intervention in religious matters. We have been 
attacked for not having enough Catholics in our 
missions to Latin America as well as for having 
too many. We just pick the best man for the job. 
Freedom of religion is one of the four freedoms, 
and we adhere to it straight down the line. 



554 



DEPARTMENT OF STATE BULLETIN 



MacLeish : That policy was put down in black 
and white last week in a directive which the State 
Department sent to informational agencies deal- 
ing with international problems. It reads: "The 
policy of the United States Government in the 
dissemination of information abroad, where ques- 
tions of religion are involved, is determined by the 
United States constitutional guaranty of freedom 
of worship. All denominations will be treated 
alike, and no denomination will be singled out for 
special treatment." 

Warren : As a matter of fact, Archie, I don't 
think that anyone ha.s ever figured out how many 
of the officers of the Department of State who deal 
with the Latin American countries are Catholics 
and how many are Protestants. There are, of 
course, some countries where attitudes toward re- 
ligion are extremely conservative and where there 
have been objections to some aspects of Protestant 
and Evangelical activity. But the Department, 
in working out with the various other American 
states relationships on cultural and educational 
lines, does not support either Catholic or Protes- 
tant institutions as such. 

MacLeish : Another criticism we sometimes get 
is that we have bolstered the non-democratic gov- 
ernments by supplying them with guns and tanks 
during the war which they used against the op- 
position. What do you say to that. Nelson ? 

Rockefeller : There is no question that putting 
armaments in the hands of strongly centralized 
governments does not encourage the growth of 
democracy. But there has been only one guiding 
objective in the distribution of armaments among 
the American nations during the war. That was 
the vital consideration of the defense of the West- 
ern Hemisphere and the security of the United 
States itself. In this we have had the whole- 
hearted and effective cooperation of all the Gov- 
ernments which have received lend-lease equip- 
ment. 

MacLeish : To sum up, then, our policy toward 
our neighbors in Latin America is to try to be good 
neighbors ourselves. We feel our interest* coin- 
cide with theirs. We are especially proud of our 
joint achievements at the Mexico City conference 
in guaranteeing security against aggression, 
taking measures to prevent an economic collapse 
in Latin America which might endanger our pros- 
perity as well as theirs, and increasing the stabil- 
ity of the inter-American system. We are glad 



that Argentina has seen fit to end its isolation 
from the rest of the hemisphere. We want to see 
democracy grow throughout the Americas. We 
don't think direct intervention is the best way 
to bring about democracy ; rather we want to help 
create the conditions which will encourage demo- 
cratic life and institutions — higher standards of 
living, health and education. For our mutual 
benefit, we intend to encourage the growth of new 
industries in the republics to the south of us, and 
to encooirage an ever-increasing exchange of goods 
and skills and ideas among all of us. Above all, we 
want the peoples of the Americas to know each 
other. 

Announcer: That was Archibald MacLeish, 
Assistant Secretary of State in Charge of Public 
and Cultural Relations. With him were Assist- 
ant Secretary Nelson Rockefeller and Mr. Avra 
Warren, Director of the Office of American Re- 
public Affairs. This was the sixth in a series of 
seven programs arranged by NBC's University of 
the Air and featuring top officials of the State 
Department on the problems of Building the 
Peace. If you would like a copy of this broad- 
cast, or of all seven, write to the Department of 
State, Washington 25, D. C. 

Next week you will hear the final program of 
this State Department group, a program entitled 
"It's Your State Department." Assistant Secre- 
tary of State Archibald MacLeish will be back 
again. With him will be Assistant Secretary 
Julius Holmes, who is in charge of administration 
in the Department, and Mr. Michael J. McDermott, 
Special Assistant to the Secretary of State in 
Charge of Press Relations. They will answer such 
questions as these: 

Voice No. 1 : Wliat is our Foreign Service do- 
ing to prevent Axis leaders and their money from 
finding a "safe haven" in neutral countries? 

Voice No. 2 : What is the Department's "new in- 
formation policy"? 

Voice No. 3 : How does the cultural-cooperation 
program work out? 

Annottncer : Following next week's broadcasts, 
ranking members of the Senate Foreign Relations 
Committee will be heard, after which the series 
will move out to San Francisco for the United 
Nations Conference. 

This program came to you from Washington, 
D. C, the Nation's capital. This is the National 
Broadcasting Company. 



APRIL 1, 1945 



555 



Basic Data on the Dumbarton Oaks 

Proposals 

ANNOUNCEMENT BY THE DEPARTMENT OF STATE 



The pictorial chart and the four Foreign Affairs 
Outlines appear below. 

The Outlines, prepared in response to the grow- 
ing demand for appropriate study and discussion 
materials, are designed for the use of speakers and 
discussion leaders. 

The Proposals,' with the chart as a center spread 
may be secured in an eight-page folder 8" x IQi/o". 
Each one of the Foreign Affairs Outlines appears 
in a separate four-page folder 8" x IQi^", and 
these are available as a set of five pieces including 
the eiglit-page folder. 

The pictorial chart, 21" x 27" in two colors, is 
available for wall display. 

Requests shoidd be addressed to the Division of 
Public Liaison, Department of State, Washington 
25, D. C. 



[Released to the press April 3] 

The State Department has prepared a series of 
pamphlets containing basic data about the Diun- 
barton Oaks Proposals. These pamphlets are 
now ready for distribution to individuals and 
organizations which have asked the Department 
for such information. 

The demand for official information about the 
Dumbarton Oaks Proposals has been very great. 
Church federations, business, farm and labor or- 
ganizations, service clubs, women's clubs, and 

' Printed in BuLumrr of Oct. 8, 1944, p. 368, and Mar. 11, 
IWS, p. 394. 

638502 — 45 5 



international-relations groups have asked for mil- 
lions of copies of literature to distribute to their 
members. In addition, individual requests have 
been received by the Department at the rate of 
several thousands a week. 

Included in the material being released are a 
pictographic chart showing the structure and func- 
tions of the proposed United Nations Organiza- 
tion, the full text of the Dumbarton Oaks Pro- 
posals, and a series of "Outlines" discussing the 
operations of the proposed Organization. The 
pictographic chart will also be available in a size 
suitable for wall exhibition. 




THE UN^^»ATIONS 

AN ORGANIZATION FOR^^AND WORLD PROGRESS 




ENCOURAGES NATIONS TO COOPERATE 



5e«ki loTuHoni lo pfeuing political, economic, c 
Iwlpi notionj )o coop«rat» in wiving them. 



d social probl«na and 




PROMOTES PROSPERITY 

H«lp» notioni work toQOthftf for post-war reconjtrvction, Increottd Irade, 
dep»ndoble money, and economic developinenl. 




ADVANCES SOCIAL PROGRESS 



Helpi notioni to roiM itondords of Tiving, health, and educotion to ochiovo 
o richer life for all. 




FOSTERS FREEDOMS 

C.lfi,al„ reipeO fo, h„™„ Hjhn ond fundamental freedom., to Inier. 
me tree How ol knowledge eiientiol to motenal ond iplrihol growth. 




COORDINATES INTERNATIONAL AGENCIES 

lurei eoofdinntlnn ««-) . 



•ion.:"„r,™lV;ablZ"°"" °"°"' "" '"'""--""l 0'9=ni.a.- 




INTERNATIONAL ORGflNIZflTION PROPOSED AT DUMBARTON OAKS 

The Proposals were recommended to their a''™'™';"'^,' 'j! ?'"" ?"<* released on October 9, 1944. They ore ofFered for full 
representatives of the United States, Great Britain, U»K, ''"""'"bythegovernmentsandpeoplesoftheUnitedNations. 






ADMITS NEW MEMBERS TO UNITED NATIOI^S ^p f"""!ff|, nJ^I'MATION 

erino, in new member notion. and, if ne.e.».y in the i"»'."»«' ASK '™» "8liAR|AN 

peoce, expel, member, or w.pond. their righh ond privilefl*. 



MAKES PLANS TO CONTROL ARMAMENTS 

Elaborate, ploni lor the regulotion and limitotlon ol armament.. 




INVESTIGATES DISPUTES BETWEEN NATIONS 

Rnds out about differences or disputes betwaen nations that might lead 
to international friction or couse o threat to the peoce. 




SEEKS PEACEFUL SETTLEMENTS 

Urges notions to s«tt)» fheir d'isputes by peaceful meons, including appeal 
to the Intemotional Court of Justice. 




DECIDES ON MEASURES TO KEEP THE PEACE 

Security Council decides what steps should be token If a dispute continues 
ond wor is threatened. 




TAKES POLITICAL AND ECONOMIC ACTION 
CM oil trode, tomitiunicotion and diplomolic r.lotion. with notior» 
threatening the peace. M«nb.r nation, cooperal. o. requ-tii 




TAKES MILITARY AOION 



A. a loit revjrt, um armed contingent, of United Noliof>i to keep or 
rertore the peace. Military Staff Committee odYiuii on be.t uu ol lotcev 



558 



DEPARTMENT OF STATE BULLETIN 



Foreign Affairs Outlines on ''Building the Peace" 

War — How Can We Prevent It? 



OutUne No. 1 ' 



Peace Is Everybody's Business 

In the coming months the foundations of peace 
will be laid. We want to make the best possible 
start. This means that the peoples of the United 
Nations must understand what is at stake, and what 
is proposed. 

The Foreign Affairs Outlines prepared by the 
Department of State set forth in simple terms what 
this Government is doing or proposing. These 
Outlines give factual information for American 
groups interested in studying and discussing these 
vital public policies in their own way. 

I hope every American will participate in dis- 
cussion of these subjects during the coming months 
and will attempt to make up his mind about them. 
The Department of State will be glad to receive 
individual and group expressions of opinions on 
these crucial problems. 

Edward R. Stettinius, Jr., 

Secretary of State. 



A PLAN FOR PEACE 

How Was It Prepared? 

At Dumbarton Oaks — an estate in Washing- 
ton, D. C. — experts from the United States, Great 
Britain, the Soviet Union, and China considered 
from every angle the problems of peace and se- 
curity. They studied previous attempts to build 
and keep the peace. After long preparation and 
weeks of discussion they submitted proposals for 
an international organization which they believed 
would constitute a sound basis for a charter to be 
drawn up by a conference of all United Nations. 

These Proposals, though not complete on all 
points or stated in final legal terms, were put before 



the peoples of the United Nations for their careful 
consideration. 

How Does the Plan Approach the Problem? 

The experts, including our own, agreed that an 
international organization could try to prevent 
wars in two ways: 

I. By dealing firmly and quickly with each dis- 
pute as it arises, using united force, if neces- 
sary, to prevetit or stop armed conflict. 
(This is the subject of this Outline.) 

1. By promoting the well-being of all nations 
and peoples. (This is dealt with in the 
next three Outlines.) 

Four Principles 

Secretary of State Stettinius has stated the fol- 
lowing principles underlying the Proposals for 
keeping the peace: 

1. "Peace can be maintained only if the 
peace-loving nations of the world band to- 
gether for that purpose. In doing so, they 
have to recognize that each state has a right to 
a voice in the affairs of the family of nations ; 
but also that nations are not equal in their 
power to prevent war. 

2. "War can be prevented only if the great 
powers employ their dominant physical power 
justly and in unity of purpose to that end. 
Hence the prominence given to the Security 
Council, in which the United States, Great 
Britain, and the Soviet Union, China, and 
France would hold permanent seats. 

3. "To prevent and suppress wars is not 
enough. If we are to have lasting peace, we 
have to budd peace. Hence the need for a 
General Assembly which, as the highest repre- 

" Printed separately as Department of State publication 
2300. 



APRIL 1, 1945 



559 



sentative body in the world, will extend the 
rule of law in international relations, and 
advance the material and cultural welfare of 
all men. 

4. "As peace becomes more secure, arma- 
ments can and should be reduced progressively 
on a world-wide basis." 

WHAT IS PROPOSED? 

Six main points are made in the Proposals on 
the problem of keeping the peace: 

1. Renounce Use of Force 

We, and every other nation joining the United 
Nations Organization, would obligate ourselves 
to settle our disputes only by peaceful means, and 
not by force or die threat of force. 

2. Investigate Disputes 

Disputes between nations that might cause fric- 
tion or lead to war would be thoroughly studied 
by the United Nations Organization. 

Any country, whether it is a member of die Or- 
ganization or not, could bring a dispute to the 
General Assembly of all member nations or to the 
Security Council of eleven members (United 
States, Great Britain, Soviet Union, China, and 
France are permanent members and six nations are 
elected periodically by the Assembly). The 
Security Council would be on the job all the time. 

3. Seek Peaceful Settlements 

Several ways of settling a dispute could be 
recommended by the Security Council or by the 
General Assembly. 

Urge the nations involved to get together and 
work out the problems to their mutual sat- 
isfaction. Propose some solution to them. 

Ask them to submit their difference to a third 
party for mediation, conciliation, or arbitra- 
tion. 

Recommend that they take a dispute involving 
legal questions to the International Court of 
Justice. 

4. Take Political and Economic Action 

Should the Security Council consider the above 
methods inadequate, the Proposals further provide 
for the enforcement of peace by non-military 
measures — diplomatic and economic. 



Diplomatic action might be taken, cutting off 
relations with nations threatening war. 

Communications might be broken — stopping 
trains, ships, letters, cables, or telegrams from go- 
ing into or out of the nation threatening to break 
the peace. 

Economic boycott might be used to withhold cer- 
tain important supplies or materials, or trade with 
an offending nation might be completely stopped. 

Conditions Necessary to Success of These 
Actions 

For such economic and political measures to be 
successful the member nations, particularly the 
great powers, would have to cooperate fully in 
applying them without delay. 

Force to back them up would have to be organ- 
ized and ready for immediate use in case the eco- 
nomic measures prove insufficient to stop an 
aggressor. 

5. Take Military Action 

The Security Council would decide when and if 
united force should be employed. Force is consid- 
ered the last resort. But in a crisis it might have to 
be used before other methods could be employed. 
This would depend on the nature of the threat to 
peace. 

A Military Staff Committee composed of the 
chiefs of staff of the five permanent members of 
the Security Council or their representatives would 
advise the Council on military matters. This 
Committee would plan for effective use of the 
united forces pledged by the member nations. 

Why not an International Police Force.' 

The military experts at Dumbarton Oaks felt 

that national contingents of land, sea, and air forces 

would be more practical than an international 

police force for these reasons: 

Standing forces of member nations would be 

available at all times near any place where 

they might be needed to quell a disturbance 

of the peace. 



560 



DEPARTMENT OF STATE BULLETIN 



The United Nations have among them good 
military bases in all parts of the world. 
Effective action vi^ould depend on forces 
trained at widely distributed bases, ready for 
speedy movement. 

Effective military force requires national sup- 
port — munitions, equipment, training, disci- 
pline, tactics, and the like. 

6. Advise on Regulation of Armaments 

The Organization would make plans for the 
reduction and regulation of armaments to submit 
to the member nations. The General Assembly 
of all member nations, the Security Council, and 
the Military Staff Committee would work on this 
problem. A sense of security is probably necessary 
before nations will be willing to reduce arma- 
ments. It is assumed that peace-loving nations do 
not want to divert any more of their resources to 
arms than may be necessary. Successful coopera- 
tion in keeping the peace could pave the way for 
a general reduction of the burden of armaments. 

How the Security Council Votes 

1. Each member of the Security Council, con- 

sisting of five permanent and six elected 
members, would have one vote. 

2. Decisions on matters of procedure would be 

made by an affirmative vote of any seven 
members. 

3. Other decisions would be made by an affirma- 

tive vote of seven members including all 
the permanent members, except that in all 
matters regarding the investigation of dis- 
putes and their peaceful settlement, no party 
to a dispute would be entitled to vote. 

This means that where the Council is engaged in 
performing its function in the peaceful settlement 
of disputes, no nation, large or small, would be 
above the law. Where the Council is engaged in 
performing its political functions of action for 
maintaining or restoring peace, a unanimous agree- 
ment among the permanent members (United 



States, Great Britain, Soviet Union, China, and 
France) would be required. 

Regarding these Proposals, Secretary of State 
Stettinius said: 

"Where the Council is engaged in performing 
its political functions of action for mainte- 
nance of peace and security, a difference is 
made between the permanent members of the 
Council and other nations for the practical 
reason that the permanent members of the 
Council must, as a matter of necessity, bear the 
principal responsibility for action. Unani- 
mous agreement among the permanent mem- 
bers of the Council is therefore requisite." 

WILL THIS WORK? 

Because the previous attempt to keep the peace 
through the League of Nations did not prevent this 
war, people wonder whether the proposed Organi- 
zation could succeed. This is a matter of opinion, 
but there are certain facts which should be con- 
sidered in discussing it. 

How Does It Differ From the League.'' 

The United States was not a member of the 
League. It is proposed that we shall be a member 
of the new Organization. 

In contrast to the League Covenant, unanimity 
of all the members of the General Assembly and 
of the Security Council would not be required. 

We and all other nations would make special 
arrangements to supply certain types and quantities 
of armed forces to back up the decisions of the 
Security Council, whereas the League had neither 
armed force nor a military staff committee. 

The Security Council would be in continuous 
session. 

These are the main differences that bear on the 
problem of preventing the outbreak of war. 

Could It Prevent All Wars? 

No one can predict the future, but certain ques- 
tions at this point may help clarify the discussion. 
Do you think the Security Council could enforce 
its decisions in cases where small nations 
may be involved ? 



APRIL 1, 1945 



561 



Would the Security Council be able to prevent 
a major power from going to war ? 

Do you think that cooperation in an interna- 
tional organization and the force of world 
opinion would help to preserve peace among 
the major powers ? 

What Is Needed To Make It Work? 

The President in his address to Congress on 
March i, 1945 said: 

"No plan is perfect. Whatever is adopted 
at San Francisco will doubtless have to be 
amended time and again over the years, just 
as our own Constitution has been. 

"No one can say exactly how long any plan 
will last. Peace can endure only so long as 



humanity really insists upon it, and is willing 
to work for it — and sacrifice for it." 

CHOICE BEFORE US 

The Proposals put on paper at Dumbarton Oaks 
show a large area of agreement among the prin- 
cipal United Nations and will form the basis 
of the discussions between all the United Nations 
at San Francisco. 

The Charter drafted at San Francisco will be 
presented to the nations for their decision. Each 
nation will decide for itself whether to adopt and 
support that Charter, or reject it and seek its 
security and welfare in other ways. 



OFFICIAL PUBLICATIONS 



Consult Your Librarian 



Items marked with • may be procured at the price shown from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington 25, D.C., or, if free, from the agency named. 

The United Nations: Dumbarton Oaf(^s Proposals for a 
General International Organization (text, with pic- 
torial chart). Department of State pubhcation 2297. 
1945. 8 pp. Free. 

Wall Chart (in two colors, with illustrations, showing 
proposed structure and functions of United Nations 
Organization). Department of State publication 
2280. 1945. 27 X 21 inches. Free. 

Building the Peace (radio series of 7 broadcasts on foreign 
policy, featuring discussions with high officers of the 
Department of State: the first 2 programs related to 
proposals for international organization). Depart- 
ment of State publications 2288, 2289, 2290, 2291, 
2292, 2293. Free. 

"Toward the Peace — Documents (revised edition of War 
Documents; basic documents from Atlantic Charter, 
1941, to Act of Chapultepec, 1945, including text of 
Dumbarton Oaks Proposals). Department of State 
publication 2298. 1945. 40 pp. 15^. 

*What the Dumbarton Oa\s Peace Plan Means. Edward 
R. Stettinius, Jr., Secretary of State. Department of 
State publication 2270. 1945. 13 pp. 50. 



*Conference of Allied Ministers of Education. Ralph E. 
Turner and Hope Sewell French. Department of 
State publication 2221. 1944. 10 pp. 50. 

The Bretton Woods Proposals. Treasury Department. 
1945. 13 pp. Free. 

Articles of Agreement — International Monetary Fund 
and International Ban\ for Reconstruction and Devel- 
opment (United Nations Monetary and Financial 
Conference, Bretton Woods, New Hampshire, July i 
to 22, 1944). Treasury Department. 89 pp. Free. 

The President's Message to Congress . . . Bretton 
Woods. February 12, 1945. Treasury Department. 
8 pp. Free. 

First Report to the Governments of the United Nations 
by the Interim Commission on Food and Agriculture. 
United Nations Interim Commission on Food and 
Agriculture, Washington 8, D.C. 1944. 55 pp. 
Free. 

"United Nations Conference on Food and Agriculture: 
Final Act and Section Reports. Department of State 
publication 1948. 1943. 65 pp. 200. 

The International Labor Organization — What it is, how 
it wor\s, what it does. International Labor Organ- 
ization, Washington 6, D.C. 1944. 8 pp. Free. 

UNRRA: Organization, Aims, Progress. United Na- 
tions Relief and Rehabilitation Administration, Wash- 
ington 25, D.C. 1944. 34 pp. Free. 



562 



DEPARTMENT OF STATE BULLETIN 



Outline No. 2' 



Prosperity — How Can We Promote It? 



Certain common wants of people everywhere 
determine the goals of any proposals for inter- 
national action. 

Jobs at Good Wages 

Buyers for the products of labor make jobs. 
Many American workers, like workers in other 
countries, depend on purchasers abroad. 

Good Business 

Businessmen who organize production and dis- 
tribution buy raw materials and other goods from 
all over the world. They also want to sell every- 
where, not merely in their home town or nation. 
To buy and sell abroad they need stable foreign 
currencies and freedom from excessive trade 
barriers. 

Markets for Farm Products 

Farmers tend to be prosperous when they can 
sell all they grow at good prices. 

Many countries depend upon foreign markets 
to take a part of their agricultural output. The 
welfare of American agriculture like American 
industry depends in part on foreign markets. 

Better Things at Lower Prices 

Consumers want to get as much for their money 
as possible. They want a market place full of 
attractive choices — goods from the four corners of 
the earth. 

Proposals for a United Nations Organization 
made at Dumbarton Oaks call for die establish- 
ment of an Economic and Social Council function- 
ing under the General Assembly to help nations 
work toward a healthy and balanced economic life. 
Proposals for special organizations to work on 
specific problems were made at Bretton Woods 
(finance and currency), at Hot Springs (food and 
agriculture), and at Chicago (aviation). Still 
others may be developed. 



The plans made thus far do not purport to 
provide complete answers to all the perplexing 
international economic questions. 

THREE R'S OF THE POST-WAR PERIOD 
Relief 

This is both an economic and a social problem. 
National and international organizations as well as 
private agencies are now working on it. Allied 
military authorities, the national governments con- 
cerned, and UNRRA have parts to play in a well- 
rounded program. 

During the first i8 months after liberation of 
Europe, the Foreign Economic Administration 
estimates that loo billion dollars' worth of goods 
will be needed. 

Local production in the countries affected is 
expected to meet more than 90 percent of the need. 

The liberated nations having foreign exchange 
or credit indicate that they will buy and import 
about 7V2 billions from overseas. 

Less than 2 billion dollars in supplies is planned 
as contributions from uninvaded countries. 

Rehabilitation 

If self-help in the war-torn countries is to meet 
most of the needs, transportation systems must 
be put in working order, public utilities restored, 
factories repaired and reequipped, farmers pro- 
vided with tools, seeds, and fertilizers. 

Military authorities have begun the job because 
it is essential to maintain civil order and their lines 
of communication and supply. UNRRA will 
help governments needing basic assistance to carry 
the work forward during the emergency period. 

The longer-range task of economic rehabilita- 
tion calls for credit and for technical help from 
national or international agencies such as the ones 
proposed at Bretton Woods and at Hot Springs. 

' Printed separately as Department of State publication 
2301. 



APRIL 1, 1945 



S6B 



Reconstruction 

Long-term investments are proposed to finance 
reconstruction and development programs over 
the years. Economic experts, representing 44 
United Nations, at Bretton Woods recommended 
that their governments set up an International 
Banl{ for Reoofistruction and Development. 

Hotv Would an International Bank Work? 

Most of the capital of this Bank would be used 
to guarantee loans made by private investors. 
When private capital is not available on reason- 
able terms, the Bank would itself finance produc- 
tive projects. 

Loans would be handled so as to bring about 
a smooth conversion from wartime to peacetime 
economy. 

They would also be arranged so that the most 
useful and urgent projects would be dealt with 
first. 

In addition to reconstruction of devastated coun- 
tries, the proposed Bank would assist in building 
up productive facilities in less developed coun- 
tries. One of its purposes is to promote a steady 
increase in trade between nations. Investments 
in undeveloped parts of the world are proposed 
to open up new opportunities for trade. 

WORLD TRADE 

A variety of proposals have been made to 
achieve a better world economy by encouraging 
maximum trade among nations. 

Problem of Stable Money 

People engaged in international trade require 
stable exchange rates. Each country has its own 
money system, but its money is of no use inside 
another country. 

A government has the power to change the 
value of its money. While for various reasons 
such a change might seem a good domestic policy, 
it might upset world trade. Again, one country 
might wish to encourage exports by offering its 



currency at bargain rates to foreigners. But other 
countries would probably retaliate in a sort of 
currency "price-cutting" war, which would be 
fatal to stable exchange rates and, in the long run, 
to trade and prosperity. 

Exchange rates may change greatly from other 
causes. For example, if many traders want the 
currency of a particular country, that currency may 
become scarce and more expensive. 

Obviously, bad economic conditions, arising 
from any cause, will tend to make exchange rates 
unstable. But this is a vicious circle: unstable ex- 
change rates also make bad economic conditions 
worse. 

What Is the Monetary Fund? 

The representatives of the United Nations at 
Bretton Woods proposed that an International 
Monetary Fund be created to deal with this 
problem. This is the nub of that proposal: 

Each member nation would subscribe an agreed- 
upon amount of its own currency and 
gold to the Fund. This Fund would then 
be used to help countries when they face 
temporary difficulty in getting currency of 
another country. 

Member governments would agree on certain 
exchange rates and not to change them 
greatly without die approval of the Fund. 

They would agree to abolish where possible 
restrictions on the purchase and sale of 
foreign currencies, and also not to manipu- 
late their currency so as to discriminate 
against traders of another country. 

The Fund would provide machinery to enable 
member nations to consult with each other 
and would assist them in making orderly 
arrangements for exchange stability. 

Government-Imposed Restraints on Trade 

One barrier to trade is a high tariff on imports. 
But there are other barriers to world trade. Dur- 
ing the depression, the "pie" of foreign trade be- 
came smaller, and each government tried to get a 



564 



DEPARTMENT OF STATE BULLETIN 



larger slice for its own producers. Each took 
drastic action to keep out imports and to increase 
exports. Examples are: 

A government decrees that only a certain quan- 
tity or "quota" of a given article can be 
imported from a given country. 

Foreigners are prevented from being paid for 
imported goods purchased from them unless 
they buy certain quantities of goods pro- 
duced in the importing country. (Ger- 
many used this device to take advantage of 
countries which had only a few things to 
sell and sold them largely in Germany.) 

A government gives financial support to an 
industry so that it can undercut foreign 
competitors. 

These devices lower the levels of total trade. 
They are almost invariably used to discriminate — 
that is, to give one country's producers advantages 
over those of another country. Such discrimina- 
tion causes resentment and hostility in the country 
which suffers from it. It leads to retaliation and 
to economic conflict. 

It is difficult for any one government to reduce 
its trade barriers unless one or more other govern- 
ments do the same thing at the same time. One 
way of getting action is to make an agreement with 
ot2e other country at a time (a bilateral agreement). 
This is what we have been doing since 1934 by 
making reciprocal trade agreements. 

Another way to bring about the same result 
would be for many countries to make a single 
agreement among themselves — a multilateral 
agreement. Some things may be done through 
the bilateral method — other things by the multi- 
lateral method. 

It is proposed that various specialized economic 
agencies and committees affiliated with the United 
Nations Organization work together to reduce or 
end trade obstructions and discriminations. 

Privately Imposed Restraints on Trade 

Business enterprises sometimes form cartels — 
that is, agree among themselves to adopt certain 



measures to avoid competition. Although mem- 
bers of an international cartel may do business 
separately for their own profit, they often act to- 
gether to divide markets and maintain prices, thus I 
restricting total trade. In some countries, such as 
Germany, powerful monopolies have worked 
closely with the governments to win both economic 
and political power over other lands. 

The American Government proposes to act by 
itself and also to cooperate with other nations 
through international agencies to end the political 
activities of cartels and to prevent cartel prac- 
tices which restrict the flow of trade between 
countries. 

Special Agreements on Trade Problems 

Some products — wheat, cotton, coffee, sugar, for. 
example — may be produced in such quantity that 
the market cannot absorb the output at reasonable 
prices. When this happens whole regions face 
ruin. 

Such commodity problems may be dealt with 
through international agencies. Nations might 
work together to expand demand and help high- 
cost producers to transfer to other products. Such 
agreements would recognize the interests of both 
producers and consumers. 

TRANSPORTATION— KEY TO TRADE 

International trade and travel must move by 
land, sea, or air — in the future increasingly by air. 
According to international law, the air above any 
country belongs to that country. It could forbid 
foreign planes even to fly over its territory as well 
as to land or pick up passengers or goods. Each 
nation could obstruct the air transport of others if 
it chose to make such rules. 

This is another area for international discussion 
and agreement. A beginning was made on this 
problem in 1944 at the Conference on International 
Civil Aviation in Chicago. There were some 
differences of opinion, but proposals were made 
for the consideration of governments — proposals 
to make air transportation move more freely in the 
post-war world. 



APRIL 1. 1945 



565 



Some nations rely upon shipping as a major 
business for their livelihood. The war has created 
problems for them. In some cases, they have lost 
most of their merchant ships while other countries 
have increased their fleets. This unbalanced sit- 
uation may present another subject for agreements 
in the interest of world trade. 

OPPORTUNITIES WE FACE 

Expanding business opportunity, full employ- 
ment, and a high level of agricultural production 
are American goals. Industry and business, farm- 
ers and workers, in all countries, will soon face 
the problems of recon- 
version to peacetime pro- 
duction. Our common 
difficulties are our com- 
mon opportunities. We 
can let ourselves drift 
into economic warfare or 
plan our welfare with 
other nations in economic 



posed United Nations Organization the nations 
would have an economic general staff through 
which to plan the economic well-being of their 
peoples. 

The proposals for security from war or threats 
of war are also a part of the strategy of peaceful 
economic progress. Nations living in fear of each 
other, preparing for war, cannot fully use their 
resources to advance their economic welfare. But 
nations working together to promote world pros- 
perity help create the conditions for peace and 
security. 



peace. 

The proposals outlined 
here are a part of a 
program for economic 
peace. 

Additional contribu- 
tions to such a program 
can be made by such 
agencies as the Interna- 
tional Labor Organiza- 
tion and the proposed 
Food and Agriculture 
Organization of the 
United Nations. They 
can provide research 
and recommendations to 
help the peoples of all 
nations improve produc- 
tion methods and world- 
wide distribution. 

In the Economic and 
Social Council of the pro- 



Some International Agencies 

(In the economic field) 

International Monetary Fund — A conference held at Bretton Woods, New 
Hampshire, in 1944 proposed a permanent organization to facilitate international 
trade and promote high levels of employment and real income by helping 
member nations to maintain stable exchange values of currencies. 



International Banl(^ for Reconstruction and Development — The conference at 
Bretton Woods made recommendations for a permanent International Bank 
to assist in reconstruction of war-torn member nations, in development of new 
productive facilities generally, and to promote international trade by extending 
or underwriting loans. 

International Labor Organization — Set up in 1919 to study problems affecting 
the welfare of labor and recommend policies and programs to member nations. 
Representatives of organized labor, employers, and governments work together 
for improved working conditions, higher standards of living, and social progress. 

Food and Agriculture Organization of the United Nations — A conference at 
Hot Springs, Virginia, in 1943 made recommendations for a permanent organ- 
ization to study problems of production, distribution, and consumption of agri- 
cultural products and suggest policies and programs to member nations. An 
Interim Commission has prepared a constitution and submitted it to the various 
governments. 

Provisional International Civil Aviation Organization — Provided for at the 
aviation conference in Chicago in 1944 to foster and coordinate the development 
of international civil aviation. 

United Nations Relief and Rehabilitation Administration (UNRRA) — A tem- 
porary agency organized in 1943 to administer an emergency program with 
funds and supplies contributed chiefly by uninvaded member nations. At the 
invitation of military authorities or governments of invaded nations, it provides 
limited assistance to help people help themselves. 



566 

Outline No. 3' 



DEPARTMENT OF STATE BULLETIN 



Social Progress — How Can We Work For It? 



PROBLEMS WE FACE 

Proposals on international cooperation for so- 
cial progress are not as definite or complete as 
those for dealing with threats to the peace or with 
economic issues. Much is left for later considera- 
tion by the General Assembly of the United Na- 
tions Organization, the Ecoiiomic and Social 
Council, and the special international agencies 
now functioning or proposed. Some facts about 
social problems which will face us at the end of 
the war are only now coming to light. 

What Conditions Does War Create.' 

In the wake of war come threats of famine, epi- 
demics, and civil strife. 

The destructive power of this war and the 
scorched-earth policy have laid waste mil- 
lions of acres of farm land, smashed public 
utilities and transportation systems, de- 
stroyed millions of homes, schools, churches, 
stores, and public buildings. 

Farmers in many countries lack fertilizers, 
breed-stock, seed, and essential farm ma- 
chinery. Fishermen lack boats, nets, and 
other equipment. 

Millions of people— workers and farmers— in 
both Europe and the Far East have been 
taken from their homes to work for 
the enemy in far-off places. Displaced 
people — estimated at more than 35,000,000 — 
must be identified and returned to their 
communities. 

These millions and others left in towns and vil- 
lages bombed and burned to rubble will 
face unemployment and lack of clothing, 
shelter, fuel, and food. 

What Conditions Existed Before? 

Experts in social problems emphasize that the 
war has aggravated some bad conditions which 
existed long before the war. 



Two thirds of the people on earth have never 
had enough to eat — though two thirds of 
the people work at producing food. 

About 75 percent of the people of Asia and 30 
percent in advanced industrial countries 
lived on a diet below a minimum stand- 
ard of health. 

In some countries 200 out of every 1,000 babies 
born died during the first year. 

Approximately 50 percent of the adults of the 
world were unable to read and write. 

The majority of factory workers in the world, 
including women and children, endured 
sweatshop conditions at sub-standard wages. 

KINDS OF INTERNATIONAL ACTION 

"We will fail indeed", said former Secretary of 
State Hull in April 1944, "if we win a victory only 
to let the free peoples of this world, through any 
absence of action on cur part, sink into weakness 
and despair." 

He urged that "we take agreed action for the 
improvement of labor standards and standards of 
health and nutrition." 

What Has Been Done in the Past? 

Many international organizations for social, hu- 
manitarian, and educational advancement — both 
private and governmental — existed before the war. 
Professional organizations of doctors, teachers, so- 
cial workers, labor, and business exchanged ideas 
and circulated information through international 
associations. 

The United States Government maintained 
membership in many international agencies for 
social and economic advancement. {See selected 
list on page ^6g.) 

These agencies made contributions toward 
social progress along the following lines: 

' Printed separately as Department of State publication 
2302. 



APRIL 1, 1945 



567 



Organized exchange of information through 
reports, publications, and conferences to en- 
able each nation to benefit from the knowl- 
edge and experience of others. 

Example: Control of epidemics through syste- 
matic reporting of the International Office 
of Public Health on cases of plague, cholera, 
and yellow fever and other health infor- 
mation. 

Prepared model laws to raise standards and 
improve conditions and promoted their 
adoption by member nations. Also recom- 
mended methods of cooperation among 
nations. 

Example: Model laws on the 8-hour day and 
the 48-hour week, and on child labor formu- 
lated and urged by the International Labor 
Organization guided legislation in many 
countries. 

Helped member nations make agreements 
among themselves for social improvement, 
especially in cases where one country has 
difficulty in acting by itself. 

Example: Agreements on the control of produc- 
tion and traffic it? narcotics and dangerous 
drugs, involving coordination of criminal 
laws and cooperation among police authori- 
ties. 

Directed research and investigations on a re- 
gional or world-wide scale to provide a 
factual basis for cooperation among nations 
in solving social problems. 

Example : Research reports of the International 
Labor Office on social security and unem- 
ployment insurance, providing scientific 
foundations on which many tiations are 
building their programs. 

Made available technical experts to advise and 
assist member nations. 

Example: Public-health authorities from vari- 
ous United Nations assisting invaded na- 
tions through UNRRA to reestablish their 
facilities. 



What Is Proposed for the Future? 

The plans for the United Nations Organization 
proposed means for nations to work together for 
social progress. The General Assembly would 
have the responsibility for promoting cooperation 
in this field. 

An Economic and Social Council — under its 
authority — would make studies of the problems, 
spread information, make specific recommenda- 
tions to the General Assembly, and coordinate the 
work of various social, educational, and humani- 
tarian international agencies. 

The Assembly, the Economic and Social Coun- 
cil, and the specialized agencies are created by 
governments, not to legislate for them or give 
orders to them, but to help governments do to- 
gether what cannot be done as well separately. 

EMERGENCY RELIEF AND 
REHABILITATION 

Allied armies are responsible during the military 
period for preventing starvation, epidemics, and 
social chaos. They provide minimum relief and 
help organize the areas under their control. Short- 
age of shipping and damaged transportation sys- 
tems have made it difficult to meet the most press- 
ing civilian needs in addition to the demands for 
military supplies. 

UNRRA was organized by 44 nations in 1943 to 
follow in the wake of the armies and assist tJie 
military or the national governments at their re- 
quest. UNRRA was not set up to do the whole 
job but "to help people help themselves". 

Countries not directly invaded by the enemy 
provide supplies and assistance to peoples 
who have suffered occupation. 

Invaded nations pay for the supplies they need 
if they have foreign exchange. Those that 
cannot pay receive basic supplies and serv- 
ices from an international pool organized by 
VNRRA. 

Whether a nation is able to pay or not, it must 
clear its list of needs with UNRRA so that 



568 



DEPARTMENT OF STATE BULLETIN 



no country may take more than its fair share 
of a Umited world supply. 

UNRRA is a temporary organization which will 
be disbanded when its emergency job is done. 

It is furthermore proposed to set up a European 
Inland Transport Organization in which the 
United States would participate to reestablish 
essential transport facilities in devastated Europe. 

PROBLEM OF FOOD 

A Food and Agriculture Organization of the 
United Nations was recommended at the Hot 
Springs conference in June 1943. By March 1945, 
18 nations had indicated their intention to accept a 
constitution drafted for this organization by the 
Interim Commission. 

The Declaration of the Conference states both 
the problem and some proposals to meet it. 

"This Conference . . . declares its belief that the 
goal of freedom from want of food, suitable 
and adequate for the health and strength of 
all peoples, can be achieved. 

"The first cause of hunger and malnutrition is 
poverty. It is useless to produce more food 
unless men and nations provide the mar- 
kets to absorb it. There must be an ex- 
pansion of the whole world economy to 
provide the purchasing power sufficient to 
maintain an adequate diet for all. 

"The primary responsibility lies with each na- 
tion for seeing that its own people have 
the food needed for life and health; steps 
to this end are for national determination. 
But each nation can fully achieve its goal 
only if all work together." 

The proposed Organization would not operate 
national programs or dictate actions in the eco- 
nomic or social fields. It would serve member 
governments in various ways including the ways 

described in column i, page 567. 
LIVING AND WORKING STANDARDS 

The International Labor Organization, through 
the participation of representatives of workers, 



employers, and governments of some 50 nations, 
has developed during the past quarter century a 
pattern of cooperation to promote peace through 
social justice. 

The ILO studies working conditions and exist- 
ing legislation and frames suggested standards 
which member nations consider for possible 
enactment. 

In establishing the ILO the members recognized 
in the constitution that "the failure of any nation 
to adopt humane conditions of labor is an ob- 
stacle in the way of other nations which desire to 
improve conditions in their own countries". 

Examples of positive action are the five agree- 
ments prepared by ILO on conditions in 
maritime employment ratified by maritime 
nations, including the United States. 

A reasonable living wage, a maximum work- 
week, a weekly rest period, freedom of 
association for employees as well as em- 
ployers, an end to exploitation of child 
labor, equal pay for equal work, and an 
effective system of labor inspection are 
among the goals toward which ILO has 
helped the world make progress. 

EDUCATIONAL OPPORTUNITY 

The increase of knowledge and the free flow 
of information are essential to social progress. 

The devastation of educational and cultural 
facilities during the war was studied by the 
Allied Ministers of Education in London and 
plans were made for rehabilitation. A delegation 
from the United States met with the Conference 
of Allied Ministers of Education in 1944. 

A draft constitution for a United Nations 
organization in the educational and cultural 
field is now under consideration by the various 
governments. 

Such an international organization would have 
among its tasks to: 

Encourage the development of educational and 
cultural programs in support of interna- 
tional peace and security. 



APRIL 1,1945 



569 



Accelerate the free flow of ideas and information 
among the peoples of the world. 

Facilitate the exchange of information on edu- 
cational, scientific, and cultural develop- 
ments. 

Conduct and encourage research and studies on 
educational and cultural problems. 



Assist countries that request help in developing 
their educational and cultural programs. 

These attempts to seek social progress through 
international organization in the past and the 
proposals to build on such successful experience in 
the future are an integral part of the proposed 
structure for peace. 



Some International Agencies 
(Related to social progress) 



International Labor Organization 

United Nations Relief and Rehabilitation Administration 

Food and Agriculture Organization of the United Nations 



See Outline No. 2. 



International Office of Public Hfa/M— Established 1907. Purpose: to collect, 
and notify governments of, information on the existence of certain infectious 
diseases and the measures taken to check these diseases. Prepared two inter- 
national sanitary conventions, which are being temporarily handled by UNRRA. 

Pan Amen'can Sanitary Bureau — Established 1902. Coordinating agency for 
public health in the Western Hemisphere, especially with reference to quaran- 
tine measures; gives technical assistance to national health authorities. 

Anglo-American Caribbean Commission — Created 1942. Advises British and 
United States Governments on matters relating to labor, agriculture, housing, 
health, education, social welfare, and economics, in territories under their flags 
in the Caribbean area. 

International Penal and Penitentiary Commission — Organized 1872. Com- 
posed of specialists in penology; promotes studies of problems relating to crime, 
penal legislation, etc. 

Intergovernmental Committee on Refugees — Created 1938. Cooperating 
closely with UNRRA and private organizations, negotiates with governments 
over the care and transportation of persons who, as a result of war or perse- 
cution in Europe, have been forced to leave their own countries on account of 
race, religion, or political beliefs. 

International Bodies for Narcotics Control — Several bodies, established 1921- 
1931, with power to regulate the traffic in dangerous drugs. 

American International Institute for the Protection of Childhood — Established 
1927. Thirteen American republics, including the United States of America, are 
members. Purposes: to study and report on child- welfare questions and 
methods and organizations for dealing with them, and to advise public 
authorities and private institutions. 



570 

Outline No. 4' 



DEPARTMENT OF STATE BULLETIN 



Freedom — How Can We Achieve It? 



A Means to Peace 

The Nazis, the Fascists, and the MiUtarists of 
Japan put the fundamental Rights of Man in issue 
when they began tlieir war for the subjugation of 
humanity. Hitler and Mussolini, and the rest, 
openly and shamelessly challenged the right of 
men to learn, to communicate, and to worship — 
the right to equal justice, regardless of race, creed, 
or color — the right to government by die consent 
of the governed. The outcome of the war is proof 
again that human rights are more powerful than 
humanity's oppressors. 

But human rights are powerful not only in war 
but in peace also. They are means as well as ends. 
It is in the practice of these rights that the best hope 
for a secure and lasting peace must rest. The 
Dumbarton Oaks Proposals, which provide that 
the United Nations Organization shall "proinote 
respect for human rights and fundamental free- 
doms", recognize this fact. 

Archibald MacLeish 
Assistant Secretary of State 



THE ASSAULT ON FREEDOM 

In 1923 Mussolini said: "Fascism has already 
trampled over the rotten corpse of liberty, and if 
necessary it will again". The aggressors in this 
war have suppressed freedom in their own coun- 
tries and in countries they have occupied. 

They have burned books, censored expression, 
tortured people for their opinions, and estab- 
lished a monopoly over the channels of 
communication. 
They have persecuted men and women for their 
religious faith and prevented the exercise of 
religious liberty. 

^ Printed separately as Department of State publicatior 
2303. 



They have taken property without due process 
of law and violated the privacy of the home. 

They have deprived men and women of fair 
trial and imposed cruel punishments. 

They have made a farce of elections and deprived 
people of their political rights. 

They have spread propaganda against human 
rights throughout the world and attempted 
to stir up racial and religious prejudices. 

Former Secretary of State Hull has pointed out: 
"We have moved from a careless tolerance 
of evil institutions to the conviction that free 
governments and Nazi and Fascist govern- 
ments cannot exist together in this world be- 
cause the very nature of the latter requires 
them to be aggressors and the very nature 
of free governments too often lays them open 
to treacherous and well-laid plans of attack." 

THE DEFENSE OF FREEDOM 

Nations whose freedom and independence were 
threatened joined issue with the aggressors. They 
subscribed to certain principles which they stated 
in a number of basic documents. 

Atlantic Charter 

This statement of principles by the President of 
the United States and the Prime Minister of Great 
Britain was made a part of the United Nations 
Declaration. The third of eight points in the 
Charter reads as follows: 

"They respect the right of all people to choose 
the form of government under which they 
will live ; and they wish to see sovereign rights 
and self-government restored to those who 
have been forcibly deprived of them." 

Statement of the Crimean Conference 

At Yalta in the Crimea, President Roosevelt, 
Prime Minister Churchill, and Marshal Stalin 
made a statement which said in part: 



APRIL 1, 194§ 



SW 



". . . we reaffirm our faith in the prin- 
ciples of the Atlantic Charter, our pledge in 
the declaration by the United Nations, and our 
determination to build in cooperation with 
other peace-loving nations world order under 
law, dedicated to peace, security, freedom and 
general well-being of all mankind." 
Another section of this statement says: 

"The establishment of order in Europe and 
the rebuilding of national economic life must 
be achieved by processes which will enable the 
liberated peoples to destroy the last vestiges of 
Nazism and Fascism and to create democratic 
institutions of their own choice. This is a 
principle of the Atlantic Charter — the right of 
all peoples to choose the form of government 
under which they will live — the restoration of 
sovereign rights and self-government to those 
peoples who have been forcibly deprived of 
them by the aggressor nations." 

Resolution at Mexico City 

The inter-American conference at Mexico City 
(February and March 1945) adopted a resolution 
presented by the United States which urged the 
American Republics to do four things: 

1. Recognize the obligation of democratic gov- 

ernments to assure their people free and 
impartial access to information; 

2. Undertake at the end of the war the earliest 

possible abandonment of wartime censor- 
ship ; 

3. Take measures, separately and in coopera- 

tion with one another, to promote a free 
exchange of information among their peo- 
ple; and 

4. Make every effort, after accepting such a pro- 

gram for themselves, to obtain acceptance 
of the same principles throughout the world. 

RECORD OF PROGRESS 
In Support of Freedom 
Free nations of the world have cooperated over 



the years in various ways to advance the cause of 
freedom and the spread of knowledge. 

Facilities for the Free Flow of Information 

Certain technical provisions were recognized as 
essential to the communication of ideas between 
peoples and nations. As science introduced new 
methods of rapid communication, international 
agreements and organizations were needed to 
make the new facilities serve the world effectively. 
Three examples will show what has already been 
done through international action: 

1. Communication through the mails. Infi- 
nitely complicated problems involved in mailing 
letters, books, and periodicals all over the world 
have been worked out through the Universal 
Postal Union. Uniform rates of postage, methods 
of exchanging balances due on postage accounts of 
various nations, and postal regulations in all 
countries have been cleared through the Postal 
Union. The flow of expression across borders de- 
pends for practical international application on the 
work of this agency. 

2. Communication by radio, telephone, and 
telegraph. A network of agreements among na- 
tions was essential for the orderly utilization of 
these facilities. The Bureau of the International 
Telecommunication Union is the agency through 
which the nations work together on these prob- 
lems. At the Washington Conference of 1927 
over 2,000 recommendations on radio problems 
were made. The Bureau acts as a clearing-house 
for all information on the subject. 

3. Communication based on common terms. 
The exchange of information — especially scien- 
tific research — requires agreement on the mean- 
ing of the terms used. Such international agencies 
as the International Bureau of Weights and Meas- 
ures have helped people of various countries under- 
stand one another by agreements on measurements 
used in the sciences. The daily lives of the people 
of the world are directly affected by this type of 
international collaboration. 



572 



DEPARTMENT OF STATE BULLETIN 



Advancing Free Institutions 

Over the years the nations have cooperated to 
build up free institutions and make them work for 
human welfare. Three examples will show how 
the principles of freedom have been advanced: 

1. Representative government has been strength- 
ened and national parliaments or congresses 
brought in touch with international affairs by the 
Interparliamentary Union. 

The League of Nations used its means to promote 
and assist free institutions in member nations. 
Its activities in mandated territories, in the protec- 
tion of minorities, and in certain plebiscite areas 
are examples. 

2. Exchange of publications has been fostered 
ever since Alexandre Vattemare, a Frenchman, 
visited the United States in 1839 to get it started. 
Through the International Exchange of Publica- 
tions, millions of government documents, books, 
and other printed materials have been systemati- 
cally exchanged among the nations. This pro- 
gram has helped make the knowledge of each 
country available to others. 

During the war United Nations Information 
Offices were established to promote the freer flow 
of information that would help peoples understand 
one another. 

Some countries, including the United States, 
have set up Information Libraries in foreign centers 
to make available books, pamphlets, pictures, films, 
and records — both scholarly and popular — to in- 
crease an understanding of their cultures and their 
contributions to knowledge. 

3. Learning and the arts were encouraged 
through the International Organization for Intel- 
lectual Cooperation' working under the League of 
Nations. National committees were created in 
many countries to work for educational advance, 
exchange of students and professors, and die effec- 
tive use of freedom for cultural progress. 



FOR FUTURE CONSIDERATION 

The representatives at Dumbarton Oaks pro- 
posed that the United Nations Organization should 
"promote respect for human rights and funda- 
mental freedoms". The means for doing this in 
an organized way were left to the General Assem- 
bly and the Economic and Social Council to work 
out when the Organization is established. Exist- 
ing and proposed international agencies in this field 
would be related to the General Organization, and 
die Economic and Social Council would coordinate 
their activities. 

Advancement of Education 

The Conference of Allied Ministers of Education 
meeting in London last year proposed an inter- 
national education agency to advance the cause of 
education and culture. 

Such an educational organization would not be 
empowered to interfere with educational systems 
of the member nations. But through it each 
nation could benefit from the experience and prac- 
tices of others. 

The proposed organization could help nations 
achieve a greater freedom by accelerating the inter- 
change of knowledge and ideas essential to social 
and economic progress. 

It could also contribute to peace by helping edu- 
cational and cultural institutions to increase under- 
standing among nations and peoples. 

Dealing With Aggressive Tyrannies 

The Security Council of the proposed Interna- 
tional Organization would have the power to act 
if it considered that a violent threat to internal 
freedom was a threat to the peace of the world. 
"There is no doubt in my mind", Under Secre- 
tary of State Grew stated recendy, "that the Se- 
curity Council would act if we were faced again 
by the kind of situations that arose in Germany 
and in Italy under Hitler and Mussolini before the 
war. This time we would take action before a 
war can get started." 



APRIL 1, 1945 



573 



International Bill of Rights 

Leading citizens in several countries have urged 
that an International Bill of Rights be adopted by 
the United Nations. 

Recognizing that liberty cannot be unlimited — 
that the freedom of one ends where he uses it to 
interfere with the rights of another — these citizens 
suggest that certain human rights be accepted as 
basic to world order. 

Freedom of Religion 

The right to join with others in churches and 
institutions, and to worship as one believes. 



Some International Organisations 

(Related to problems of freedom) 

International Bureau of the Universal Postal Union — Established 1 874. Collects 
and publishes information, determines costs to be borne by each country in con- 
nection with international postal service, cooperates with international transporta- 
tion and communication organizations. 

Bureau of the International Telecommunication Union — Established 1934. 
Assists governments in information and advice about regulations and agree- 
ments on international communications — telephone, telegraph, and radio. 

International Bureau of Weights and Measures — Established 1876. Purpose: 
to conduct scientific investigations for comparison and verification of standards 
and scales of precision. 

International Council of Scientific Unions — Established 1919. To assist in 
coordinating and promoting scientific research. 

Bureau of the Interparliamentary Union — Established 1888. The central ofHce 
of the Interparliamentary Union consists of organized groups of members of 
legislatures. The purpose of the organization — "to unite in common action the 
members of all parliaments ... in order to secure the cooperation of their 
respective states in the firm establishment and the democratic development of 
the work of international peace and cooperation between nations by means of a 
universal organization of nations." 

Intellectual Cooperation Organization of the League of Nations — Originated in 
the second Assembly, 1921. Organized as one of the four technical organiza- 
tions of the League in 1926. The Institute of Intellectual Cooperation was set 
up in Paris to work for cultural advancement with learned professions and insti- 
tutions in the member countries. Forty-four national committees for intellectual 
cooperation were created. 

United Nations Information Offices — Established in 1942. Nineteen of the 
United Nations cooperate in an information program, preparing pamphlets, 
fwsters, films, studies, press materials, and radio programs. A clearing-house 
function is performed by Offices in the United States and Great Britain. 



Freedom of Speech 

The right of the individual to form and hold 
opinions, to assemble with others to listen, discuss, 
and speak, being responsible for what he says that 
may harm others. 

The right to read as well as the right to express; 
reasonable access to the media of expression such 
as print, radio, and films for all who have some- 
thing to say. 

Fair Trial 

The right to public hearings, to competent coun- 
sel, to call witnesses, and to protection against arbi- 
trary detention, cruel or 
unusual punishments, 
and loss of life or prop- 
erty widiout due process 
of law. Equal protection 
of the law, regardless of 
race, religion, sex, or 
beliefs. 

Under Secretary of 
State Grew has recendy 
commented on the sug- 
gested International Bill 
of Rights: 

"Perhaps the Assem- 
bly [of the United Na- 
tions Organization] 
would adopt a bill of 
basic human rights; or 
a treaty might be ne- 
gotiated, under which 
the signatory states 
agree to respect such 
rights as freedom of 
speech, of assembly, of 
the press, of religion. 
Certainly the American 
Government will 
always be in the fore- 
front of any interna- 
tional movement to 
widen the area of 
human liberty." 



574 



DEPARTMENT OF STATE BULLETIN 



The Work of the Cultural-Relations Attache 



By 

THAT A CULTUBAL ATTACHE really MORRILL 

works is a minor masterpiece of 
imderstatement ! Anyone who undertakes the de- 
velopment of understanding between a foreign 
country and our own or helps "people to speak to 
people", as Assistant Secretary MacLeish puts it, 
must deal with every phase of human and intel- 
lectual life. That makes for not only a full-time 
job but an ovei'time one as well. 

Primarily the work of the cultural attache is 
one of meeting, knowing, and cultivating the many 
groups in the country to which he is accredited 
that are not habitually in contact with the political, 
economic, military, or naval sections of the Em- 
bassy — groups that include university and other 
educational leaders, officials of the Ministi-y of 
Education, scientific societies, musical and artistic 
groups, writers, journalists, and sportsmen. No 
matter how small the country, this alone could 
occupy a lifetime! To these individuals and 
groups the attache must bring a lively personal in- 
terest and, wherever possible, more tangible aid 
in the form of information, books, and occasional 
fellowships. He must be an intellectual jack-of- 
all-trades capable of discussing intelligently all 
but the most technical problems on a wide variety 
of subjects. As far as possible, the attache must 
represent all groups and all classes of the Amer- 
ican people — one minute a walking delegate, the 
next a potential vice president of the National 
Association of Manufacturei-s, or an interpreter of 
the Chicago school of poetry, or a purveyor of pro- 
gressive methods in rural education. 

Does this seem like putting a pi'emium on super- 
ficial smatterings of knowledge? It isn't. The 
attache is not required to be an expert in any one 
field. He is a liaison man between various ex- 
perts in two countries, and his own pet interests 
must be subordinated to those of whatever group 
he is dealing with at the moment. He need not 
have a specialized knowledge of their problems, 
but he must have a real and sympathetic interest — 
and this interest cannot be successfully feigned. 

' Mr. Cody is Cultural-Relations Attach^ at the American 
Embassy at Asuncidn, Paraguay. 



CODY ' "T^^^ cultural attache must be a man who 
likes people — an extrovert. 

The inevitable result of his contacts is a moun- 
tain of invitations to attend meetings, concerts, 
lectures, theatricals, graduations, outings, spell- 
ing-bees, ceremonies, exhibitions, and contests, and 
in many instances he is expected to be an active 
participant in a group and its work. Then too, 
the Ambassador, long besieged by invitations of 
an unoflicial nature, is likely to pass them on to 
the cultural attache as someone appointed by a 
kind fate to relieve liim of these added demands. 
It might make for a more peaceful, and even cul- 
tural, life for the attache himself if all these func- 
tions took place within an approximate working 
day, but most of them don't. The "day", so called, 
often stretches into 16 or 17 hours. My own record 
was reached last year when I attended 14 meet- 
ings in one week and persuaded other members 
of the staff to appear at another 7. 

To these activities must be added all the office 
details, including the handling of 20 to 30 differ- 
ent fellowships and internee programs, each with 
a different application form, distinct qualifica- 
tions, and separate methods of handling. Appli- 
cants for training in philosophy, medicine, mete- 
orology. Boy Scout leadership, or 20 other subjects 
must be interviewed and judged as to moral and 
mental fitness for fellowship award. All appli- 
cants must be tested in English, and for the win- 
ners the attache or one of his assistants must 
arrange passage and visas and must advise on 
problems of clothing, money, and even private 
affairs. Why all this? Because the full benefit 
from such a program comes only when every detail 
is carried out easily and efiiciently. 

The book-distributicm program, which involves 
the visiting of libraries and determination of what 
volumes are most needed, likewise requires much 
detailed labor and time. To this is added the work 
of procuring books for the Library of Congress 
and other public institutions in the United States. 

Liaison with the local coordination committees, 
promotion and supervision of the cultural insti- 
tutes (there are five in Paraguay in as many cities) , 



APRIL 1, 1945 



575 



answering innumerable requests for information 
about the United States, and keeping abreast of 
the life and thought of the world are only a few 
other items to keep the cultural attache from find- 
ing time on his hands. Any remaining idle mo- 
ments can readily be consumed in the preparation 
and presentation of lectures about the United 
States or the writing of articles for ever-greedy 
magazines and newspapers. 



Along with all these duties, it is highly im- 
portant that the attache inform the Department, 
through comprehensive reports, of significant 
trends of thought in the country to which he is 
accredited, and of the cultural activities of other 
countries represented there. He must portray — 
if he can — the primitive sub-surface emotions that 
make one people and one nation different from 
another. 



Adherence by Syria and Lebanon to the 
Declaration by United Nations 



[Released to the press March 28] 

The Acting Secretary of State has received the 
following communication from His Excellency 
Khalid el-Azm, Acting Minister for Foreign Af- 
fairs of Syria : 

"Damascus, March 1, 194S. 

"I have the honour to inform Your Excellency 
that Syria declared a state of war with Gei-many 
and Japan on 26 February 1945, as a further mani- 
festation of its solidarity and cooperation with 
the United Nations. The Government of Syria has 
decided to adhere to the Declaration by the United 
Nations dated 1 January 1942 and, by means of 
this communication, adheres to that Declaration. 

"Please accept [etc.] "Khalid el-Azm" 

The Acting Secretary of State has sent the fol- 
lowing reply : 

"March 28, 1945. 

"I have received your communication of March 
1, 1945, stating thift Syria declared a state of war 
with Germany and Japan on February 26, 1945, 
as a further manifestation of its solidarity and 
cooperation with the United Nations ; that the Gov- 
ernment of Syria has decided to adhere to the 
Declaration by United Nations and, by means of 
that communication, adheres to the Declaration. 

"The Government of the United States, as de- 
pository for the Declaration, is gratified to wel- 
come Syria formally into the ranks of the United 
Nations. 

"Please accept [etc.] "Joseph C Grew" 



[Released to the press March 28] 

The Acting Secretary of State has received the 
following communication from His Excellency, 
Wadih Naim, Acting Minister for Foreign Affairs 
of Lebanon : 

"Beirut, March 1, 1945. 

"I have the honour to inform Your Excellency 
that Lebanon declared a state of war with Ger- 
many and Japan on 27 February 1945, as a further 
manifestation of its solidarity and cooperation 
with the United Nations. The Government of 
Lebanon has decided to adhere to the Declaration 
by the United Nations dated 1 January 1942 and, 
by means of this communication, adheres to that 
Declaration. 

"Please accept [etc.] "Wadih Naim" 

The Acting Secretary of State has sent the fol- 
lowing reply: 

"March 28, 1945. 

"I have received your communication of March 
1, 1945 stating that Lebanon declared a state of 
war with Germany and Japan on February 27, 
1945, as a further manifestation of its solidarity 
and cooperation with the United Nations; that 
the Government of Lebanon has decided to adhere 
to the Declaration by United Nations and, by 
means of that communication, adheres to the Dec- 
laration. 

"The Government of the United States, as de- 
pository for the Declaration, is gratified to wel- 
come Lebanon formally into the ranks of the 
United Nations. 

"Please accept [etc.] "Joseph C. Grew" 



576 



DEPARTMENT OF STATE BULLETIN 



United Nations Conference on International 

Organization 



INVITATIONS EXTENDED TO SYRIA AND 
LEBANON 

[Released to the press March 28] 

The Department made public on March 28 the 
texts of the Syrian and Lebanese communications 
of adherence to the Declaration by United Nations 
and of the replies of the Acting Secretary of 
State. 

The four nations sponsoring the United Nations 
Conference on International Organization have 
all agreed that Syria and Lebanon should be in- 
vited to participate in that conference, and this 
Government is extending invitations to them on 
behalf of the sponsoring nations. The French 
Government has indicated its support of this ac- 
tion, having talcen the initiative in proposing that 
these two Governments be invited to San 
Francisco. 

ACCEPTANCE OF INVITATION TO THE 

CONFERENCE BY THIRTY-SEVEN 

GOVERNMENTS 

[Released to the press March 30] 

The following 37 governments have now for- 
mally accepted the invitation to send representa- 
tives to the United Nations Conference on Interna- 
tional Organization at San Francisco on April 25, 
extended by the Govei-nment of the United States 
on behalf of itself and of the Governments of the 
United Kingdom of Great Britain and Northern 
Ireland, the Union of Soviet Socialist Republics, 
and the Eepublic of China: Australia, Belgium, 
Bolivia, Brazil, Canada, Chile, Colombia, Costa 
Rica, Cuba, Czechoslovakia, Dominican Republic, 
Ecuador, Egypt, El Salvador, Ethiopia, Greece, 
Guatemala, Haiti, Honduras, India, Iran, Iraq, 
Liberia, Luxembourg, Mexico, Netherlands, New 
Zealand, Nicaragua, Norway, Panama, Paraguay, 
Philippines, Saudi Arabia, Turkey, Union of 
South Africa, Uruguay, and Venezuela. The Pro- 
visional Government of the Fi'ench Republic had 
previously agreed to participate in the conference. 



The remaining two governments, Peru and 
Yugoslavia, have not as yet formally accepted the 
invitation, but the Department has noted that they 
have either appointed a delegation to attend the 
conference or are in the process of doing so. 

British Delegation 

Prime Minister Churchill has announced that 
the British Delegation would be led by the Secre- 
tary of State for Foreign Affairs, the Right Hon- 
orable R. Antliony Eden, and the Lord President 
of the Council the Right Honorable Clement R. 
Attlee, and that, besides these two leaders, the 
principal delegates would be the Right Honorable 
Viscount Cranborne, Secretary of State for Do- 
minion Affairs and Leader of the House of Lords, 
and the Right Honorable the Earl of Halifax, 
Ambassador in Washington; the junior delegates 
named are the following Parliamentary secre- 
taries of various ministries: George Tomlinson, 
Labor; Miss Ellen Wilkinson, Home Security; 
Miss Florence Horsbrugh, Health; William Ma- 
bane, Food; and Dingle Foot, Economic Warfare. 

Australian Delegation 

Prime Minister Curtin of Australia has an- 
nounced that the Australian Delegation will in- 
clude the Deputy Prime Minister the Right 
Honorable Francis Michael Forde and the Right 
Honorable Herbert Vere Evatt, K.C., Minister for 
External Affairs, who will be accompanied by Sir 
Frederic Eggleston, Australian Minister, Wash- 
ington; Lt. Gen. Sir John Lavarack, K.B.E., C.B., 
C.M.G., D.S.O., Head of Australian Military Mis- 
sion, Washington ; Air Marshal Richard Williams, 
C.B., C.B.E., D.S 0., Head of Australian Air Mis- 
sion, Washington; Comdr. S. H. K. Spurgeon, 
D.S.O., Naval Attache, Australian Legation, 
Washington ; and Mr. P. E. Coleman, O.B.E., As- 
sistant Secretarj-. Department of Defense, and by 
Senator George McLeay (Liberal Party) ; Senator 
R. H. Nash (Labour Party) ; the Honorable J. 
McEwen (Country Party) ; the Honorable R. J. 
Pollard (Labour Party) ; Mr. H. A. M. Campbell 
(editor of The Age, newspaper) ; Mr. J. F. Walsh 
(federal president of the Australian Labour 



APRIL 1, 1945 

Party) ; Mr. C. D. A. Odberg (president, the Aus- 
tralian Council of Employers' Federation) ; Dr. 
Koland Wilson (Secretary, Department of Labour 
and National Services) ; Mr. W. McMahon Ball 
(head of Department of Political Science, Univer- 
sity of Melbourne) ; Mr. E. V. Payment (general 
secretary, Keturned Soldiers and Sailors Associa- 
tion) ; and Mrs. Jessie Street (leading member of 
Australian women's organizations), as assistants 
to the Delegation. 

Egyptian Delegation 

It has been announced in Cairo that the Prime 
Minister Mahmoud Fahmy El-Nokrashy Pasha 
will head the Egyptian Delegation and will be ac- 
companied by the Minister for Foreign Affairs, 
Abdel Hamid Badawi Pasha, and by Mohamed 
Hussein Heikal Pasha, President of the Senate; 
Ismail Sedlfy Pasha, ex-Prime Minister; Abdel 
Fattah Yehia Pasha, ex-Prime Minister; Makram 
Ebeid Pasha, Minister of Finance; Hafez Ram- 
adan Pasha, Minister of Justice; Wassef Boutros 
Ghali Pasha, ex-Minister of Foreign Affairs; Aly 
El-Chamsy Pasha, Director of National Bank; 
and Hafez Afifi Pasha, Director of Bank Misr. 

South African Delegates 

Field Marshal the Right Honorable Jan Chris- 
tian Smuts has announced that he will attend the 
conference as the principal South African repre- 
sentative, and that the Union Minister in Wash- 
ington, Dr. S. F. N. Gie, will be codelegate. 

New Zealand Delegates 

It has been announced in Wellington that the 
New Zealand Delegation will be led by the Prime 
Minister Peter Eraser and will include the New 
Zealand Minister in Washington, Carl Berendsen. 

Other Delegations 

The Department has also been officially in- 
formed that the Czechoslovak Delegation will be 
headed by the Foreign Minister, Dr. Jan Masaryk ; 
that the Foreign Minister, John Sophianopoulos, 
will head the Greek Delegation ; that the Indian 
Delegation will be composed of Sir Ramaswami 
Mudaliar, Sir Firoz Iftan Noon, Sir V. T. Krish- 
namachari, Mr. K. P. S. Menon (secretary), Cap- 
tain T. E. Brownsdon (deputy-secretary), and 
Mr. John Bartley (legal adviser) ; and that Amir 
Faisal, Viceroy of the Hejaz and Foreign ]\Iin- 
ister, will head the Saudi Arabian Delegation. 



577 

Disappearance of American 
Citizens Deported by Germans 
From Occupied Areas 

[Released to the press March 26] 

Through various reliable channels the Depart- 
ment of State has learned of the disappearance of 
certain American citizens who were deported by 
the Germans from occupied areas. The list of 
names of those citizens, including the places from 
which they were deported and the dates of depor- 
tation, was made public by the Department on 
March 26. 

The Department is making every effort through 
the Swiss Government, in charge of American in- 
terests in Germany, and, where appropriate, 
through other channels to ascertain the where- 
abouts of those persons or to determine their fate. 
Their American relatives to the extent that they 
are known to the Department are being promptly 
informed of any facts which are developed in 
these investigations. 

Fourth Anniversary of 
Constitution of New 
Government of Yugoslavia 

[Released to the press March 27] 

The President sent the following message to 
King Peter, of Yugoslavia, on March 27 : 

This day marks another anniversary of that 
great event in Yugoslav history, when in the face 
of overwhelming odds your brave countrymen 
defied the Axis forces and thus asserted their right 
to live as a free and independent nation.^ 

On this memorable occasion the American peo- 
ple look forward to the day of victory when the 
valiant people of Yugoslavia will regain complete 
possession of their country. Then may they work 
together as one willing people in the task of 
rebuilding their shattered homeland. 

Franklin D. Roosevelt 
His Majesty King Peter II, 

King of Yvgoslavia, 
London. 



■ Bulletin of Mar. 29. 1941, p. 349. 



578 



DEPARTMENT OF STATE BULLETIN 



Bretton Woods 



[Released to the pregs March 28) 

The course of the ■war is moving inexorably into 
Germany and Japan. Our cost is great in blood 
of our dearest and best, and in treasure of our 
resources, past and future. But until one of our 
own is lost, it is difficult for us personally to realize 
and comprehend the devastation and destruction 
■which has struck the world. We see shocking 
pictures of Germany, but the pictures of Saint-L6, 
of Caen, of Stalingrad or Kiev, even of London, 
have faded considerably to our hardened percep- 
tion. Then we read that most of the productive 
capacity of France and Belgium was saved from 
destruction except for railroads and bridges, and 
we settle back to our own troubles. 

What few of us can conceive, and fewer still keep 
in our minds for more than a moment, is the loss 
of many leaders and the complete disruption of 
the peacetime economic system for existence in 
every country of Europe and China and south- 
east Asia and the southwest Pacific. Did you read 
of the first 1,200 Frenchmen, freed from prison 
camps, who arrived in Paris? They were dazed 
like men returned from amnesia and a horrible 
dream. Where is the honest and friendly spirit 
of international collaboration to come from? Or 
the tough competence and sound government poli- 
cies for the internal administration of these coun- 
tries? We who build our spiritual foundations 
on the Bible believe in the strength and capacity 
of human beings, but we shall need all of those 
foundations of faith in the years ahead. Most of 
these countries have to build from the ground up, 
and their tools and skilled workmen and materials 
are few and hard to find in every field of activit3\ 

The place to begin on the economic reconstruc- 
tion has to be with the financial measures that 
permit exchange and supply of goods between 
nations. We have adequate wartime financial ar- 
rangements. We are supplying our Allies with 
necessary goods under lend-lease. Other arrange- 
ments are also being employed such as those 
whereby countries, especially those in the Middle 

' Deliveref] before the 'World Affairs Council at Taeoma, 
Wash., on Mar. 2S. 1045. Mr. Taft is Special Assistant to 
the Assistant Secretary for Economic Affairs. 



Address by CHARLES P. TAFT » 

East, sell goods to Great Britain but leave the 

pounds .sterling in London until after the war. 

But lend-lease stops with the war, and at the 
same time pressure probably will be put on the 
British by some nations to settle their sterling 
balances. France and Belgium also will need 
much more in goods than the value of what they 
can expect. This will not be a new experience. 
After the last war, in the two years 1919 and 1920, 
Europe had to import 17.4 billion dollars of goods 
and only exported 5 billion dollars. The deficit 
this time could be far greater, as the needs are 
astronomical. 

The situation will certainly require the continu- 
ation of many wartime controls for several years. 
Certain things have to be imported to sustain life : , 
food into England, industrial raw materials into 
France. Scarce foreign currencies will be ra- 
tioned in order to be sure only necessities come in 
from these countries. Dollars are scarce in Europe 
and in British areas. That scarcity will certainly 
affect for some time our exports to Europe and 
the British Isles. Sterling is widely owned. It A 
is therefore easily available, and that will put " 
England in a tough spot as sterling demands are 
presented. 

All this is to be expected, but there are also 
financial devices of economic warfare which, like 
the military arts of war, the Nazis taught the 
world. Many people and governments believe 
that by monetary measures they can correct all the 
economic ills to which our complex civilization is 
subject. The taxing and spending power, the 
power to regulate the value of money and to in- 
fluence, if not determine, interest rates — all these 
are thought of as useful means to secure high 
levels of employment and full uses of resources. 
But in the kind of perpetual crises through which 
the war areas move, complete reliance cannot be 
placed upon these devices rather than employing 
tougher measures needed for real correction. 

We therefore face immediately the necessity of 
securing some means to finance restoration of trade 
and at the same time some measure of regulation 
for international exchange. We cannot wait to 
deal with the nations one at a time, 44 or more of 



APRIL 1, 1945 



579 



them. It is undoubtedly true that our relations 
with Great Britain are especially significant in 
the financial future, but a multilateral approach 
does not pi-event direct negotiations with Great 
Britain ; it makes that relationship more possible. 
We camiot wait to deal with them all singly. 

So the United Nations started in on the discus- 
sion of the monetary problem first, both because 
it was most necessary and most explosive. 

The purpose of the Bretton Woods conference 
was to adopt monetary measures which would 
assist in securing stability of exchange rates, with 
some method for orderly and undisturbing 
changes when needed, and which would assist in 
bringing about an equilibrium in the balance of 
payments of the various countries. For those 
purposes the International Monetary Fund was 
set up. The conference also studied and laid the 
groundwork for the movement of capital between 
countries for permanent investment. The Inter- 
national Bank for Reconstruction and Develop- 
ment was the result, with direct loaning authority 
and power to guarantee private loans.^ 

The Bank has had little opposition and that has 
led to insufficient discussion of the very important 
problem of foreign capital investment by the 
United States. I will only point out here that our 
policy is to encourage foreign industrialization 
and development by the export of our capital, 
equipment, and know-how. We reject the theories 
of George Ill's day which forbade manufacturing 
in the Colonies, and point to the increased pros- 
perity which England derived fi'om an indus- 
trialized United States even through a tariff wall. 

We are proposing to implement this policy in 
part at least by supporting the International 
Bank for Eeconstruction and Development. 

The Fund is a pretty technical operation for a 
layman like myself. I therefore give great weight 
to the fact that the overwhelming majority of our 
American monetary economists endorse it. But 
I can describe it, and some phases of its opera- 
tion are primarily matters of human nature in 
politics on which if not an expert, at least I have 
a right to say something. 

The Fund provides detailed machinery for fix- 
ing initial rates of exchange. Now that is a very 
political matter on which no doubt there will be 
vigorous dickering behind the scenes. But the 



'BtiLLETiN of Mar. 25, 1945, p. 469, and Mar. 11, 1&15, 
p. 409. 



rules are soundly conceived, and a nation joining 
the Fund must consult and subject itself to the 
pressures from all other nations concerned. That 
is worth having. The alternative is economic war. 

The Fund puts limitations on changes of rates. 
Again political realities will always be important 
where changes are proposed, but again there must 
be consultation, and limits are fixed. The criteria 
for judgment are well conceived out of experience 
and common sense. 

The monetary policies of each country are sub- 
jected to scrutiny and criticism as they affect 
others, with the emphasis on policies which inter- 
fere least and help the most with international 
trade. That means that there is a chance for the 
exercise of real leadership by the Fund toward 
expanded and non-discriminatory trade. 

The Fund provides for limited mutual assist- 
ance by financial aid for current purposes other 
than relief. I say "limited", for it is obvious that 
the Fund cannot do much to help such a problem 
as the British sterling balances, which are half 
again as much as the whole Fund. But such prob- 
lems are for direct handling by the country con- 
cerned. For most situations even in the transi- 
tion period the Fund can do the job. Moreover, 
all members would agree to abide by specified 
rules of the game. 

That is what the Fund amounts to, the rules of 
a game that used to be played without rules be- 
cause it was supposed to adjust by the automatic 
operation of economic laws. With the depression 
and the Nazis, nations refused to accept economic 
laws if the result meant unemployment, and the 
Fund is a start toward reestablishing the force 
of a sane international public opinion, even 
though the laws are still suspect. 

These rules of the game are a compromise, but 
the essential thing to remember is that the prompt 
return of economic health and expanded activity 
is all that can save us in the end. Bretton Woods 
is the necessary facilitator. The compromises 
show as scars on this structure, but the scars are 
on the surface. The heart of this proposal must 
be the effectiveness of the economic operations of 
the United States, Great Britain, Union of Soviet 
Socialist Republics, France, and the other great 
trading nations, and the faith, cooperation, and 
leadership with which they direct the Fund. 

Essentially this fight over the Fund is like the 
fight over Dumbarton Oaks. Among the oppo- 



580 



DEPARTMENT OF STATE BULLETIN 



nents are a combination of isolationists and per- 
fectionists. Many bankers opposing it are truly 
internationalist, but they are completely ignorant 
of how peoples and governments work in the poli- 
tical field. They insist on what may be intellec- 
tually desirable, but which cannot be achieved to- 
day. Any step should be taken upon which we can 
and have secured agreement, which is forward and 
does not endanger fiuther progress. The Fund is 
such a step, and by opposing it, just as in the case 
of Dumbarton Oaks, the perfectionists are playing 
into the hands of the real isolationists. 

If this attack succeeds, it threatens our whole 
basis of negotiation with every country in the field 
of international trade, and in fact undermines the 



success of Dumbarton Oaks. We shall succeed in 
setting up the world Organization at San Fran- 
cisco, but if we fail to participate in these financial 
plans we shall have destroyed hope of any prompt 
settlement of the monetary problem. That will 
delay any international trade arrangements in the 
field of commercial policy and cartels, and the 
forces of economic nationalism and warfare thus 
turned loose will be hard to stop. A security or- 
ganization with spiritual and economic founda- 
tions gone will not be worth much. 

What is called for is hard-headed business and 
political vision, exhibited in an immediate ap- 
proval of the entire Bretton Woods agreements. 



Peace and Economic Policy 



Address by CHARLES O'DONNELL ' 



[Released to the press March 28] 

The whole world looks to San Francisco with 
confidence that the peace-loving nations of the 
world in conference there next month will agree 
on proposals to maintain world order, security, 
and peace, and to advance the economic and cul- 
tural welfare of the peoples of the world. 

The progress we make toward these objectives 
will constitute the historic contribution of our 
times to a great new world. 

To turn our backs on these objectives, even to be 
indifferent to them, is to invite unrest, depression, 
revolution, and war. 

To accept them is to give men hope; to organize 
nations in accordance with them is to provide men 
with the means of translating hope into the solid 
substance of peace and well-being. 

You may have heard more about and given more 
thought to the security features of Dumbarton 
Oaks and Yalta than to the international economic 
and social proposals of Dumbarton Oaks, Bretton 
Woods, Hot Springs, and other conferences. 

I propose, thei-efore, to discuss tonight the eco- 
nomic aspects of international order as repre- 
sented by the foreign economic policies of this 

'Delivered before the Wilton Chapter of Americans 
United for World Organization at Wilton, Conn., on Mar. 
28, 1945. Mr. O'Donnell is an otficer in the Division of 
Commercial Policy, Office of International Trade Policy, 
Department of State. 



Government and as outlined in Dumbarton Oaks. 

Two preliminary observations are, I believe, in 
order. 

There should be the widest appreciation of the 
fact that the political or security aims and the 
economic and social purposes of Dumbarton Oaks 
are two sectors of the same front, on which the 
armies of peace must fight to achieve the kind of 
world that in the depths of our hearts we all really 
want. 

For the present and the inunediate future our 
whole foreign and domestic policy is to win the 
war. The heroic sacrifices of our armed forces 
and those of the other United Nations will give us 
the kind of a victory over our enemies which 
makes it possible for us to deliberate freely and 
hopefully on plans for an enduring peace. 

Let us first look at the organization for inter- 
national economic and social cooperation provided 
for in the Dumbarton Oaks Proposals. 

The General Assembly of the new international 
Organization, in which all member states are to 
be equally represented, will serve as a central 
agency for the study and recommendation of ac- 
tions required to create the social, economic, and 
cultural conditions in which political peace and 
unity can be achieved on an international scale. 

It will be the Assembly's busmess to guard 
and i)romote respect for human rights and funda- 
mental freedoms; it will have the power to recom- 



APRIL J, 1945 



581 



mend to the nations of the world measures for 
cooperative action to facilitate solutions of inter- 
national economic, social, and other humanitarian 
problems. 

The Dumbarton Oaks Proposals envisage an 
Economic and Social Council, under the authority 
of the General Assembly, to assist in the perform- 
ance of the functions delegated to the Assembly. 

The Economic and Social Council, consisting of 
representatives of IS countries, is to be elected for 
three-year terms by the Assembly. The special 
functions of the Council are to carry out the recom- 
mendations of the Assembly in matters pertaining 
to economic and social affairs, to make its own 
recommendations in these fields, and to assist the 
Security Council in the investigation of situations 
which may give rise to international conflict and 
in the application of economic sanctions to enforce 
the peace. 

Other important functions of the Economic and 
Social Council will be to coordinate existing spe- 
cialized international agencies, help to create new 
economic and social agencies as they may be 
needed, and promote cooperation in fields where 
no specialized agencies exist. 

In the inter-war years and before, a number of 
international organizations were dealing with 
economic matters. Although they gave the world 
valuable lessons in economic cooperation, more 
often than not they acted independently of one 
another and for this, among other reasons, proved 
incapable of preventing the economic conflicts 
which sharpened political differences and even- 
tually led to war. 

The Economic and Social Council as a small rep- 
resentative body meeting in a continuous session 
should be able to give unity and guidance, within 
the framework of policies laid down by the Gen- 
eral Assembly, to the work of the numerous spe- 
cialized economic and social agencies which have 
now been established or are in contemplation. 

The specialized agencies will have a wide diver- 
sity of powers suited to the problems with which 
they are to deal. Some of these agencies will be 
operating bodies; others will have only recom- 
mendatoiy or fact-finding authority. The Eco- 
nomic and Social Council will assist them in ar- 
ranging agreements among themselves and with 
the Council to obtain the most practicable form of 
cooperation. 

Dumbarton Oaks proposes to establish as ad- 
visory bodies to the Economic and Social Council 



a number of commissions which will undertake the 
systematic study and analysis of problems in major 
economic and social fields. 

The economic foreign policies of our Govern- 
ment, as presented in already organized or publicly 
proposed national organizations and in declara- 
tions and statements of the United States and of 
the United Nations, have to be put together and 
viewed as a whole in order that we may appreciate 
fully the boldness and confidence with which the 
United States and other countries are preparing to 
face the economic future of the world. 

To a very large extent the success of these poli- 
cies will depend upon the understanding and de- 
termination with which our citizens and those of 
other nations assist their governments in carrying 
them out. 

The plans of international cooperation for as- 
suring economic peace after this war, as opposed 
to the nationalistic policies which contributed so 
much to the making of the present war, were set 
forth in their classic form by President Roosevelt 
and Prime Minister Churchill in the Atlantic 
Charter. 

In that document it was declared to be the aim 
of the signers "to further the enjoyment by all 
States, great or small, victor or vanquished, of 
access, on equal terms, to the trade and to the raw 
materials of the world which are needed for their 
economic prosperity". 

The fifth point of the Charter expresses the de- 
sire "to bring about the fullest collaboration be- 
tween all nations in the economic field with the 
object of securing, for all, improved labor stand- 
ards, economic advancement and social security". 

In article VII of the mutual-aid agreement of 
February 1942 with the United Kingdom and in 
similar agreements with many other members of 
the United Nations, we jointly recognized our need 
to promote mutually advantageous economic rela- 
tions and the betterment of world-wide economic 
relations. To these ends the mutual-aid agree- 
ments call for the reduction of barriers to inter- 
national trade and elimination of trade restric- 
tions. 

The Inter- American Conference on Problems of 
War and Peace which finished its sessions at Mex- 
ico City just a few weeks ago agreed on an Eco- 
nomic Charter of the Americas which reafBrms 
the intention of the countries of this hemisphere 
to develop a positive economic progi-am to fulfil 
"The fundamental economic aspiration of the peo- 



582 



DEPARTMENT OF STATE BULLETIN 



pies of the Americas, in common with peoples 
everywhere ... to be able to exercise eflPectively 
their natural right to live decently, and work and 
exchange goods productively, in peace and witli 
security." 

Only two weeks ago it was announced that the 
President had met with the Prime Minister of 
Canada to discuss international questions of eco- 
nomic and trade policy which our countries will 
have to face at the end of hostilities. They agreed 
that the solution of these questions should be 
sought along bold and expansive lines with a view 
to removal of discriminations and the reduction 
of barriers to the exchange of goods among all 
countries. 

In all of these statements there is evident an 
underlying awareness of the acuteness of the dif- 
ficulties and dangers of the post-war situation. 
During the war governments have directly con- 
trolled their economies with purpose of winning 
the war and have thereby learned more about the 
uses of both economic cooperation and economic 
warfare. Some countries have had to dispose of 
their foreign investments and other sources of rev- 
enue from abroad and are going to find it diffi- 
cult, perhaps impossible, to make payments abroad 
for the things they need, unless other countries 
acting together are willing and able to assist them. 
It may appear to some people that the easy way 
out of these difficulties may be for each nation to 
try to solve its own problems in its own way. This 
would mean reduction of its imparts, the forcing 
abroad of its exports, and the shifting of its burden 
of potential unemployment onto the shoulders of 
other countries, some of whom may be less able to 
endure economic hardships. In order to prevent 
these things from happening, we should see that 
our best interests as well as those of the community 
of nations are to plan in concert to expand pros- 
perity in all countries. 

During the war we have proved to ourselves and 
to the world that we have an enormous productive 
power. It remains to be proved that we will use 
that power in time of peace to provide a good life 
for ourselves and others. 

Such productive capacity can be used to expand 
trade and to provide a high level of economic 
employment in this country and in other coun- 
tries, if we are willing to cooperate with other 
nations in stabilizing currencies and to invest in 
coimtries who need financial aid, if we are deter- 



mined to cooperate with these nations to reduce 
trade barriers and thereby increase trade, and if 
we will decide on concerted action to achieve full 
and productive employment. 

These are the means of attaining international 
and domestic economic well-being. These are 
ways of working together. They are the very 
contrary of the disastrous policy of going it 
alone — a policy which failed us and the rest of 
the world in the years before World War 11. 

Let us consider then each one of these measures 
in their turn : first, the financial and development 
program of the United Nations; secondly, the pro- 
gram for the reduction of trade barriers and the 
expansion of trade; and thirdly, plans for inter- 
nation cooperation to get more goods produced, 
more jobs, and a higher standard of living for all. 

Our own problems of reconvei'sion will be 
easier, and the economic rebuilding and develop- 
ment of the rest of the world will be made in- 
ci'easingly possible, if we use our capacity for pro- 
ducing capital goods to satisfy the needs of other 
countries. This means that opportunities for 
making foreign investments must be opened up, 
since markets for factories, machines, and the like 
depend to a large extent on long-term credit. 

Constructive measures to renew the flow of in- 
ternational investment disrupted by political in- 
security and by abuses in investment practices call 
for governmental loans and, more importantly, 
for government assistance to private investors. 

The removal of the ban imposed by the Johnson 
act on private lending to governments which are 
in default to this Government is desirable in order 
to permit private investment in urgently needed 
loans to the principal European governments and 
thus to assist American participation in the ex- 
pansion of international trade. - 

Since 1934 the Export-Import Bank of the f 
United States has helped to finance the export of 
agricultural products and industrial machinery 
and other capital goods by underwriting short- 
term loans and making long-term loans for con- 
struction and development projects. It is pro- 
posed and seems equally desirable to expand the 
funds of this Bank to supplement the Interna- 
tional Bank for Keconstruction and Development, 
especially for the purpose of financing trade. 

The International Bank for Reconstruction and 
Development, drawn up by the experts of 44 coun- 
tries at Bretton Woods and now under considera- 



APRIL 1, 1945 



583 



tion by the Congress, constitutes an important 
means by which American capital can be invested 
in various countries of the world to their benefit 
and our own. Such investments would contribute 
to raising their levels of living and would indi- 
rectly increase employment in this country by aug- 
menting the purchasing power of foreign countries 
for our goods. 

The International Bank will make or guarantee 
sound loans for the reconstruction of war-torn 
countries and the development of the resources of 
member countries in which industrialization has 
lagged. 

The Bretton Woods proposed agreements also 
provide for an International Monetary Fund, 
whose operations complement those of the Inter- 
national Bank. International investment on a 
long-term basis requires stable currencies and the 
assurance that the principal and interest from 
such investments can be converted into the lender's 
own currency as they fall due. Exporters are not 
disposed to export imless there is reasonable cer- 
tainty that they can be paid in a currency readily 
convertible into their own. 

The Fund is designed to provide rules of the 
game and machinery to stabilize foreign exchange. 
Without it national exchange controls may be the 
order of the day. 

Such exchange controls mean that a citizen of 
the country using them can spend money outside 
his country only with the permission of his govern- 
ment and, usually, only for things which his gov- 
ernment permits him to buy. They may even 
mean that a foreigner who sells goods to a citizen 
of the country maintaining the control must take 
his pay in goods which the government of the im- 
porting country specifies, and at pirices which 
that government sets. Trading, then, becomes a 
state activity rather than a private one. Such 
action by one country invites similar action by 
others. When a country deliberately plans to use 
exchange controls to take advantage of some other 
country, as Nazi Germany did, the result is not 
only injury to the other country but a direct con- 
tribution to armament and war. 

Currency and exchange problems must be dealt 
with by international collaboration because ex- 
change rates by their nature affect more than one 
country. The International Monetary Fund pro- 
vides that each country will under safeguarding 
conditions have access to the common reservoir 



of currencies and thereby genuinely contributes to 
the economic security of the member countries and 
of the international community. 

But more than financial measures are needed to 
achieve an expanding world economy and the re- 
sultant high level of productive employment. We 
also require a more direct means of restoring and 
enlarging the exchange of goods in international 
markets. We ought at this point to remind our- 
selves that, if the pre-war jungle of trade barriers 
is permitted to grow up again, not only would 
opportunities for the revival and expansion of 
trade be stifled but we could reasonably expect a 
repetition of pre-war unemployment. 

If we are to attain our goal of full economic 
employment, trade barriers established by govern- 
mental action must be reduced, and that wiU re- 
quire cooperation among governments. 

We must continue and extend our efforts through 
the trade-agreements program to encourage the 
expansion of trade and thereby contribute to the 
attainment of a high level of productive employ- 
ment. 

The objectives of a program for trade expan- 
sion are: (a) to eliminate discriminatory treat- 
ment in international trade; (b) to assist in elim- 
inating exchange restrictions; (c) to obtain the 
progressive removal of prohibitions and restric- 
tions on exports and imports ; (d) to reduce import 
tariffs; (e) to provide fair rules of trade between 
private traders and countries in which all or part 
of foreign trade is managed by the government. 

The Trade Agreements Act is now before Con- 
gress for renewal. It should get the support it 
has always had from the American people since 
its original enactment over 10 years ago. We have 
done about all we can under the i^resent act to 
reduce trade barriers. If we are to negotiate fur- 
ther cuts in tariffs here and in other countries and 
if we are to obtain increased support for non- 
discriminatory and expansive trade policies, the 
Trade Agi-eements Act will have to be broadened 
and strengthened. 

International restrictions on trade adopted by 
agreements, known as cartels, among private busi- 
ness enterprises have many of the same effects as 
do governmental trade restrictions of a discrimi- 
natory character. Cartels have restricted produc- 
tion and have fixed prices higher than they would 
otherwise be. In some instances they have limited 



584 



DEPARTMENT OF STATE BULLETIN 



research and access to new technological informa- 
tion. By their activities they have set up private 
governments, substituting their decision for that 
of governments and their electorates. 

President lioosevelt in a letter to the Secretary 
of State on September 6, 194-1 pointed out that 
"Cartel practices which restrict the free flow of 
goods in foreign commerce will have to be curbed. 
With international trade involved this end can be 
achieved only through collaborative action by the 
United Nations." ' 

As an integral part of the trade-expansion pro- 
gram of the United States consideration is cur- 
rently being given to a limited use of international 
commodity agreements intended to deal with spe- 
cial problems of burdensome commodity surpluses 
and to prevent the development of dangerous in- 
ternational rivalries which might arise from ill- 
advised national efforts to protect producers from 
extreme fluctuations in price and other malad- 
justments. 

In order that such international commodity 
agreements shall serve the purpose of an expand- 
ing world economy and provide an appropriate 
means of contributing to a program of full pro- 
ductive employment, certain fundamental prin- 
ciples should be embodied in the arrangements. 
These principles include satisfactory arrangements 
for shifting high-cost resources out of over-ex- 
tended industries into new and productive occu- 
pations; agreements should run for a definite pe- 
i"iod, subject to pei'iodic review by an international 
agency having adequate representation for con- 
suming as well as producing countries in its mem- 
bership. 

I am sure all of you have heard a great deal 
about full einployment, and I expect we will hear 
a good deal more. But you may very well ask 
yourselves what an expanding world trade has to 
contribute to full economic employment in this 
country. We know what it has to do with unem- 
ployment. Should our foreign trade drop to two 
or three billion dollars, as it did in 1032, we will be 
in the depths of a new depression. If we arc to 
avoid future repetitions of such a disaster, and if 
we are to have genuine economic security and pros- 
perity, we must have a sound and expanding for- 
eign-trade program. 

That trade program we outlined above. Seen 
as a whole it is composed of measures assuring ex- 



' Bulletin of Sept. 10, 1944, p. 2.54. 



change stability, international investments, the 
reduction of trade barriers whether public or pri- 
vate, and special international measures to handle 
persistent and difficult commodity problems. The 
end result of this program when put into opera- 
tion will be an expanded trade, which means that 
other countries will be able to pay what they owe 
us with what they sell to us, although for a time 
they will need the help of loans, particularly to 
rehabilitate devastated countries and to assist un- 
developed areas. 

The jobs of many people in this country nor- 
mally depend on what they can sell in foreign 
markets. Should our export industries be able to 
emploj' directly or indirectly from at least four 
to six million persons, as is estimated by some au- 
thorities, we have reason to hope in the future. 

We cannot overlook the fact that our expanding 
trade program will assist in the industrial develop- 
ment of many underdeveloped sectors of the world. 
Nor should we forget that industrialized nations 
such as Britain have generally been our best cus- 
tomers. 

Over a considerable length of time this country 
will have to import at least as much in goods and 
services a.s it exports unless we are prepared to give 
our products away. Trade is a mutual exchange 
of goods for goods. If we cut down on imports 
we curtail exports and along with them production 
and employment. As rapidly as the world can do 
it living standards in other countries should be 
brought nearer to the levels obtaining in this coun- 
try. We assist in that work by helping them to 
industrialize, by importing from them, and by co- 
operating with them in such organizations as the 
International Labor Organization, whose purpose 
is to encourage the improvements of labor stand- 
ards by as many governments as possible so that 
the people of these nations will be working on 
more nearly comparable terms, and as the Food 
and AgricultTire Organization of the United Na- 
tions, which aims at achieving freedom from want 
of food suitable and adequate for the health and 
strength of all peoples. 

In conclusion I should like to spend a few 
minutes with you looking at the underlying rea- 
sons why this Government and those of the other 
United Nations are proposing to do the things we 
have outlined above. 

In the first place I think it is because the world 
is profoundly aware that a certain level of eco- 
nomic well-being is necessary if man is to attain 



APRIL 1, 1945 



585 



a life of peace and order. Increasing economic 
opportunities and improving conditions of mate- 
rial well-being help to eliminate the occasion for 
resort to war. Nations with equitable access to 
the trade and raw materials of the world are less 
likely to launch upon destructive adventures than 
are nations living in economic enmity with other 
nations. 

Secondly, I think everyone is alive to the bond 
created among the nations of the world by the fact 
of their economic interdependence. 

Thirdly, we better appreciate in this country 
that our own prosperity is attributable to the very 
principles we seek to apply in an appropriate man- 
ner to an interdependent world, namely, free mar- 
kets, a common currency and banking laws, both 
public and private development programs, and 
opposition to private restraints of trade. 

Finally, the United States occupies a critical key 
position in the world today. Other countries are 
waiting to see what we will do about Dumbarton 
Oaks, Bretton Woods, the Trade Agreements Act, 
and other like measures. We caimot fail them 
or ourselves. The United States must not under- 
mine the economic foundations on which the arch 
of world peace and order rests. 

Change in Name of the Office 
Of the Coordinator of Inter- 
American Affairs ' 

By virtue of the authority vested in me by the 
Constitution and statutes as President of the 
United States, it is hereby ordered as follows: 

The name of the Office of the Coordinator of 
Inter-American Affairs, established within the 
Office for Emergency Management of the Execu- 
tive Office of the President by Executive Order No. 
8840 of July 30, 1941, is changed to the Office of 
Inter-American Affairs. There shall be at the 
head of the Office of Inter- American Affairs a 
Director who shall be appointed by the President 
and who shall hereafter discharge and perform, 
under the direction and supervision of the Pres- 
ident and in conformity with the foreign policy of 
the United States as defined by the Secretary of 
State through the Assistant Secretary of State in 



' Executive Order 9532 as printed in 10 Federal Register 
3173. 



charge of relations with the American republics, 
all of the duties, powers, responsibilities and func- 
tions now discharged and performed by the Coor- 
dinator. The Director shall receive a salary at the 
rate of $10,000 per annum and shall be entitled to 
actual and necessai*y transportation, subsistence, 
and other expenses incidental to the performance 
of his duties. All prior Executive orders incon- 
sistent with this order are amended accordingly. 
Wallace K. Harrison is hereby appointed Director 
of the Office of Inter-American Affairs. 

Franklin D Eoosevelt 

The White House, 

March 23, 19Jt5. 

Monetary Agreement 

United Kingdom - Siceden 

The American Embassy at London transmitted 
to the Secretary of State, with a despatch dated 
March 9, a copy of a monetary agreement between 
the Government of the United Kingdom of Great 
Britain and Northern Ireland and the Govern- 
ment of Sweden signed at London March 6, 1945. 
The agreement is published as British Command 
Paper 6604. 

This agreement came in force on January 1, 1945 
and is to continue in effect until January 1, 1950 
provided it is not terminated prior to that date 
by mutual consent. It is provided however that 
either party may at any time give notice of its 
intention to terminate the agreement and the 
agreement shall cease to have effect three months 
after the date of such notice. 

The agreement is designed to facilitate pay- 
ments and establish a stable exchange value for 
the two currencies. A rate of Swedish kronor 
16.90 =£1 is established and is to be varied only 
after mutual consultation. This rate is to serve 
as the basis for all currency transactions between 
the two countries and their territories. During 
the period of the agreement the Bank of England 
and the Sveriges Riksbank will supply such 
pounds and kronor as are required for payments 
between persons in Sweden and persons in the 
sterling area. Excluded however are the sterling 
balances already held on Swedish account. 

Article 5 looks toward the eventual establish- 
ment of multilateral payments by providing that 
pounds held by residents of Sweden or Swedish 
kronor held by residents of the sterling area are 



586 



DEPARTMENT OF STATE BULLETIN 



to be freely transferable between residents of the 
two currency areas. 

Article 6 provides for cooperation between the 
contracting Governments with a view to assisting 
each other in keeping capital transactions within 
the scope of their respective policies, and in par- 
ticular with a view to preventing transfers which 



do not serve direct and useful economic or com- 
mercial purposes. 

The agreement further provides that if either 
of the countries adheres to a general international 
monetary agreement the terms of the piesent 
agreement will be reviewed with a view to making 
any adjustments that may be necessary. 



Egyptian Foreign-Exchange Requirements for 1945 



The American Ambassador at London trans- 
mitted to the Secretai-y of State, with a note dated 
March 10, a copy of an agreement between the 
Governments of the United Kingdom and Egypt 
regarding arrangements concerning Egyptian 
foreign-exchange requirements for 1945. The 
agreement was effected by an exchange of notes 
signed at Cairo January 3 and 6, 1945. 

The text of the notes and an introduction printed 
in British Command Paper 6582 appears below : 

Correspondence between His Majesty's Govern- 
ment IN THE United Kingdom and the 
Egyptian Government concerning Egyp- 
tian Foreign Exchange Requirements for 
1945. 

Cairo, 3rd/6th January, 19^5. 
INTRODUCTION. 

During recent years imports into the Middle 
East have been limited by shortages of shipping 
and supply. This has necessitated detailed pro- 
gramming and control by the Middle East Supply 
Centre. Either because they remain in critically 
short supply or because they require considerable 
shipping space, certain goods will continue to be 
programmed by the M.E.S.C. in 1945 ; but a larger 
list of goods is being freed from such controls this 
year. 

Although some goods should thus be more easily 
available, there retaains at the present time a short- 
age of certain currencies, perhaps the most im- 
portant of these being United States Dollars, Ca- 
nadian Dollars, Swiss Francs, Swedish Ivronor, 
and Portuguese Escudos. It is therefore necessary 
for Egypt, in common with the rest of the Sterling 
Area, to continue to limit imports which have to 
be paid for in these currencies. This control of 



imports is exercised by the Governments of the 
territories concerned. 

Negotiations have accordingly been undertaken 
between His Majesty's Government and the Gov- 
ernment of Egypt, the aim being to secure the ob- 
jects set out in an aide-memoire handed to the 
Egyptian Minister of Finance on the 3rd Novem- 
ber, 1944 (reproduced as Document No. 1 below). ^ 
The negotiations proceeded between a group of 
British and Egyptian officials, and for conven- 
ience this group was formed into a Sub-Commit- 
tee to report on these problems. Their recom- 
mendations are incorporated in three reports as 
follows : — 

(1) A Eeport setting out the Egyptian require- 
ments of scarce currency in 1945 for normal 
imports and invisible payments (excluding 
such bulk supplies as wheat and fertilisers) 
(Document No. 3 below). ^ The total target 
figure, to which the Eg^T^tian GoveiTiment 
have agreed to adhere for these requirements, 
is the equivalent of £E. 10.000,000 in these cur- 
rencies. 

(2) A Report covering the measures which Egypt 
will take to strengthen her Exchange Control 
(Document No. 4 below).' 

(3) A Report covering the measures which Egypt 
will take to strengthen her import control 
(Document No. 5 below).' 

The recommendations in these Reports have been 
accepted by His Majesty's Government and by the 
Egyptian Government and the Reports form part 
of the agreement which has been concluded by an 
exchange of letters between the Egyptian Ministry 
of Finance and His Majesty's Embassy in Cairo 
(Documents Nos. 2 and 6 below). 



' Not printed. 



APRIL 1, 1945 



587 



The target figure agreed upon in the first of 
these Keports has been accepted as adequate to 
cover Egypt's real needs of scarce currencies. 
Wliilst maintaining a certain measui'e of austerity 
in imports, particularly from these scarce cur- 
rency sources, Egyjat should be able to acquire 
more goods than in recent years, during -which im- 
ports into the Middle East have been most drasti- 
cally curtailed. But in comparison with 1938 her 
imports from countries outside the sterling area 
will continue to be limited, since in that year she 
imported £E.25,000,000 worth of goods from coun- 
tries outside the area. This total includes imports 
from European countries which are not now open 
to trade. 

To the target of £E.10,000,000 for normal sup- 
plies should be added: (a) up to £E.3,000,000 in 
respect of wheat, an exceptional and (it is hoped) 
non-recuri'ent supply to compensate for a failure 
of the harvest; (b) possibly a further sum for fer- 
tilisers if shipping conditions should necessitate 
supply from North America instead of from Chile. 
(The £E.2,000,000 mentioned in the report (Docu- 
ment No. 3)^ is not likely to be reached.) 

Thus the two Governments have agreed on a 
figure for Egypt's reasonable recjuirements of 
scarce exchange for 1945. The British Govern- 
ment have agreed that this sum, namely the equiva- 
lent in these scarce currencies of £E. 10,000,000, 
should be provided against Egyptian pounds or 
sterling. The Egyptian Government for their 
part have agreed to strengthen their controls in 
order to be in a position to keep within this target. 

DOCUMENT NO. 2 

Text of Note Verbals from the Egyptian 
Ministry of Finance to His Majesty^s 
Embassy, Cairo. 

3rd Janttaet, 1945. 

The Egyptian Ministry of Finance presents its 
compliments to the British Embassy and begs to 
confirm arrangements which had been reached be- 
tween representatives of the Egyptian and British 
Governments on the subject of Egypt's imports and 
exchange control in 1945. 

It is hoped that these arrangements, which are 
set out in enclosed documents, will work to the 
mutual satisfaction of the two Governments dur- 
ing 1945. 



'Not printed. 



It is clearly understood that the duration of 
these arrangements is confined to the year 1945, 
without of course prejudicing Egyptian Govern- 
ment's freedom of action in future. Nor do these 
arrangements prejudice the right of tlie Egyptian 
Government to adhere to any such international 
convention as that of Bretton Woods. 

The Egyptian Ministry of Finance would add 
in conclusion that these arrangements, based as 
they are on common agreement, would provide 
clear evidence of Anglo-Egyptian collaboration 
and mutual confidence. 

Makram Ebeid, 
(Minister of Finance on behalf of the 
Egyptian Council of Ministers.) 

DOCUMENT NO. 6. 
7'ext of Note Verbale from His Majesty^s 
Embassy, Cairo, to the Egyptian Min- 
istry of Finance. 

Gin January, 1945. 
The British Embassy presents its compliments 
to the Royal Egyptian Ministry of Finance and 
acknowledges receipt of the Ministry's note verhale 
dated 3rd January, 1945, confirming arrangements 
wliich have been reached between representatives 
of the Egyptian and British Governments on the 
subject of Egypt's imports and exchange controls 
in 1945 and enclosing three documents setting out 
these arrangements, namely : — ^ 

(1) report of sub-committee set up to consider 
Egypt's requirements of hard currency in 
1945; 

(2) report of sub-committee set up to consider 
Egyptian exchange control ; 

(3) report of sub-committee set up to consider 
what changes were necessary in Egyptian 
licensing machinery on the cessation of the 
activities of the Middle East Supply Centre 
as regards certain goods. 

2. The Ministry will appreciate that, in making 
these arrangements, the Embassy is relying on the 
Egyptian Government, in Egypt's own interest 
and in the general interest of the sterling area, to 
make all the necessary arrangements for the effi- 
cient administration of import licensing and 
exchange control machinery. 

It gives the Embassy satisfaction that it has 
been found possible to arrive at these understand- 
ings on the basis of common agreement. 

KHiLEARN, Anibassador. 



588 



DEPARTMENT OF STATE BULLETIN 



^ T HE FOREIGN SERVICE ^ 

Consular Oflfices 

The American Consulate General at Manila was 
opened to the public on March 27. 

Erratum 

On February 8, 1945 the Senate confirmed the 
nomination of Ely E. Pabner as American Min- 
ister to Afghanistan instead of as American Am- 
bassador as erroneously announced in the BtruJE- 
TiN of February 11, 1945. 



^ THE DEPARTMENT ^ 



Appointment of Officers 

Adlai E. Stevenson as Special Assistant to the 
Secretary, effective February 27, 1945. 

George H. Butler as Chief of the Division of 
Kiver Plate Affairs, effective March 28, 1945. 

Frank A. March as Chief of the Division of Man- 
agement Planning, effective March 22, 1945. 



The Substance of Foreign Relations. By Pierre De L. 
Boal, Ofijce of American Republic Affairs, Department of 
State. Publication 2304. 20 pp. 10(t. 

The Place of Bretton Woods In Economic Collective 
Security. Address by Dean Aeheson, Assistant Secretary 
of State. Conference Series 67. Publication 2306. 
16 pp. 5<t. 

Food for the Family of Nations: The Purpose and 
Structure of the Proposed Food and Agriculture Organiza- 
tion of the United Nations. By Howard R Tolley, De- 
partment of Agriculture and Leroy D. Stineljower, 
Department of State. Publication 2296. 18 pp. 5(. 

What Is America's Foreign Policy atid Main Street and 
Dumbarton Oaks. Radio Broadcasts by the Department 
of State, February 24, 1945, and March 3, 1945. Publica- 
tion 2288. 36 pp. Free. 

World Trade and World Peace. A Radio Broadcast by 
the Department of State, March 10, 184.5. Publication 

2289. 20 pp. Free. 

What About the Liberated Areas? A Radio Broadcast 
by the Department of State, March 17, 1945. Publication 

2290. 20 pp. Free. 

The United Nations : Dumbarton Oaks Proposals for a 
General International Organization. Conference Series 
66. Publication 2297. 8 pp. Free. 

Foreign Affairs Outlines on "Building the Peace" : 
No. 1. War— How Can We Prevent It? Publication 
2300. 4 pp. Free. 

No. 2. Prosperity— How Can We Promote It? Pub- 
lication 2301. 4 pp. Free. 

No. 3. Social Progres.s — How Can We Work For It? 
Publication 2302. 4 pp. Free. 

No. 4. Freedom — How Can We Achieve It? Publica- 
tion 2.303. 4 pp. Free. 

Foreign Commerce Weekly 



PUBLICATIONS 



The Department of State 

Popular Relations and the Peace. Address by Archibald 
MacLeish, Assistant Secretary of State. Publication 
2271. 14 pp. 5^. 

Parcel Post : Agreement Between the United States of 
America and Palestine and Detailed Regulations — Agree- 
ment signed at Wjishington September 6, 1944 and at 
Jerusalem May 10, 1943; ratified by the President of the 
United States of America September 25, 1&44. Executive 
Agreement Series 439. Publication 2287. 22 pp. 10<J. 

Health and Sanitation Program: Agreement Between 
the United States of America and Peru — Effected by ex- 
change of uotes signed at Washington May 9 and 11, 1942. 
Executive Agreement Series 441. Publication 2281. 
5 pp. 5<(. 



The article listed below will be found in the March 31 
issue of the Department of Commerce publication entitled 
Foreign Commerce Weekly, copies of which may be ob- 
tained from the Superintendent of Documents, Govern- 
ment Printing Office, for 10 cents each : 

"Canada's Tobacco Output, Big Up Swing is Envisaged," 
by Clifford C. Taylor, agricultural attach^, American Eim- 
bassy, Ottawa. 




Proposed Amendment to the Constitution of the United 
States Relative to the Making of Treaties. H. Rept. 373, 
79th Cong., to accompany H. Con. Res. 36. 1 p. [Favora- 
ble report.] 

Hearings on Problems of Foreign Trade and Shipping. 
H.Rept. 400, 79th Cong., to accompany H.Res. 211. 1 p. 
[Favorable report.] 



APRIL 1, 1945 



589 



Trade Agreements : Message from the President of the 
United States urging extension of tlxe reciprocal trade 
agreements program. H.Doc. 124, 79th Cong. 4 pp. 

Food and Agriculture Organization of the United Na- 
tions : Message from the President of the United States 
transmitting the First Report to the Governments of the 
United Nations by the Interim Commission on Food and 
Agriculture. H.noe. 128, 79th Cong. 45 pp. 

Relative to Determination and Payment of Certain 
Claims Against the Government of Mexico. S.Rept. 113, 
79th Cong., to accompany H.J.Res. 115. 9 pp. [Favorable 
report.] 



First Deficiency Appropriation Bill, 1945. S.Rept. 114, 
79th Cong., to accompany H.R. 2374. 10 pp. [State De- 
partment, p. 8.] 

Development of British Civil Air Transport: General 
Policy for the Development of British Civil Air Transport 
and the Operation of Air Routes for the Carriage of Pas- 
sengers, Freight, and Mails. S.Doc. 29, 79th Cong. 12 pp. 

An Act for the relief of certain officers and employees 
of the Foreign Service of the United States who, while in 
the course of their respective duties, suffered losses of 
personal property by reason of war conditions. Approved 
March 23. 1945. H.R. 687. Private Law 13, 7eth Cong. 
Ip. 



590 DEPARTMENT OF STATE BULLETIN 







OntentS— Continued 



Tebatt Information Page 

Recommendation for Renewal of Trade Agreements Act. 

Message of the President to the Congress 531 

Renewal of Trade Agreements. Address by Charles P. 

Taft 534 

Interim Commission on Food and Agriculture. Message of 

the President to the Congress Transmitting First 

Report 536 

UNRRA Agreement for Relief Program in Italy 543 

Summary of the Principal Points of the Agreement Be- 
tween the Italian Government and UNRRA .... 543 
Adherence by Syria and Lebanon to the Declaration by 

United Nations 575 

Monetary Agreement. United Kingdom- Sweden .... 585 
Egyptian Foreign -Exchange Requirements for 1945 . . . 586 

The Department 

Appointment of Officers 588 

The Foreign Service 

Consular Offices 588 

Erratum 588 

Publications 588 

The Congress 588 



H. I. SOVKRHHENT PR1NTIN9 OFriCCi ItAf 



THE DEPARTMENT OF STATE 






H 



1 J 

'J 





VOL. XII, NO. 302 



APRIL 8, 1945 



In this issue 



THE ECONOMIC BASIS FOR LASTING PEACE 

UNITED NATIONS WILL WRITE CHARTER FOR WORLD ORGANIZATION 

Addresses by the Secretary of State 

UNITED STATES TELECOMMUNICATIONS FACILITIES 

Statement by Assistant Secretary Clayton 

"BUILDING THE PEACE" 
it's Your State Department 

ECONOMIC ASPECTS OF THE MEXICO CITY CONFERENCE 

By H. Gerald Smith 

For complete contents 
see inside cover 



VV^NT o^ 




U. S. SUPERIt^^"ENDEN^ OF DOCUMENls 



THE DEPARTMENT OF STATE 

BULLETIN 



Voi..Xn • No.302« SJSi^jffi • PoBLicATiow 2315 




April 8, 1945 



The Department of State BULLETIN, 
a xceekly publication compiled and 
edited in the Division of Research and 
Publication, Office of Public Affairs, 
provides the public and interested 
agencies of the Gorernment uith 
information on developments in the 
field of foreign relations and on the 
Kork of the Department of State and 
the Foreign Service. The BULLETIN 
includes press releases on foreign 
policy issued by the White House and 
the Department, and statements and 
addresses made by the President and 
by the Secretary of State and other 
officers of the Department, as uell as 
special articles on various phases of 
interruitional affairs and the functions 
of the Department. Information con- 
cerning treaties and international 
agreements touhich the United States 
is or may become a party and treaties 
of general international interest is 
included. 

Publications of the Department, 
cumulativelistsofuhich are published 
at the end of each quarter, as icell as 
legislative material in the field of inter- 
national relations, are listed currently. 

The BULLETIN, published ui»/i the 
approval of the Director of the Bureau 
of the Budget, is for sale by the Super- 
intendent of Documents, United States 
Government Printing Office, Wash- 
ington 25, D. C., to uhom all pur- 
chase orders, irith accompanying 
remittance, should be sent. The sub- 
scription price is $3.50 a year; a single 
copy is 10 cents. 



MAY 7 194^ 

Qontents 



American Republics p«s* 

Declaration of War by Argentina : 
Resolution by the Governing Board of the Pan American 

Union 611 

Message from The Argentine Ambassador to the Director 

General 611 

Economic Aspects of the Mexico City Conference. By H. 

Gerald Smith 624 

Operation and Disposal of Synthetic-Nitrogen Plants: Dis- 
cussions With the Government of Chile 644 

Study of Organization of the Merchant Marine by Pana- 
manian Official 656 

Europe 
Message of Tribute From President Roosevelt to President 

BeneS of Czecliosloyalvia 599 

Relinquishment by Spain of Representation of Japanese 
Interests in the United States : Exchange of Notes Be- 
tween the Department of State and the Spanish 

Embassy 649 

Cultural Cooperation 

Philosopher Accepts Visiting Professorship to BrazU 644 

Economic Affairs 
United States Telecommunications Facilities. Statement by 

Assistant Secretary Clayton 602 

The Proclaimed List 607 

Need for Collaborative Action To Continue Mobilization of 

Economic Resources 613 

Opposition to Airline Monopolies. Statement by Assistant 

Secretary Clayton 614 

Planning for World Monetary Stability : The International 

Economic Bacl;ground. Address by Edward S. Mason . . 616 
United States Policy Regarding Commodity Agreements. 

Address by Bernard F. Haley 638 

Payments From Accounts of United States Citizens .... 642 
The Trade-Agreements Program in a System of World 

Cooperation. Address by Bernard F. Haley 645 

Exportation of Powers of Attorney 657 

Generai. 
Tribute to Sol Bloom. Address by the Assistant Secretary 

of State 622 

Post-War Matters 
The Economic Basis for La.sting Peace. Address by the 

Secretary of State 593 

Dumbarton Oaks Proposals : 

Representation in the Assembly of the Proposed United 
Nations Organization. Statement by the Secretary of 

State 600 

Agenda for San Francisco. Address by Clyde Eagleton . 650 
United Nations Conference on International Organization : 
United Nations Will Write Charter for a World Organi- 
zation. Address by the Secretary of State 605 

Promptness in Planning World Organization 608 

Advisers to the American Delegation 608 

Acceptance of Invitation by John Foster Dulles to Serve 

as Adviser to the American Delegation 608 

Acceptance by Peru and Yugoslavia of Invitation to the 

Conference 608 

(Continued on back cover) 



The Economic Basis for Lasting Peace 



Address by the SECRETARY OF STATE' 



[Released to the press April 4] 

I welcome this opportunity to come to the Mid- 
dle West to talk over with you some of tlie prob- 
lems and objectives of United States foreign 
policy. 

My father was brought up in St. Louis and be- 
gan his business career in Chicago. I was born in 
Chicago and began my own career in business in 
the automobile industi'y. 

I feel that here I am among old friends and in 
familiar territory. Aiid I kjiow also what a tre- 
mendous contribution the Middle West is making 
in this war. From your homes — and from your 
factories and farms — has gone forth a vast out- 
pouring of men and weapons and food to help win 
victory on battle-fronts nearly halfway around the 
world from Chicago. 

We are fighting this war in order that all Amer- 
icans may gain the opportunity to live securely 
and in peace. I say opportwnity — for victory in 
itself, as we all know but sometimes forget, will 
not be enough. Victory is the essential condition 
of our success, but not the assurance of it. 

The foreign policy of the United States is di- 
rected toward providing that assurance — in com- 
bination with domestic policy. Our objective in 
all our relations with other nations is to prevent 
aggression abroad from again disturbing the peace 
of the United States and to develop those condi- 
tions of international life that will make it possible 
to maintain high levels of productive employment 
and farm income and steadily rising standards of 
living for all the American people. 

This is a tremendous undertaking. We face 
difficulties and dangere whose magnitude it is 
hardly possible to overestimate. Idealism and 
good intentions will not be sufficient. Our only 
chance of success is to face squarely the realities 
and to pursue a course of action firmly based upon 
these realities. Without bold, realistic, and effec- 
tive action it will not be possible to prevent this 
war from being followed by economic collapse and 
economic anarchy far more disastrous than the de- 



pression of 1929 ; nor will it be possible to prevent 
another war from bringing bitter sorrow and suf- 
fering to every American home. 

Of one reality I believe the great majority of the 
people of the United States are now wholly con- 
vinced, and I do not believe the people of the Mid- 
dle West are any different in this matter from 
people in other parts of the country. After two 
world wars and a terrible world-wide depression, 
all within the space of 25 years, we are convinced 
that political isolationism and economic national- 
ism are utterly unrealistic and can only lead on to 
complete disaster for our country and for the 
world. 

So our foreign policy is based upon the hard 
facts that if we are to prevent the disaster of an- 
other war for the United States we must find the 
means to act effectively with other nations to pre- 
vent aggression anywhere in the world; that we 
cannot have prosperity in the United States, if 
the rest of the world is sunk in depression and 
l^overty. 

In other words, since we live in a world where 
every nation has become virtually our next-door 
neighbor, we cannot achieve our objectives alone, 
but only in the close cooperation that neighbors in 
any American town are accustomed to practice in 
settling affairs that mutually concern them. 

Upon these facts the United States Govenmient 
has based its foreign-policy program to help 
achieve security and prosperity for the United 
States after the war is won. 

The United Nations Conference at San Fran- 
cisco later this month will mark a critical turning 
point in the history of the United States and of 
the world. For at San Francisco it is the purpose 
of the United Nations to write the Charter of a 
world Organization which will become strong 
enough to maintain peace for generations to come. 

I know that many of you would like to hear 

" Delivered before the Council on Foreign Relations at 
Chicago, 111., on Apr. 4, 1945, and broadcast over the net- 
work of the Mutual Broadcasting System. 

593 



594 



DEPARTMENT OF STATE BULLETIN 



from me tonight a discussion of temporary diffi- 
culties of a political nature that have recently 
arisen in connection with the San Francisco con- 
ference. I regret that I shall not be able to do so, 
because the United States Government is at this 
moment engaged in very active efforts to resolve 
these difficulties, and tliere is little that I can add 
tonight to the statement which I made yesterday 
in reference to some of them.- 

I do, however, want to say this much. I have 
full confidence that we shall be able to resolve 
these difficulties — and others of this nature that 
will inevitably arise as we approach the end of 
the war. 

We are going right ahead with our plans for 
the San Francisco conference, and we are resolved 
to make it the success that it must be. I ask you 
to remember: First, that the United Nations have 
repeatedly overcome other difficulties and dangers 
far more serious in the past three years; second, 
that the vital national interests of the United 
States and of each of our Allies are bound up in 
maintaining and cementing in the peace our war- 
time partnership; third, that the extent of our 
agreement is far wider and more fundamental 
than tlie extent of our differences. If we keep 
these facts constantly in mind, we shall be able to 
keep our sense of proportion. 

Tonight I want to speak to you about other issues 
that are of fundamental and long-range impor- 
tance to the future well-being of the United States 
and to the success of the world Organization. They 
are issues that call for the utmost that we as a 
people can give to their successful resolution. 

Most of the public discussion of the Dumbarton 
Oaks Proposals upon which the Charter of the 
world Organization will be based has centered 
upon the security aspects of the Organization — 
upon its power to prevent or to suppress aggres- 
sion through the Security Council. 

That is a vital part of the plan, but I wish to 
remind you that it is, in fact, only half of the task 
that the world Organization must accomplish if 
it is to be successful. At the conclusion of the 
Crimea Conference President Roosevelt, Marshal 
Stalin, and Prime Minister Churchill declared that 
the earliest possible establishment of the world 
Organization was — and I quote — "essential, both 



'The statement referred to is printed on page 600 of 
this issue of the Bulletin. 

' BuiiiTiN of Feb. 18, 1945, p. 214, Italics are the Sec- 
retary's, 



to prevent aggression and to remove the political, 
economic, and social causes of war through the , 
close and continuing collaboration of all peace- 
loving peoples".^ 

It is the second part of that statement to which 
I refer and about which I wish to speak to you 
particularly tonight — the removal of the political, 
economic, and social causes of war. That is the 
responsibility which will fall principally upon the 
Assembly and the Economic and Social Council of 
the Organization, rather than upon the Security 
Council. That is the task to which tlie energies 
of the United States and the other members of 
the world Organization must be principally di- 
rected now and in the years following the war. 

This is so, because no machinery for combined 
action to prevent or suppress aggression will work 
for any length of time in a world in which the 
causes of war — particularly the economic causes — 
are permitted to poison relations between coun- 
tries. 

Economic warfare, depressions, hunger, poverty, 
and despair — these are the conditions that under- 
mine democracy and block its development, that 
breed tyrants and aggressors, and that turn nations 
one against the other. These are conditions that 
we must fight to master if any international organ- 
ization is to succeed in preserving peace. 

That is another of the realities upon which our 
foreign policy is based. 

As I have said, we face a task of extreme diffi- 
culty. 

The battles of this war have left in their wake 
destruction of factories and homes and transport 
that is unparalleled in history. This damage has 
to be repaired. 

The demands of war production have distorted 
the economies and the economic relationships of 
all nations as never before and have made neces- 
sary restrictive government controls of all sorts on 
normal business and agriculture. The transition 
from war to peace economy will challenge our 
patience and ingenuity to the utmost. 

We and our fighting Allies alike have enor- 
mously increased our national debts, and our Allies 
have, in many cases, incurred heavy new inter- 
national debts as well. 

Add to all this the fact that when this war began 
we had an inheritance of years of economic war- 
fare among nations and that we have this earlier 
damage, as well as the damage caused by the war, 
to repair. This earlier economic warfare took 



APRIL 8, 1945 



§9S 



many forms — restrictive government monopolies 
and private cartels, artificial restrictions on ex- 
change, currency manipulation, high tariffs, 
quotas, and other artificial barriers to profitable 
foreign trade and investment. 

Finally, we have to face the fact that never be- 
fore in our history, even in the periods of our 
greatest prosperity, have we attained a volume of 
production, trade, and employment and a na- 
tional income that came even close to what we have 
achieved in response to the demands of this war. 

In order to acliieve high levels of employment 
after this war — and to make sure that tlie men wlio 
return from the battle-fronts will have secure jobs 
and good wages — it is estimated that we shall have 
to reach and maintain a national income in the 
neighborhood of 150 billion dollai"s, compared to 
the highest figure we ever reached before the war — 
less than 85 billions in 1929. This, we hope, will 
provide close to 60 million jobs, year in and year 
out, compared to the previous peacetime peak of 47 
millions in 1929. 

Our problem thus adds up to this : 

We know that we have the physical ability to 
reach the higher level of production that we must 
have, because we have done it in this war. We 
have added enormously to our productive capacity 
and unlike many of our Allies, our factories and 
farms have escaped entirely the destruction of war. 
But in peacetime we cannot reach this liigh level of 
production unless we can find markets abroad as 
well as at home for our investment and our goods 
and services. 

We know also that much of the world will 
emerge from this war in desperate need of supplies 
and equipment from us to get their own economies 
going again, but that they will often not have the 
money to pay for what they need until they have 
succeeded in restoring their own productive eco- 
nomic life. 

We know also that short-sighted economic na- 
tionalism, either on their part or on ours, would 
lirevent any real recovery and would therefore 
destroy the markets we need and lead to unem- 
ployment and depression in our own country. 

What we have to do is to match our need for full 
production with the world's need for our products 
in such a way as to reach and maintain over the 
3'ears a permanently higlier level of international 
trade — and to maintain it on a sound and profit- 
able basis. 



I have already stressed the difficulty of doing 
this. But I have seen too much of the achieve- 
ments of American industry — both its manage- 
ment and its workers — and I have too much faith 
in American enterprise and initiative to think that 
it is impossible. On the contrary, I believe we as 
a nation have before us the greatest opportunity 
in our history to achieve in this generation the 
substantial fulfilment of the purposes of the 
American way of life. 

Once in a while one of my business friends 
speaks to me of government planning a.s if it were 
either ridiculous or dangerous. I reply that when 
I was in business, planning was fundamental to 
successful management, and I don't suppose things 
have changed since. It seems to me that to assem- 
ble all the pertinent facts, analyze them, and then 
plan ahead on the basis of these facts is merely 
the most elementary common sense. If those of us 
who are in positions of responsibility did not plan 
ahead, we would be guilty of criminal negligence. 

The United States Government has a well- 
rounded and carefully prepared program to 
achieve the results we seek in our foreign economic 
relations. We have been working actively on this 
program right through the war, and developing it 
step by step in consultation with our Allies and 
with the Congress and people of the United States 
and preparing to put it into effect. The Atlantic 
Chai'ter; the United Nations Declaration; the 
meetings at Moscow and Tehran, at Dumbarton 
Oaks, and in the Crimea; the establishment of 
UNRRA ; the conferences on food and agriculture 
at Hot Springs, on the International Bank and 
the Monetary Fund at Bretton Woods, and on in- 
ternational aviation here in Chicago; and the 
inter-American conference at Mexico City — these 
have all been steps in the development of this 
program.* 

It is a program that is aimed at expansion, not 
restriction. It is rooted in the American tradi- 
tions of freedom and enterprise. 

You already know a good deal about this pro- 
gram, but you may not all have seen how each 
part was related to the other and to the whole, 
nor how closely linked this program is to steady 
jobs and better pay and higher farm income in 
this country and to the assurance that your sons 
and mine will not have to fight another and greater 
war 25 years from now. 

* Toward the Peace — Documents. Department of State 
publication 2298. 



596 



DEPARTMENT OF STATE BULLETIN 



We begin with UNRRA, which is an emer- 
gency and temporary agency created to assist in 
meeting the urgent needs of relief in liberated 
countries. It is already functioning. 

The UNRRA program is a modest one. Prob- 
ably four fifths of the relief job will be done by 
the liberated countries themselves. 

The purpose of UNRRA is to help the liberated 
peoples get enough food to eat, clothes to wear, 
and a roof over their heads — relief which will 
make it possible for them to start earning a living 
again. It. will not, however, meet the enormous 
problems of reconstruction — the rebuilding of de- 
stroyed or damaged factories and homes, the pro- 
vision of raw materials and industrial machinery, 
and the supplies required for the restoration of 
agricultural production. 

I should like at this point to state again what 
the President and other officials of the Govern- 
ment have often stated before. 

It has never been intended to use lend-lease for 
post-war reconstruction or for any other purposes 
except those concerned with fighting and winning 
the war. And these are the only purposes for 
■which lend-lease has been used. Lend-lease is 
solely a war measure. 

I make this statement because of the repeated 
distortions and misstatements that continue to be 
made on this subject. The core of our whole post- 
war foreign economic program is the expansion of 
private trade and the encouragement of private 
enterprise, with such assistance as is required from 
the Government to maintain high levels of pro- 
duction and employment. 

We are resolved that the terms of the lend-lease 
settlement shall not be such as to endanger this 
program by placing unnecessary and restrictive 
burdens upon our commerce with other countries. 
We do not want war debts to smother trade this 
time as they did after the last war, and to poison 
relations between countries. 

On the contrary, article VII of the lend-lease 
agreements with our principal Allies in this war 
provides that the terms of the settlement shall be 
such as to expand production, employment, the ex- 
change and consumption of goods, to eliminate all 
forms of discriminatory treatment in international 
commerce and to reduce tariffs and other trade 
barriers. 

To meet the urgent needs of reconstruction, many 
of the countries which have suffered from the war 



will be able to buy a part of what they need out 
of their current resources. But the dollars and 
the gold that they now have or can acquire through 
their exports in the immediate future will be 
wholly inadequate to the dimensions of the task. 

It is clearly evident that international credits in 
large volume and at reasonable rates of interest 
will be necessary to tide them over the next few 
years. It is also clearly evident that private in- 
vestment cannot do a job of this magnitude un- 
aided by the Government, especially in the un- 
settled conditions that will follow the war. 

To help meet this and related needs — the plan 
for an International Bank for Reconstruction and 
Development and an International Monetary 
Fund was agreed to by the United Nations Dele- 
gates at the Bretton Woods conference and is now 
before Congress for approval. 

The principal purpose of the Bank is to guar- 
antee loans made bj' private investors for sound 
foreign projects of reconstruction and develop- 
ment and thus to extend the scope of private inter- 
national investment. 

Without the Bank I do not believe it will be 
possible to bring about the economic recovery of 
some of our best potential customers abroad and 
the development of the resources of other coun- 
tries which can also buy products from us in large 
quantities if they have the money. China and 
many of the American republics are outstanding 
examples of countries in this latter category. 

This is an important point which is often over- 
looked or misunderstood. Sound industrial and 
agricultural development abroad does not take 
customers away from us. On the contrary, past 
experience has proved time and again that the 
countries which buy the most from us are those 
whose economies are the most highly developed. 
Great Britain, for example, was our best pre-war 
customer. Canada, with a population of less than 
12,000,000, bought more from us before the war 
than all of South America, with a population of 
almost 90,000,000. 

Economically undeveloped countries are not 
good customers because they do not have enough 
income to pay for purchases from us. Therefore 
the influence of the Bank in advancing industrial 
and agricultural development in such countries 
will be of direct advantage to our export trade. 
The more wealth they produce and the higher 



APRIL 8. 1945 



597 



their national income, the more they will wish to 
buy from us and be able to pay for. 

The essence of the jDlan for the International 
Monetary Fund, which your fellow townsman, Mr. 
Edward Brown, had a part in drafting, is an 
agreement on rules governing foreign exchange 
which will provide some assurance to international 
traders and investors of the value of the money 
they are dealing with and to exporters that they 
will get paid for their exports in their own money 
and not in some blocked foreign currency they 
cannot use. 

The proposed Fund will not provide loans for 
reconstruction. But the substantial stabilization 
of the world's currencies which it will make pos- 
sible when it goes into effect will be essential to 
sustaining a high volume of international invest- 
ment and trade. 

As a supplement to the International Bank and 
to private capital in the ti-emendous task of re- 
storing peacetime production and trade in a world 
exhausted and bled white by war, we plan also to 
ask Congress in the near future to expand the 
lending authority of the Export-Import Bank. 
This Government institution has a ten-year rec- 
ord of profitable operations.^ It operates princi- 
pally through private banks, manufacturers, and 
exporters. Its capital is already largely utilized. 
It will have to have substantially increased capital 
to help meet the urgent needs for economic recon- 
struction and for rebuilding trade. And obviously 
if lending by private investors or the Export-Im- 
port Bank, or by private investors with the guar- 
anty of the International Bank, is actually to take 
place. Congress must remove the restrictions of the 
Johnson act and similar legislation. 

Thus we have UNRRA and other emergency re- 
lief measures, which prepare the way for the tre- 
mendous tasks of reconstruction. 

We have the International Bank and other 
financial measures to make possible the financing 
of this economic reconstruction and of further eco- 
nomic development in the immediate post-war 
years. And we have the Monetary Fund provid- 
ing for stabilization of currencies on a basis of 
gold and for ending economic warfare in the form 
of currency manipulation and exchange restric- 
tions. 

These are the foundations for building up the 
extensive and profitable international trade which 
is essential to high levels of production and em- 
ployment in the United States. 



Last year our wartime exports were valued at 
more than 14 billion dollars. Our greatest pre- 
vious volume of peacetime exports was scarcely 
more than one third of that figure. I do not sug-- 
gest that it will be possible, or that it will be neces- 
sarily desirable, to export 14 billion dollars' worth 
of products a year in peacetime. But specialists 
in this field do estimate that it will be necessary to 
approach the figure of 10 billion dollars a year if 
we are to maintain our production and employ- 
ment at the levels we seek. 

Only the most vigorous measures to remove arti- 
ficial barriers to trade will make it possible for us 
to reach this goal after the war. We have, first 
of all, to remove wartime restrictions as rapidly 
as the paramount requirements of defeating Japan, 
as well as Germany, will permit. 

We have also to work toward a general lowering 
of the tariff barriers which prevailed before the 
war. 

I hear it often said that high tariffs protect the 
American living standard. If there are any 
tariffs that really do that, I favor maintaining 
them. I also believe in looking at the record in 
these matters. What does the record show? 

It shows that, actually, high tariffs today act 
as a depressing influence upon the living standard 
of the American people. The record shows that 
on the average the wages paid by the highly pro- 
tected industries are lower than the wages paid by 
those industries which have little tariff protection 
or none at all. Our most efficient industries pay 
the highest wages and need no tariff protection. 

The record also shows that consumers — and 
every American is a consumer — have to pay more 
for products manufactured by highly protected 
industries than they would if more of these prod- 
ucts were imported. This means they have that 
much less money to spend for other products they 
would like to buy. 

In thinking of tariffs, we have also to bear this 
in mind : Our exports are the imports of other 
countries just as our imports are their expoi-ts. If 
we impose unfair tariff barriers that prevent 
Americans from buying from other countries prod- 
ucts they would like to buy if they could, then 
we invite retaliation by these countries against 
our exports of products that we would like to sell 
to them. 



' Bulletin of Dec. 3, 1944, p. 663. 






598 

It -was this sort of competition in tariffs that 
strangled trade, restricted production, and stim- 
ulated economic warfare before the war. We can- 
not afford to let it happen again. 

We do not need to fear imports. On the con- 
trary we need imports of many commodities in 
order to live, because we do not produce them 
ourselves. We need more imports to replace some 
of our own raw-material resources that we have 
consumed in such tremendous quantities in fight- 
ing this war. More imports mean not only more 
goods for American consumers, but more jobs and 
income for Americans engaged in the processing 
and distribution of imports. Finally, without 
more imports other countries will not be able to 
pay us for the increased exports that we seek. 

For every reason of oUr own national interest 
it is my firm conviction that tariffs must be fur- 
ther lowered in the next few years, both by other 
countries and by ourselves. 

In the last five years before the war we sought 
through the reciprocal trade-agi-eements program 
initiated by my great predecessor, Cordell Hull, 
to repair some of the damage done to our econ- 
omy by the Hawley-Smoot tariff bill. We made 
considerable progress in spite of the economic 
warfare which Germany and Japan were then 
pursuing and the generally unfavorable condi- 
tions which prevailed. Eecognizing its efficacy. 
Congress has three times renewed the Trade 
Agreements Act since it was first passed. 

Now it is necessary to move further. The act 
is again before Congress for extension.'^ As it 
stands it authorizes reductions in our tariffs up 
to 50 percent of the excessively high rates in effect 
in 1934. A good part of this authorization has 
been used up in the negotiation of the 28 trade 
agi-eements now in effect. 

We need more bargaining power in persuading 
other countries to reduce their tariffs against our 
exports. We have therefore asked Congress to 
authorize an amendment which will apply the 50- 
percent limit to the tariff rates as they stood in 
1945 instead of the higher rates of 1934. This will 
give us a new quid pro quo in negotiating new 
agreements with other countries. 

In addition to restrictive tariffs, there are other 
obstacles to wider trade and an expanding econ- 
omy for the United States and the rest of the 
world. Preferences and quotas, for example, are 

' Bulletin of Apr. 1, 1945, p. 531. 



DEPARTMENT OF STATE BULLETIN 

artificial restrictions on trade between nations, and 
export subsidies encourage uneconomic produc- 
tion, upset the world market, and invite retalia- 
tion. In agreement with other countries we must 
seek the means by which we can substitute for 
these practices other measures better calculated to 
maintain a healthy and expanding international 
trade. 

We must also deal vigorously and effectively 
with international cartels. These restrictive and 
monopolistic agreements among private business 
interests fix prices, limit production, prevent the 
use of new inventions and productive techniques, 
arbitrarily divide markets, and have in general a 
dangerous and throttling effect upon international 
trade. The evil effects of international cartels can 
be prevented only by supplementing national by 
international action against them and by taking 
the other measures which I have outlined to insure 
that all nations will be able to live better without 
such practices than with them. 

Some of our most serious economic problems 
arise out of chronic world-wide surpluses of such 
commodities as wheat and cotton. You in Chi- 
cago remember what happened to wheat farmers 
in this country after the last war when the bottom 
dropped out of the market for wheat and tens of 
thousands of farmers lost their homes and their 
livelihood. We do not want to see a repetition of 
that. 

It is important that governments act together to 
deal with the problem of such surpluses primarily 
by cooperative measures to expand consumption, 
such as I have outlined tonight. In the excep- 
tional cases where commodity agreements are nec- 
essarj', they should be directed toward shifting 
excess productive resources into more profitable 
lines, and both consuming and producing coun- 
tries should be fully represented. Otherwise in- 
dividual governments will continue trying to deal 
with them by such deceiDtively easy routes as arti- 
ficially supported prices and competing export 
subsidies. As we have learned from bitter ex- 
perience, these can only lead to economic warfare 
and in the end make the problem worse instead of 
better for all concerned. 

These problems and others like them can be 
faced and handled in time only by calling a con- 
ference of the principal trading nations of the 
world. We shall do all in our power to have such a 
conference convened within the next year. This 
conference would also prepare the way for estab- 



APRIL 8, 1945 



599 



lishment of a permanent trade organization within 
the framework of the world Organization, to deal 
with these problems on a continuing basis. 

In the field of food and agriculture, we are 
further advanced. The President last week asked 
Congress to approve United States participation in 
tlie United Nations Food and Agriculture Organ- 
ization.' This Organization results from the con- 
ference at Hot Springs in 1943. Eighteen nations 
have already ratified the agreement for member- 
ship. We should do so too. 

The Food and Agriculture Organization will 
have powers of recommendation only, not of con- 
trol or command, but I believe with the Presi- 
dent that its work can do much to raise the stan- 
dards of nutrition of all peoples and to establish 
and maintain expanding prosperity for agricul- 
ture in our country and in all countries. 

The food organization, like the other post-war 
international agencies to which I have referred 
this evening, would all eventually come within the 
framework of the world Organization when it is 
established. 

I think you will agree that the program upon 
which we have begun is of great scope. It must be 
so if we are to deal successfully with problems and 
difficulties of equal magnitude. 

The close cooperation of the United Nations in a 
program for economic reconstruction and expan- 
sion such as I have outlined to you tonight is 
fundamental to the success of the world Organ- 
ization. Without it the world will be able neither 
to recover from the effects of this war nor to pi'event 
the next war. 

There are many pitfalls ahead of us. So closely 
is each part of the program interlocked with the 
other parts that if we fail to carry through on any 
important sector of this peace front, the whole 
program and our over-all objectives will be placed 
in gravest jeopardy. 

If we fail we are not likely to get another chance 
to fulfil the purposes for which we have fought — 
the assurance of a secure peace and a decent life 
for all Americans. 

The task will require the utmost of us as a people 
in clear thinking, in understanding of where our 
real interests lie, and in the ability to act cou- 
rageously and wisely — and in time. 

I return to the point at which I began. The 
preservation of peace requires something more 
than a desire for peace, no matter how strong that 

639429 — 15 2 



desire may be. It requires, in a world as compli- 
cated and as closely interknit as this modern world 
of ours, a great design. It requires, in other words, 
the same courage, the same boldness and realism 
in the field of international affairs which the citi- 
zens of this Republic, and of this great central 
valley, have so often demonstrated in the past. 

If we Americans are proud of one thing more 
than of any other, we are proud of the fact that 
our forefathers were willing to face tremendous 
and complicated problems and to bring to them 
new and daring solutions. And there are no 
Americans who take more pride in that tradition, 
than the Americans of these great central states. 

Believing in America as I do, I am confident that 
we will meet this greatest crisis of our modern 
history as we have met all the crises of our history 
before. I believe that we will act with under- 
standing of where our real interests lie — wisely 
and courageously and in time — and that we will 
force the difficult circumstances of our time to 
yield up to us the sure and enduring peace which 
we are determined to leave to those who will 
follow us in this country we love so well. 

Message of Tribute From 
President Roosevelt to 
President Benes of 
Czechoslovakia 

[Released to the press April 6] 

It is a source of great personal satisfaction to 
me to see your untiring efforts for the liberation 
of Czechoslovakia crowned by your return to its 
own soil. 

I know what joy your homecoming must mean 
both to you and to every other patriotic Czecho- 
slovak because it marks the restoration of your 
country to the dignity of independence and free- 
dom from foreign oppression. 

Your homecoming also symbolizes to all Ameri- 
cans the turning of the whole world from the 
years of conquest and strife to an era of justice 
and cooperation in a community of free nations 
dedicated to those same principles of democratic 
integrity which are so characteristic of Czechoslo- 
vakia itself. 



' BuLLETTiN of Apr. 1, 1945, p. 536. 



600 



DEPARTMENT OF STATE BULLETIN 



Representation in the Assembly of the Proposed 
United Nations Organization 



Statement by the SECRETARY OF STATE 



[Released to the press April 3] 

At a press conference on Friday, March 30, cor- 
respondents submitted to the Department of State 
for consideration a number of questions relating 
to representation in the General Assembly of the 
]n-oposed United Nations Organization, a matter 
that was discussed at the Crimea Conference. 

The inquiries submitted related to various 
aspects of several principal questions: Whether 
unpublished agreements had been made at Yalta; 
why the American representatives at Yalta agreed 
to support the Soviet proposals for initial mem- 
bership of two Soviet Kepublics in the proposed 
International Organization ; ^ whether it was 
agreed that the two Soviet Kepublics would have 
separate representatives at the San Francisco con- 
ference ; why the agreements with reference to the 
proposal for initial membei'ship of two Soviet 
Eei)ublics had not been announced; and whether 
the agreements on the subject of representa- 
tion in the General Assembly affected the prin- 
ciple of sovereign equality of peace-loving nations 
expressed in the Dumbarton Oaks Proposals. 

I wish to make the following statement in re- 
sponse to these questions : 

Both military and political questions were 
covered at the Crimea Conference. The military 
plans agreed to at Yalta and related matters con- 
nected with the defeat of the common enemy can 
be made known only as they are carried out. 

Among the other matters dealt with at the Cri- 
mea Conference were several open questions left 
over from the Dumbarton Oaks Conversations: 
The voting procedure in the Security Council; 
invitations to the United Nations Conference on 
International Organization; the time and place 
of the Conference; initial membership in the Inter- 
national Organization ; and the possible addition 
to the Dumbarton Oaks Proposals of provisions 
relating to territorial trusteeship. 

The decisions taken at Yalta with reference 
to the time and place of the United Nations Con- 

' Bulletin of Apr. 1, 1945, p. 530. 
' Bulletin of Mar. 11, 1945, p. 394. 



ference were made public in the communique is- 
sued at the close of the Crimea Conference. The 
voting procedure in the Security Council was not 
announced until after consultations on this sub- 
ject with the Government of the Republic of China 
and the Provisional Government of the French 
Republic. Following these consultations, the vot- 
ing jirocedure together with the text of the invi- 
tation and the list of nations to be invited to the 
San Francisco conference were made public on 
March 5, approximately a month after the close 
of the Crimea Conference.^ 

The only other decisions reached at Yalta and 
not made public in the Crimea Conference com- 
munique related to initial membership in the In- 
ternational Organization when it meets, and to 
territorial trusteeship. 

The Soviet representatives at Yalta proposed 
that the White Russian and the Ukrainian Repub- 
lics be initial members of the proposed Interna- 
tional Organization. This was a question for the 
United Nations assembled at San Francisco to con- 
sider and decide. 

In view of the importance which the Soviet Gov- 
ernment attached to this proposal, the American 
representatives at Yalta, having the utmost respect 
for the heroic part played by the people of these 
Republics in their unyielding resistance to the 
common enemy and the fortitude with which they 
have borne great suffering in the prosecution of 
the war, agreed that the Government of the United 
States would support such a Soviet proi)osal at 
San Francisco if made. No agreement was, how- 
ever, made at Yalta on the question of the partici- 
pation of these republics in the San Francisco 
conference. 

In the circumstances, the American representa- 
tives at Yalta believed that it was their duty to 
reserve the possibility of the United States having 
three votes in the General Assembly. The Soviet 
and British representatives stated their willing- 
ness to support a proposal, if the United States 
should make it, to accord three votes in the As- 



AfRlL 8, 194S 

sembly to the United States. The President has 
decided that at the San Francisco conference the 
United States will not request additional votes for 
the Government of the United States in the Gen- 
eral Assembly. 

Announcement of these proposals was made 
first to the United States Delegation to the San 
Francisco conference. In order to correct the im- 
pression conveyed by partial publication of the 
facts, public announcement was made prior to a 
final determination of the course to be followed 
by the Delegation with regard to possible addi- 
tional representation for the United States. 

As to territorial trusteeship, it appeared desir- 
able that the Governments represented at Yalta, 
in consultation with the Chinese Government and 
the French Provisional Government, should en- 
deavor to formulate proposals for submission to 
the San Francisco conference for a trusteeship 
structure as a part of the general Organization. 
This trusteeship structure, it was felt, should be 
designed to permit the placing under it of the ter- 
ritories mandated after the last war, and such ter- 
ritories taken from the enemy in this war as might 
be agreed upon at a later date, and also such other 
territories as might voluntarily be placed under 
trusteeship. No discussion was had at Yalta or 
is contemplated prior to, or at, San Francisco re- 
garding specific territox'ies. 

The basis of the San Francisco conference re- 
mains the Dumbarton Oaks Proposals. It is for 
the conference to decide -whether any proposal 
affecting voting in the General Assembly of the 
proposed United Nations Organization impairs the 
principle of sovereign equality, just as the confer- 
ence itself must determine the application and in- 
terpretation of any general principles enunciated 
in the Dumbarton Oaks Proposals. 

In other words, the San Francisco coiiference 
will doubtless vote on many proposals for the 
detailed setting up of the United Nations Organ- 
ization, and there is no way of knowing what the 
proposals will be. The final organization will be 
passed on by the United Nations in accordance 
■with their customary procedures, and it is hoped 
and believed that the result will be so clear that 
this great effort to eliminate future wars will re- 
ceive practically unanimous approval. 



' Buij:£nN of Jan. 28, 1945, p. 128. 



60i 

Results of Economic 
Negotiations With 
Switzerland 

Lauchlin Currie, Administrative Assistant to 
the President, returned to this country on March 
17 from Switzerland and has reported on the re- 
sults of the joint American- British-French eco- 
nomic negotiations with the Swiss Government. 
Mr. Currie was head of the American Delegation 
participating in the negotiations.' 

Mr. Currie reported on the steps taken by 
Switzerland to meet the objectives of Bretton 
Woods Resolution no. VI with respect to pre- 
venting the flight of Axis capital and the secre- 
tion of Axis assets and looted property. The Swiss 
Government has frozen all German assets in 
Switzerland, including those held through Swiss 
nationals, prohibited the importation, exportation, 
and dealing in all foreign currencies, and re- 
stricted Swiss purchases of gold from Germany. 
In addition, the Swiss Government has agreed to 
take appropriate steps in the future toward fur- 
ther implementation of Bretton Woods Resolu- 
tion no. VI. 

Another important objective obtained by the 
negotiations, Mr. Currie reported, has been the 
coniplete stoppage of shipments of coal from Ger- 
many to northern Italy across Switzerland. 
Swiss exports to Germany are to be reduced in 
value to a small fraction of their former amount. 
Switzerland has also banned electricity exports to 
Germany, and the French and Swiss Governments 
are to study the possibility of a substantial amount 
of Swiss electricity's being diverted to France. In 
addition, Switzerland has concluded a clearing 
arrangement with France whei'eby France will 
be permitted to import more from Switzerland 
than she exports to Switzerland. 

In return for the measures agreed to by the 
Swiss, the American, British, and French Gov- 
ernments have agi-eed to allow the importation 
into Switzerland of various quantities of food- 
stuffs and industrial raw materials. It has been 
agreed that the foodstuffs and the raw materials 
will be carried by Swiss ships and moved to 
Switzerland across France by Swiss trains. 



602 



DEPARTMENT OF STATE BULLETIN 



United States Telecommunications Facilities 

Statement by ASSISTANT SECRETARY CLAYTON' 



THE QUESTION before this Committee is how the 
national security and the general welfare of 
the American people can best be served in the field 
of international telecommunications. 

It has been suggested that a complete merger of 
all our international telecommunications facilities 
into a single private company, under Government 
supervision and regulation, is the best and indeed 
the only way consistent with the national interest 
to solve the problems with which this industry is 
confronted. Broadcasting is not sought to be in- 
cluded, and there are certain other relatively minor 
exclusions which do not materially affect the is- 
sues; so that when I refer to complete merger it 
will be understood that I take for granted these 
exclusions. 

In considering this proposal and the alternatives 
that have been suggested, the Department of State 
has been guided by the conviction that if there is 
any one lesson of modern times, it is that techno- 
logical and industrial leadership are indispensable 
ingredients of national power. The importance of 
such leadership is certain to increase rather than 
diminish. 

We have this leadership in the vitally important 
field of long-distance telecommunications. We 
should not jeopardize it. We must strive by all 
means to maintain and extend it. 

But we have other objectives in this field, and 
we must undertake to secure them too — provided 
only that we do not imperil our technological and 
industrial preeminence, which is all-important and 
without wliich no other advantage can avail us 
long. Our telecommunications services must be 
world-wide. They must afford us direct contact 
with foreign terminals. They must be securely 
American. They should be capable of serving 
military needs with maximum efficiency in time 
of war. They should permit the ready acquisition 
and efficient use of the far-flung facilities that have 
been built up by the military during the war, to 
the extent that such facilities may become avail- 
able for peacetime commercial use. They should 



' Made before the Senate Committee on Interstate 
Commerce on Apr. 2, 1945 (short form of statement). 



be capable of dealing adequately with foreign in- 
terests. They should make such use of available 
frequencies as to give the best over-all service. 
Eates should be as low as is consistent with good 
service and a fair wage for capital and labor. 

These objectives, I am sure, merely recapitulate 
what we all agree on. The question is how best 
to attain them. In the view of the State Depart- 
ment a complete merger into one company of our 
international telecommunications facilities, on the 
basis of our experience to date and the evidence 
at hand, is inadvisable. The Department is 
strongly of the opinion that no showing has yet 
been made that merger among competing com- 
panies is the means best calculated to protect our 
national security and promote the general welfare 
of our people. 

It is surely not too much to say that the burden 
of proof must be on those who would substitute 
monopoly for our traditional competitive system 
in any field, especially in a field where we have 
risen to preeminence under conditions of the keen- 
est competition among our own enterprises. 

Monopolies have the power to withhold im- 
provements in service and the application of ad- 
vances in the art. The Department believes that 
the best progress can be made by regulated com- 
petition, and that the regulation and the compe- 
tition are both indispensable and complement 
each other. 

There is nothing in the history of monopoly in 
any field to suggest that it is the best means to re- 
tain and extend a competitive leadership that is 
based on enterprise and initiative. 

There is another consideration of great impor- 
tance. Any merger is easier to put together than 
it is to take apart. It can hardly be denied that if 
the proposed complete unification were undertaken 
and proved unsatisfactory, it would, as a practical 
matter and in spite of the undoubted power of the 
Congress, prove exceedingly difficult to unscram- 
ble. The Department believes that it is possible to 
minimize most of the evils complained of under 
present conditions without taking decisions which 
may prove unwise and from which we may be 
unable to withdraw. 



APRIL 8, 1945 



603 



The Department does not believe that foreign 
competition is suilicient to prevent the evils of 
monopoly, because, except for a few cables, this 
competition does not touch the sei'vice to the Amer- 
ican public. Aside from the comparatively few 
cases where an American interest owns or controls 
the foreign terminus, the operation of a radiotele- 
graph or telephone circuit is American at one end 
and foreign at the other. The American public 
now enjoj's the competition between competing 
American interests at this end, although important 
foreign termini are operated by foreign interests. 
The only exception is where the volume of traffic 
is insufficient to justify the Federal Communica- 
tions Commission in allocating frequencies to more 
than one American radiotelegraph company. But 
even in such cases the competition between radio- 
telegraph and telephone and, depending on the 
location, with cable still exists. 

Thus, if there were an American monopoly, the 
only competition with foreign interests would be 
a competition not in service but in getting ad- 
vantages in third countries, in most cases countries 
that are not in a position to build and operate their 
own facilities. 

The evil in the present situation that is perhaps 
alluded to the most is the way in which it is said 
to be possible for foreign interests to play compet- 
ing United States interests against each other. I 
believe that by far the greater number of cases of 
this sort have involved competition between Amer- 
ican companies rendering the same service, and 
therefore at most would call for merging the com- 
peting companies rendering such service, so that 
the telephone, radiotelegraphy, and wire services 
could continue to compete against each other. 

The argument of economy in the use of the 
spectrum is also advanced as demanding complete 
unification. There are two questions here which 
the State Department would like to raise. 

First, whether it is wise to undertake a drastic 
reorganization, one that once accomplished will be 
very hard to alter, in perhaps the most rapidly 
developing of all industries, on the basis of an 
existing technological situation. While I am, of 
course, not qualified to predict that increases in the 
utilization of frequencies are or are not impending, 
I suppose that no one will hazard the assertion 
that we are at the end of the road in this develop- 
ment. 

The second question is : Granting the scarcity of 
frequencies and the necessity of greater economy 



in their use, is merger necessary to achieve such 
economy? Lacking the impetus of competition, 
a monopoly might well be content to get along 
without devoting the energy to improving the use 
of frequencies that the competing companies are 
now showing. 

In view of all these considerations, the question 
may well be asked : Would it not be common sense 
to insist upon the test of actual experience with 
more moderate measures before taking in one leap 
the drastic step of merger of all our international 
telecommunications into one company ? 

Specifically, the Department suggests that in 
both these problems, that is, dealing with foreign 
interests and the tecluiical problems involved in 
the efficient utilization of frequencies and coordi- 
nation of radio and cable services, the remedy lies 
in unified control of policy at the Government 
level, rather than in unifying competitive opera- 
tions. It is accordingly suggested that the Con- 
gress consider the desirability of projecting into 
peacetime in some appropriate manner the func- 
tions now exercised by the Special Interdepart- 
mental Committee on Communications, and the 
planning functions but not the wartime powers of 
the Board of War Communications. 

Better coordination of government policy in 
this field should be the first objective, and the 
point of view of the armed services should be 
brought into the formulation and control of pol- 
icy. Adequate powers should be appropriately 
placed so as to enable this Government to pro- 
tect and promote its legitimate interests. These 
powers should include, among other things, the 
power to determine from time to time with what 
foreign points it is in the national interest to have 
telecommunication services, what the nature of 
the service should be, and what companies should 
perform it. All the facilities of the State Depart- 
ment could thus be most effectively put to the serv- 
ice of the carriers designated. 

The Department does not believe that a merger 
of existing carriers would necessarily forward the 
objectives of having world-wide telecommunica- 
tions services with direct contact with foreign ter- 
minals. 

Nor is the Department convinced that sUch a 
merger is necessary in order to enable the armed 
services satisfactorily to dispose of any part of 
the world-wide facilities that they have built up 
during the war. It has been said that it would be 
an embarrassment to have to choose between com- 



604 



DEPARTMENT OF STATE BULLETIN 



peting bidders. Surely if competition is worth 
preserving this is hardly a sullicicnt reason to give 
it up. It has not been claimed that there are not 
presently existing United States enterprises thut 
are fully capable of operating efficiently any facil- 
ities that are made available for commercial iise. 

In short, Mr. Chairman, keeping in mind that 
our most valuable asset from every point of view 
is our leadership in the art and its application in 
operations and manufacturing, it is the view of the 
Department of State that we should take a long 
look before we give up this competitive form of 
organization, which is characteristically American, 
in favor of a form of organization that has never 
distinguished itself for encouraging initiative and 
enterprise. It is by no means clear to the De- 
partment from the evidence so far produced that 
the evils complained of are either as great or as 
dangerous to the national interest as they are 
claimed to be, or that they cannot be adequately 
dealt with by means more likely to preserve the 
advantages we now enjoy. 

In the view of the Department, the farthest that 
we should consider going at the present time (and 
in our belief tlie advisability of doing this is still 
an open question) is merger within each type of 
service that would retain competition between the 
wire services, radiotelegraphy, and radiotelephone. 
The Department would seriously question the ef- 
fect on the telephone service of permitting it to be 
operated by a company that is also rendering other 
and competing types of service. When we have 
the best telephone service in the world it seems to 
me that it is a decidedly unattractive risk to put 
it into a common pot with the other services — 
and organizing them in separate divisions, or even 
separate operating companies under one holding 
company, does not to my mind make the risk suf- 
ficiently attractive. 

The Department is of the opinion that no ar- 
rangements in international telecommunications 
should be undertaken which might have a tendency 
to hold back the development of radio, either for 
overseas or for domestic uses. This means keeping 
wire services, both cables and land lines, sepa- 
rated from radio. Such a conclusion leaves open 
the question whether domestic and international 
services should be kept separate. At least until 
the end of the war, domestic radiotelegraph must 
remain closed down. But this would not prevent 
the unification of cables and overseas radio in sep- 
arate competing services and the continuation of 



the present arrangement whereby the international 
business picked up by the domestic telegraph com- 
pany is equitably divided when it leaves our shores. 

There is a special situation in the Pacific be- 
cause of the limitations of the existing cable, and 
there would appear to be much force to the view 
that there should be not less than two radio serv- 
ices competing in that area. This is one of the 
considerations that leads the Department to feel 
considerable reserve toward the proposal for 
merger even within the ditferent services and try- 
ing to retain competition between them. 

The Department also considers that the press 
services are a special situation because of the public 
interest in the receipt and dissemination of news. 
If all U.S. telecommunications facilities for the 
international transmission of news were in the 
hands of any one company, the freedom of the 
press might be jeopardized. 

There is in existence one company devoted ex- 
clusively to the press service, namely Press Wire- 
less, Inc. Its record seems to indicate the advan- 
tage of a high degree of specialization in this field 
and to point to the desirability of leaving Press 
Wireless out of any merger that might be at- 
tempted. 

Aside from the special cases, it seems at least 
possible that a merged radio company, performing 
its own i^ick-up and delivery service, and a merged 
cable company might operate to the public benefit. 
The power of the Congress to cause an equitable 
distribution between competing international car- 
riers of international traffic originated by the land- 
wire company might well lend an element of flexi- 
bility especially if it should appear that the radio 
company was temporai'ily or permanently pre- 
vented by lack of frequencies for domestic use 
from originating a sufficient volume of traffic. If a 
domestic radio system should develop, the public 
would be the gainer. If not, the benefits of com- 
petition in the international service would be pre- 
served. If either the cables or the land-wire 
system, or both, should prove unable to compete 
with radio, it would then be open to the Congress 
to determine whether or not they should be sub- 
sidized, and how; and, in any event, the develop- 
ment of both radio and wire-cable sei^arately 
would not have been inhibited in the interval. 

In conclusion, therefore, the Department of 
State is not able at this time to join in the recom- 
mendation for a complete or partial merger in our 

{Continued on page 649) 



APRIL 8, 1945 



605 



United Nations Will Write Charter for a 
World Organization 



Address by the SECRETARY OF STATE" 



[Released to the press April 6] 

In speaking here in New York this afternoon at 
the dedication of the building which is henceforth 
to be the headquarters of the Council on Foreign 
Relations, I come to bear witness, as has eveiy 
Secretary of State during the past quarter of a 
century, to the great services and influence of this 
organization in spreading knowledge and under- 
standing of the issues of United States foreign 
policy. 

Certainly today — after two world wars in 25 
years — there can be few Americans, whether they 
live in the East or the West or the South, who do 
not understand how directly and personally they 
are concerned in our relations with other nations. 

Ever since Pearl Harbor the hopes and thoughts 
of the people of this country have been centered 
increasingly upon creating at last a world organi- 
zation wliich would be endowed with the power 
and the will this time truly to maintain the peace. 

And ever since Pearl Harbor intensive studies 
and preparatory discussions of such an organiza- 
tion have been carried on by this Government — and 
by other governments. There were many plans 
and a multitude of variations in viewpoint which 
had to be weighed and analyzed and adjusted. 
This process took two years and a half. 

By last summer we were ready for discussions 
with our principal Allies — the Soviet Union, Great 
Britain, and China. Out of these discussions, and 
all the preliminary work that had gone before, 
evolved the Dumbarton Oaks Proposals. 

Since last October these Proposals have been 
before the peoples and the governments of all 
the United Nations for further discussion and 
analysis. 

Now — seven months later — all the United Na- 
tions are about to meet in San Francisco to write 
the Charter of a world Organization on the basis 
of these Proposals. 

I have briefly reviewed this bit of history for a 
reason. 

It has taken three and a half years of the most 
prodigious and single-minded effort the world has 
ever seen to bring the fighting forces of the United 



Nations into the heart of Germany and close to 
the home islands of Japan. 

We can be sure that winning the peace is going 
to take a good deal longer and that it will be just 
as difficult and challenging a task. 

Early in the war, when the United States and 
the other United Nations were in mortal danger 
from our enemies, we were steady and resolute 
and we found the means to develop and strengthen 
that unity of action without which we could not 
win victory. This is, perhaps, more difficult, now 
that the immediate danger has passed. 

But the danger has not really passed — the dan- 
ger that we shall fail in rebuilding the world and 
in preventing what would be the greatest and per- 
haps the fatal disaster of our history — another 
world war, 

Wliat is required above everything else today is 
the same steadiness and fixed resolution and clear 
understanding of our national interest with which 
we met the tests of war in 1942 and 1943 and 1944. 
Certainly we shall never succeed if every road- 
block or every land-mine on the road to peace 
throws us into a panic and, conversely, if every 
hundred yards of clear going makes us think we 
have nothing more to worry about. 

It is with this point in mind that I wish to talk 
briefly with you about the San Francisco confer- 
ence and about some of the forebodings and diffi- 
culties that have arisen concerning it. 

First of all, let us keep the San Francisco con- 
ference in its proper perspective. It is not a peace 
conference. It will not deal with boundaries or 
reparations or questions concerned with the dis- 
armament and control of Germany and Japan. Its 
purpose is to prepare the Charter of a world Or- 
ganization to preserve the peace in the future 
which can be submitted to the member nations for 
adoption. 



'Delivered before the Council on Foreign Relations at 
New York, N. Y., on Apr. 6, 1945 and broadcast over the 
network of the Columbia Broadcasting System. 



606 



DEPARTMENT OF STATE BULLETIN 



It will be a difficult task, a task as difficult as the 
writing of our own Constitution in 1787, for the 
conference at San Francisco, like the Convention 
in Philadelphia, will be pioneering a new way. 
The Charter will inevitably be the product of a 
series of adjustments just as our own Constitution 
was the product of a series of compromises between 
the North and the South, large States and small, 
the merchant interests and the agrarian interests. 
Without these adjustments of interest and view- 
point our Constitution could not have been written. 
Nor could it have been ratified by the 13 original 
States. 

Probably no charter that can be agreed upon at 
San Francisco will completely meet the wishes of 
any one of the United Nations. What we must do 
there is to create a framework for the world Or- 
ganization that can command the support of the 
great majority of the peoples of the world, that 
will be soundly based, and that will be open to 
improvement as we gain experience in the func- 
tioning of the Organization after it is established. 

I am reminded again of our own Constitutional 
Convention. The delegates to that Convention 
clearly foresaw the necessity for later adjustments 
and amendments and made provision for them. 
Indeed, the first ten amendments to our Consti- 
tution went into effect only four years after it 
was written. 

I believe that it was a wise decision, indeed an 
essential one, that the establishment of the world 
Organization should be kept entirely separate and 
apart from the settlements that will follow this 
war. It has been said that by joining in the world 
Organization before the peace settlements are 
made the United States and the other members 
would be committed in advance to maintaining all 
these settlements in perpetuity whether they are 
good or bad. 

Just the contrary is true. By creating the world 
Organization first, and separating its functions 
from the peace settlements, we place it above and 
apart from these settlements and leave it just as 
free to deal with threats to the peace of the world 
that may later arise from these settlements as 
from any other causes. The Dumbarton Oaks Pro- 
posals, through their provisions for dealing with 
any situation that might endanger the peace, pro- 
vide for the exercise of this responsibility by the 
world Organization. 

For this reason, as well as for others, the rapid 
approach of the end of the war in Europe, far 



from making postponement of the San Francisco 
conference advisable, makes it all the more impor- 
tant that the conference be held on schedule and 
that its work be completed at the earliest possible 
moment. 

We have ahead of us many other tremendously 
difficult tasks with which the San Francisco con- 
ference will not be concerned. We shall not be 
able to accomplish these other tasks in a few weeks' 
or a few months' time. Thej' will take years. We 
have to deal with the disarmament and control of 
Germany and Japan, after they have surrendered, 
with the tasks of repairing the disastrous damage 
done by the war to the world's economy, of assist- 
ing the liberated peoples to regain freedom and 
security, and of reaching the agreements on many 
other matters, social and economic, that are neces- 
sary to lasting peace. 

Concern is expressed over the prospects of the 
San Francisco conference because of the delays 
that have arisen over establishment of a new Polish 
Provisional Government of National Unity, or 
because of the questions raised by the Soviet re- 
quest for separate membership in the Assembly of 
the world Organization of two of the Soviet Re- 
publics, or because of any other of the difficulties 
with which we are inevitably surrounded as we 
approach the end of the war. 

I can assure you that if we based our course of 
action on that line of reasoning we would never 
have a conference, or a world Organization. New 
problems of this nature will continue to arise. 
The coming months and years will be, in fact, a 
continuous challenge to our good sense and our 
will to master the difficulties of peace. 

I hope that all Americans will keep such tem- 
porary difficulties as the delay over the new Polish 
Provisional Government of National Unity in per- 
spective. 

It is important that this new government be 
established in time to make it possible for Poland 
to be represented at San Francisco. The United 
States Government is doing all in its power to 
bring this about. Poland is a United Nation and 
should be there. 

But I ask you to remember that the agreement 
made at the Crimea Conference about Poland is 
only seven weeks old and that it was reached after 
two years of divergent views among the principal 
Allies about the Government of Poland. The de- 
lay in carrying out the Crimea decision on Poland 



At'RIL S, J945 



607 



, has been disappointing, but in this perspective it 
lias not been long. 

I ask you also to remember that the Soviet 
Union, Great Britain, and the United States have 
repeatedly reaflirmed and always agreed in their 
common determination to see established a strong, 
independent, and democratic Poland after this 
war. 

Nothing has happened to shake my belief that 
the Crimea agreement on Poland will be carried 
out. That agreement, you will recall, provides 
that the new Polish Provisional Government of 
National Unity shall be formed by reorganizing 
(lie provisional government now functioning in 
Poland "on a broader democratic basis with the 
inclusion of democratic leaders from Poland itself 
and from Poles abroad", and that this new govern- 
ment shall be pledged to holding free elections as 
soon as possible on the basis of universal suffrage 
and secret ballot, with all democratic and anti- 
Xazi parties having the right to take part.^ 

Our participation in that agreement reflects the 
steadfast determination of the United States Gov- 
ernment to respect the legitimate rights of small 
nations. No nation in the world has shown greater 
interest than the United States in the independence 
of small countries and in their right to manage 
their own affairs. This principle is basic in our 
dealings with all nations. It is basic in our policy 
for the peace. It is basic in the Dumbarton Oaks 
Proposals. 

The freedom and independence of small nations 
cannot be maintained, however, unless the large 
countries unite their power to preserve a peace in 
which the democratic rights of all nations can be 
upheld. 

The only hope of the small countries, as of the 
large countries, lies in a world so organized for 
peace that the industrial and military power of the 
large nations is used lawfully for the general wel- 
fare of all nations. The alternative is a world in 
anarchy in which lawless power runs riot and 
small nations are the first to be trampled under- 
foot. 

The large nations, and all the United Nations, 
are firmly united in the purpose and in the neces- 
sity to create a new world organized for peace, 
because it is to the vital interest of each of them 
to do so. Let us never forget that this unity of 
purpose and this community of national interest 
is paramount to all the lesser differences among 
us in interests and in history, language, and cus- 

639429 — 45 3 



toms. Because of that paramount unity of pur- 
pose and community of interest, these lesser dif- 
ferences can be and will be overcome, as they arise, 
through the hard and exacting day-to-day work 
of consultation, negotiation, and adjustment 
which are the essence of successful cooperation 
among free peoples. 

Eight years ago my great predecessor, Cordell 
Hull, when speaking before the Council on For- 
eign Relations, called for "a world organized for 
peace and advancing civilization, rather than for 
war and degrading savagery." 

Now, after the devastating war which he fore- 
saw, the world has its chance. It has taken the 
sacrifice of millions of lives, the outpouring of our 
wealth, and untold destruction and suffering to 
bring us to this moment. 

The San Francisco conference will be a decisive 
juncture in the history of America and of the 
world. But we are only at the beginning of the 
long road to lasting peace. 

If we are to complete the journey, surely we will 
neither fail nor falter now, when we have hardly 
begun upon it. 

American character and America's achievements 
have been fashioned by high vision and good 
common sense. With that power of vision to keep 
the goal we seek always before us, and that com- 
mon sense to guide us, I know that America will 
not fail either the world or herself. 



The Proclaimed List 

[Released to the press April 8] 

The Acting Secretary of State, acting in con- 
junction with the Acting Secretarj' of the 
Treasury, the Attorney General, the Secretary of 
Commerce, the Administrator of the Foreign Eco- 
nomic Administration, and the Director of the 
Office of Inter-American Affairs, on April 7 issued 
Cumulative Supplement No. 2 to Revision IX of 
the Proclaimed List of Certain Blocked Nationals. 

Cumulative Supplement No. 2 to Revision IX 
supersedes Cumulative Supplement No. 1 dated 
March 9, 1945. 

Part I of Cumulative SupjDlement No. 2 con- 
tains 59 additional listings in the other American 
republics and 171 deletions; part II contains 15 
additional listings outside the American republics 
and 29 deletions. 



' Buu-ETiN of Feb. 18, 1945, p. 215. 



608 



DEPARTMENT OF STATE BULLETIN 



United Nations Conference on International 

Organization 



PROMPTNESS IN PLANNING WORLD 
ORGANIZATION 

[Released to the press April 3] 

A statement by the Secretary of State at his 
press and radio news conference on April 3 
follows : 

''This Government believes that the rapid 
tempo of military and political developments, far 
from requiring postponement of the San Francisco 
Conference on International Organization, makes 
it increasingly necessary that the plans for this 
Organization worked out at Dumbarton Oaks be 
carried on promptly. We have, moreover, re- 
ceived no indication that any government believes 
that the Conference should be postponed." 

ADVISERS TO THE AMERICAN DELEGATION 

[Released to the press April 3] 

The following people have been appointed as 
advisers to the American Delegation to the United 
Nations Conference on International Organization. 
They were invited to meet the American Delega- 
tion on April 3 at the Department of State : 

Department of State 
Mr. Dunn Mr. Armstrong 

Mr. Hackworth Mr. Taussig 

Mr. Pasvolsky Mr. Taft 

Mr. Bowman Mr. Hickerson 

Treasury Department 
Mr. White 
War Department 
Mr. McCloy General Fairchild 

General Embick General Hertford 

Department of Justice 
To be appointed 

Navy Department 
Mr. Gates Admiral Willson 

Admiral Hepburn Admiral Train 

Department of Interior 
Mr. Fortas 

Department of Agriculture 
Mr. Brannan 

Department of Commerce 
Mr. Waring 

Department of Labor 
To be appointed 

Foreign Economic Administration 
Mr. Cox 



ACCEPTANCE OF INVITATION BY JOHN FOSTER 

DULLES TO SERVE AS ADVISER TO 

THE AMERICAN DELEGATION 

[Released to the press April 5) 

Acting Secretary Acheson on April 5 released 
the following letter from John Foster Dulles to 
the Secretary of State, in which he accepted the 
invitation of the Secretary to serve as an Adviser 
to the American Delegation to the United Nations 
Conference on International Organization at San 
Francisco : 

April 4, 1945. 
My Dear Mr. Secretary: 

You have told me that it is your desire, con- 
curred in by the President, that I act as a general 
adviser to the United States Delegation to the 
San Francisco Conference. 

As you know, I have previously stated that it was 
my preference to have no official status at San 
Francisco but rather, in a private capacity, to seek 
to advance the great purpose of that conference. 
Yon asked me to discuss the matter with you and 
after our discussion in Washington last Monday, 
you said that you still felt that I could best serve 
in an official capacity. 

After reflection, I am happy to advise you that 
I accept with appreciation your invitation to me 
to be an adviser to the United States Delegation. 

I am, my dear Mr. Secretary, 
Sincerely yours, 

John Foster Dulles 

ACCEPTANCE BY PERU AND YUGOSLAVIA 
OF INVITATION TO THE CONFERENCE 

(Released to the press April 3] 

The Republic of Peru, on March 22, 1945, and 
the Kingdom of Yugoslavia, on April 7,' formally 
accepted the invitation to send representatives to 
the United Nations Conference on International 
Organization at San Francisco on April 25, ex- 
tended by the Government of the United States on 
behalf of itself and of the Governments of the 
United Kingdom of Great Britain and Northern 
Ireland, the Union of Soviet Socialist Republics, 
and the Republic of China. 



' Released to the press Apr. 7, 1945. 



APRIL 8. 1945 



609 



ANNOUNCEMENT OF VARIOUS FOREIGN 
DELEGATIONS' 

[Released to the press April 3] 

Soviet Delegation 

It was officially announced in Moscow that the 
Soviet Delegation would be headed by His Excel- 
lency the Soviet Ambassador to the United States, 
the Honoi'able A. A. Gromyko. Other members of 
the Delegation include Minister H. A. Obolev; 
Minister K. V. Novikov ; Minister S. K. Tsarapkin ; 
Lt. Gen. A. F. Vasiliev; Rear Admiral K. K. 
Rodionov; Prof. S. A. Golunski; and Prof. S. B. 
Krylov. 

Chinese Delegation 

It has been announced in Chungking that the 
Chinese Delegation will be headed by Dr. T. V. 
Soong, Acting President of the Executive Yuan. 
Other delegates include Carson Chang, member of 
the People's Political Council ; Hu Lin, managing 
director of "Ta Kung Pao"; Dr. Hu Shih, former 
Ambassador to the United States; Li Huang; 
Tung Pi-Wu, member of the People's Political 
Council ; Dr. V. K. Wellington Koo, Ambassador 
to Great Britain ; Dr. Wang Chung-Hui, Secretary 
General of China's Supreme Defense Council ; Dr. 
Wei Tao-ming, Chinese Ambassador to the United 
States ; Dr. Wu Yi-Fang, member of the People's 
Political Council; and Dr. Sao-Ke Alfred Sze, 
former Ambassador to the United States. 
Belgian Delegation 

The Belgian Government has announced that its 
Delegation wiU be headed by Foreign Minister 
Paul Henri Spaak. Other members of the Dele- 
gation include Frans Van Cauwelaert; Fernand 
De House, Professor of International Law ; Fer- 
nand Van Langenliove, Secretarj' General of the 
Ministry of Foreign Ail'airs ; Victor De Laveleye, 
member of the House of Representatives; Albert 
Martneaux, Minister of Public Health ; Henri Ro- 
lin, member of the Senate; Charles De Visscher, 
Minister of Justice; and Walter Loridan, Prin- 
cipal Assistant to the Foreign Minister. 

No'i'wegian Delegation 

The Govei'nment of Norway has announced that 
its Delegation will be led by Foreign Minister 

' For members of other foreign delegations see Buixetin 
of Apr. 1, 1945, p. 576. 



Trygve Lie. Other Delegates include C. J. Ham- 
bro, President of Storting; Wilhelm Morgen- 
stierne, Norwegian Ambassador to the United 
States ; Dr. Arnold Raestad, Governor of the Bank 
of Norway; Dr. J. S. Worm-Muller, Professor of 
Modern History at the University of Oslo ; and Dr. 
Arne Ording, Political Adviser to the Foreign 
Office. The Delegation includes the following ad- 
visers: Maj. Gen. William Steffens, Norwegian 
Military Attache at Moscow; Lars Christensen, 
Financial Adviser to the Norwegian Embassy at 
Washington; Dr. Karl Evang, Director General 
of the Norwegian Public Health Service ; Ingveld 
Haugen, President of the Norwegian Seamen's 
Union ; Lars Jorstad, Counselor of the Norwegian 
Embassy at Washington; and Mrs. Ase Gruda 
Skard, adviser to the Norwegian Embassy at 
Washington on Cultural and Social Matters. 
Hans Olav, Press Attache of the Norwegian Em- 
bassy at Washington, and Sven N. Oftedal, Press 
Attache of the Norwegian Legation, Montreal, 
will handle press relations for the Delegates. The 
secretariat includes Nils A. Jorgenson, First Sec- 
retary in the Foreign Office and Secretarj* of the* 
Delegation; Edward Hambro, First Secretary in 
the Foreign Office; Miss Ingrid Martins, Second 
Secretary in the Foreign Office and Private Secre- 
tary to the Foreign Minister; and Mrs. Sissel 
Fosse, Second Secretary in the Foreign Office, Sec- 
ond Lieutenant in the Norwegian Women's Army 
Corps, and daughter of the Foreign Minister. 

Philippine Delegation 

The Philippine Delegation will be headed by 
Brig. Gen. Carlos F'. Romulo, Resident Commis- 
sioner of the Philippine Commonwealth. Other 
Delegates include Maximo M. Kalaw ; Prof. Vin- 
cente Cinco ; Francisco Delgado ; Felicisimo Feria ; 
Carlos Garcia ; Pedro Lopez ; Urbano Zaf ra ; and 
Col. Alejandro Melchor. 

[Released to the press April 6] 

Dominican Delegation 

The Dominican Delegation to the United Na- 
tions Conference on International Organization 
at San Francisco on April 25 will be headed by 
Foreign Alinister Peiia Batlle and the other mem- 
bers will be Emilio Garcia Godoy, Ambassador to 
the United States; Gilberto Sanchez Lustrino, edi- 
tor of La Nacion; General Antonio Leyba y Pou ; 
Tulio Franco y Franco; and Miss Minerva Ber- 



610 



DEPARTMENT OF STATE BULLETly 



nardino, president of Inter-American Commission 
of Women. 

Ethiopian Delegation 

Prime Minister Bitweddad Makonnen Endal- 
kachau will head the Ethiopian Delegation, which 
will include Ato Aklllou Hupte AVold, Vice Min- 
ister for Foreign Affairs; Ato Anibai Wold- 
Mariam, Vice Minister of Justice; Blatta Ephrem 
Tewelde Medhen, Minister to the United States; 
Ato Emanuel Abraham, Director General of Edu- 
cation; Ato Getahoun Tesemma, First Secretary, 
Ethiopian Legation, Washington; Ato Menasse 
Lema, Director General, Ministry of Finance; 
Adviser: John Spencer, Adviser to Ministry for 
Foreign Affairs; Secretary: Ato Petros Sahlu, 
employee, Ministry for Foreign Affairs. 

Greek Delegation 

The Department announced on ^larch 30 ^ that 
the Greek Delegation would be headed by the Min- 
ister for Foreign Affairs, John Sofianopoulos. 
Other members will be George Melas, Under Sec- 
retary for Foreign Affairs ; Kyriakas Varvaressos, 
Governor of the Bank of Greece; John Politis, 
Ambassador Extraordinary and Plenipotentiary; 
Athanasios Agnides, Ambassador Extraordinary 
and Plenipotentiary to Great Britain; Cimon P. 
Diamantopoulos, Ambassador Extraordinary and 
Plenipotentiary to the United States of America; 
Staff: Alexander Argyropoulos, Minister Resi- 
dent, Economic Adviser; Constantin Goulimis, 
Legal Adviser; John Spiropoulos, Professor of 
International Law, Athens University, Legal Ad- 
viser; Colonel S. Georgoulis, Military Adviser; 
Wing Commander Constantin Platsis, Military 
Adviser ; John Liatis, First Secretary, Greek Em- 
bassy, Washington, Secretary to the Delegation; 
Miltiades Delivanis, Secretary at the Ministry of 
Foreign Affairs, Assistant Secretary to the Dele- 
gation; H. George Michalopoulos, Assistant Sec- 
retary to the Delegation; J. George Cavoumides, 
Chief of Section in Press and Information Divi- 
sion of the Ministry of Foreign Affairs, head of 
Press Service to the Delegation; Elefterios Cot- 
sarides, journalist, Adviser to the Press ; K. George 
Mylonas, secretary to the Press Service of the Dele- 
gation ; L. Constantin Vilos, attache to the Dele- 
gation; Maris Embirikos, attache to the Delega- 



' Bm.t.KTiN of Apr. 1, 1045, p. 576. 
'Released to the press Apr. 7, 1945. 



tion; Experts: Charalainbos Tlieodoropoulos, Di- 
rector General. Ministry of National Economy; 
Peter Exardakis, Director General, General Ac- 
counting Service; Christos Vasmatzis, Director 
of the Agricultural Bank of Greece ; Christos Evel- 
pides; Nicholas Dritsas; George TrijJans. 

Haitian Delegation 

The Haitian Delegation will include the follow- 
ing : Gerard Lescot, Minister for Foreign Affairs ; 
Vely Thebaud, Minister for the Interior; General 
Nemours, President of the Senate; Andre Liau- 
taud, Ambassador in Washington ; Assistant Dele 
gates: Pierre Chauvet, Under Secretary of State 
for Commerce; Major Antoine Levelt, Director of 
the Military School; Antoine Bervin, Haitian 
Charge d'Affaires at Habana ; Technical Advisers : 
Louis Moravia; Joseph Nadal; Seci'etary: Louis 
Gardere. 

Honduran Delegation 

The Honduran Ambassador to the United States, 
Julian R. Caceres, will be chairman of his country's 
Delegation, assisted by Marcos Carias Reyes and 
Virgilio Galvez. Jorge Fidel Duron will be Secre- 
tary of the Delegation. 

Liherian Delegation 

Vice President C. L. Simpson will be chairman 
of the Liberian Delegation. Other members in- 
clude Secretary of State Gabriel Dennis, adviser; 
J. L. Gibson, Chairman, Senate Foreign Relations 
Committee; Richard A. Henries, Chairman of 
House Foreign Relations Committee; Colomen 
Moses Grant, Officer Commanding Frontier Force, 
Military Aide; Nathan Barnes, Secretary of Com- 
mission; and George Padmore, Secretary to the 
Adviser. 

Yugoslav Delegation ' 

The Chief Delegate will be the Minister of For- 
eign Affairs, Ivan Subasic; the Minister of 
Finance, Sreten Zujevic, and Stanoje Simic, 
Ambassador Designate to the United States, will 
be Delegates. Dr. Stoyan Gavrilovic, Assistant 
Minister of Foreign Affairs, will be an Assistant 
Delegate, and Dr. Teodor Gjurgjevic, Chief of 
Protocol, will be Adviser to the Delegation. 

Secretaries to the Delegation will be Dr. Drago- 
van Sepic, Chief of the Cabinet of the Ministry of 
Foreign Affairs, and Milorad Cerovic, Secretary 
in the Ministry of Foreign Affairs. 



i 



APRIL 8, 1945 



611 



Declaration of War by Argentina 



RESOLUTION BY THE GOVERNING BOARD OF THE 
PAN AMERICAN UNION' 



THE Governing Board of the Pan American 
LTnion has noted with satisfaction the measures 
adopted by the Argentine Government, referred 
to in the communication directed to the Director 
General of tliis institution, Dr. L. S. Rowe, by 
said Government under date of March 28, 1945, as 
well as those subsequently taken by said Govern- 
ment. 

The Board believes that these measures are in 
accordance with the criteria of Resolution 59 - of 



the Conference of Mexico and, consequently, re- 
solves to request the Director General of the Pan 
American Union to transmit the above-mentioned 
communication of the Argentine Government, to- 
gether with a copy of this resolution, to the Presi- 
dent of the Inter-American Conference on 
Problems of War and Peace, His Excellency Eze- 
quiel Padilla, with a view to the signature by 
Argentina of the Final Act of the Conference of 
Mexico. 



MESSAGE FROM THE ARGENTINE AMBASSADOR TO THE 



DIRECTOR GENERAL 



EMBASSY 

OF THE 

ARGENTINE REPUBLIC 

Washington, March 28, 19Jt6 
V. P. No. 10 

Mr. Director General : 

With reference to the communication of His 
Excellency, Sefior Don Ezequiel Padilla, President 
of the Inter-American Conference on Problems of 
War and Peace, received through the Pan Ameri- 
can Union with a note of the Director General 
dated March 14, 1 am pleased to inform you : 

First : That the Government of the Argentine 
Rejiublic accepts the invitation ex- 
tended to it by the twenty American 
Republics that participated in the 
Inter-American Conference on Prob- 
lems of War and Peace, and adheres to 
the Final Act of the Conference ; 

Second : That in order to identify the policy of 
the Nation with the common policy of 
the other American nations and associ- 
ate itself with them against threats or 
acts of aggi'ession of any countiy 
against an American State, the Govern- 
ment of the Nation yesterday declared 
a state of war between the Argentine 
Republic on the one hand and the Em- 
pire of Japan and Germany on the 
other ; 



Third: That in accordance with the position 
adopted, there shall be taken immedi- 
ately all emergency measures incident 
to the state of belligerency, as well as 
those that may be necessary to prevent 
and repress activities that may endan- 
ger the war effort of the United Nations 
or threaten the peace, welfare or se- 
curity of the American Nations. 

For appropriate action I transmit herewith the 
text of the decree issued by the Executive Power 
which pertains to the above-mentioned measures. 

I beg to remain, Mr. Director General, with as- 
surances of my highest consideration. 

RoDOLFO Garcia Arias 

[Enclosure] 

Decree No. 69.'t6/J,5 

Buenos Aires, March 27, 19^5 
In view of the communication of the Director 
General of the Pan American Union enclosing a 
copy of the Final Act of the Inter- Anerican Con- 
ference on Problems of War and Peace held at 
Mexico City, and a certified copy of Resolution 
LIX, approved March 7, 1945, by the twenty 
American States that participated in the afore- 
mentioned Conference, and considering: 

' Adopted on Mar. 31 and released to the press by the 
Pan American Union Mar. 31, 1945. 
'Bulletin of Mar. 18, 1945, p. 450. 



612 



DEPARTMENT OF STATE BULLETIN 



That Article 6 of said resolution referring to 
our country, states that the Final Act is open to 
the adherence of the Argentine Republic and 
authorizes the President of the Conference so to 
inform the Government of the Argentine Republic 
through the Pan American Union ; 

That said resolution recognizes that the unity 
of the peoples of America is indivisible, and 
rightly affirms that the Argentine Republic is and 
always has been an integral part of the Union of 
the American Republics, and that it likewise con- 
jsiders that complete solidarity and a common 
policy among the American States in the event 
of threats or acts of aggression by any State 
against an American State are essential to the 
peace and security of the Continent ; 

That the Government of the Republic, pursu- 
ant to the established foreign policy of the Argen- 
tine Republic, reaffirmed its opposition to aggres- 
sion and its solidarity with its sister nations by 
means of the declarations of the Acting Minister 
of Foreign Affairs and Worship on March 7 of the 
present year, in which he referred especially to 
previous declarations of this Government based 
on Argentine tradition and policy; 

That the preamble of the Act of Chapultepec ' 
and the principles it enumerates as incorporated 
in the international law of our Continent since 
1890, have at all times guided the foreign policy 
of the Nation and coincide with the principles of 
Argentine international policy; 

That the Argentine Republic has always col- 
laborated with the American States in all action 
tending to unite the peoples of the Continent; that 
this traditional policy of generations of Argen- 
tines from the early days of our independence has 
been inspired by a sentiment of true and effective 
Americanism, a consequence of the injunctions of 
the noble principles that have always regulated our 
international life, manifested and proclaimed by 
the Argentine Republic in Pan American con- 
ferences, incorporated in numerous laws, reflected 
in the work of the Pan American Union, and put 
into effect with disinterested effort ; 

That in view of the unanimous gesture of the 
sister nations that attended the Mexico City Con- 
ference, the Government of the Nation, animated 
by the highest ideals of Continental solidarity, the 
guiding principle of our international policy, can- 

' Bulletin of Mar. 4, 1945, p. 339. 
' Bulletin of Dec. 9, 1941, p. 485, 



not remain indifferent, in view of the elevated 
spirit of American confraternity; 

That Japan attacked the United States at Pearl 
Harbor, as was recognized officially by the Argen- 
tine Government in a decree of December 9, 1941,= 
declaring the United States, upon which Germany 
later declared war, a non-belligerent; that new 
aggressions on the part of Japan against any 
American nation are not impossible; that neigh- 
boring and friendly countries are now in a state of 
belligerency with the Empire of Japan and thus 
exposed to possible attack by the latter; 

That in view of this situation, and new events 
that have occurred, the Government of the Nation, 
pursuant to its tradition of American solidarity, 
proposes once again to unify its policy with the 
common policy of the other States of the Conti- 
nent in order to occupy the place that corresponds 
to it and to sliare the responsibilities that may de- 
volve upon it; 

That the Government of the Nation accepts and 
finds itself prepared to put into effect the princi- 
ples, declarations and recommendations of the 
Mexico City Conference; that the provisions of 
Article 67, Section 21, and Article 86, Section 18, 
of the National Constitution and the decisions of 
the Supreme Court of the Nation authorize the 
taking of the measures consequent upon the accept- 
ance by the Government of the Republic of the in- 
vitation of our sister nations; that in order to 
adopt such measures the Executive Power in the 
present circumstances considered it desirable to 
consult public opinion that would assure a knowl- 
edge of the popular will ; 

THE PRESIDENT OF THE AEGENTIXE NATION 

IN A General agreement with the ministers 

DECREES : 

Article 1. The Government of the Nation ac- 
cepts the invitation extended by the twenty Ameri- 
can Republics participating in the Inter- American 
Conference on Problems of War and Peace, and 
adheres to the Final Act of that Conference. 

Article 2. In order to identify the policy of the 
Nation with that of the other Ajnerican Republics 
and associate itself with them against threats or 
acts of aggression of any country against an Amer- 
ican State, there is declared a state of war between 
the Argentine Republic on the one hand and the 
Empire of Japan on the other. 

Article 3. There is likewise declared a state of 
■war between the Argentine Republic and Ger- 



APRIL 8, 1945 



613 



many, in view of the fact that the latter is an ally 
of Japan. 

Article 4- Through the respective Ministries and 
government Departments, there shall be adopted 
immediately the measures necessary for a state 
of belligerency, as well as those required to put to 
a definite end, all activity of persons, firms and 
enterprises of whatever nationality, that might 
endanger the security of the State or interfere 
with the war effort of the United Nations or 
threaten the peace, welfare, and security of the 
American Nations. 

Article 5. This decree shall be communicated, 
published, listed in the National Register, and 

nled. (Signed) Edelmiro J. Fareeix 

(Countersigned) Cesar Ameghino 
Alberto Teisaiee 
Juan D. Peron 
Amaro Avalos 
Juan Pistarini 
Bartolome de La Colina 
Julio C. Checchi 



Need for Collaborative Action 
To Continue Mobilization of 
Economic Resources 

At the Inter- American Conference on Problems 
of War and Peace, the American republics de- 
clared in the "Economic Charter of the Amer- 
icas" their firm purpose to collaborate in a pro- 
gram for the attainment of continued mobilization 
of their economic resources until total victory, of 
economic stability of the American republics dur- 
ing the transition from wartime to peacetime con- 
ditions, and of a "constructive basis for the sound 
economic development of the Americas". In the 
attainment of those objectives the American re- 
publics at the Conference declared as among their 
guiding principles that they would seek agreed 
action by governments to prevent private agree- 
ments which restrict international trade, such as 
cartels or other private business arrangements 
which "obstruct international trade, stifle compe- 
tition, and interfere with the maximum efficiency 
of production and fair competitive prices to 
consumers".^ 



The need for such collaborative action by the 
United Nations was expressed by President Eoose- 
velt on September 6 when he stated that the policy 
of this Government in its trade-agreements pro- 
gram "has as its objective the elimination of bar- 
riers to the free flow of trade in international com- 
merce" and that "cartel practices which restrict 
the free flow of goods in foreign commerce will 
have to be curbed".^ 

Assistant Secretary Clayton, in a statement 
made in Mexico City on March 6, explained car- 
tels in the following manner : 

"Distinction can be drawn between private car- 
tel arrangements which have to do with the fixing 
of prices, the allocation of markets and the control 
of production for private profit, particularly when 
such agreements are made by such industries with 
a limited number of products, as the chemical in- 
dustry; and an international agreement under 
government auspices which relates to commodities 
which have developed unmarketable surpluses and 
which concern raw materials in the production of 
which millions of producers are involved. We can 
defend the latter while we condemn the former." 

The Economic Charter as stated in the Final Act 
of the Conference also emphasizes the need for 
a control over those unmarketable surpluses by 
including the guiding principle that declares the 
American republics must "cooperate for the gen- 
eral adoption of a policy of international econ- 
omic collaboration to eliminate the excesses which 
may result from economic nationalism, including 
excessive restriction of imports and the dumping 
of surpluses of national production in world mar- 
kets". Furthermore, the Charter urges the pro- 
motion of a system of private enterpi'ise in pro- 
duction "which has characterized the economic 
development of the American Republics", the en- 
couragement of private enterprise, and the re- 
moval as far as possible of "obstacles which retard 
or discharge economic growth and development". 



^ Bdlletin of Mar. 4, 1945, p. 347. 
» BtJixETiN of Sept. 10, 1944, p. 254. 



The press release of April 3 announcing 
the preparation and distribution of a series 
of pamphlets on basic data about the Dum- 
barton Oaks Proposals was printed in the 
Bulletin of April 1, 1945, page 555, to ac- 
company the printing of the four Foreign 
Afairs Outlines. 



614 



DEPARTMENT OF STATE BULLETIN 



Opposition to Airline Monopolies 

Statement by .\SSISTAM SECRETARY CLAYTON' 



In a letter dated February 22, 1945 addressed 
to the chairman of tliis committee, tlie Department 
of State commented at some length upon Senate 
Bill 326. 

In its letter the Department laid sj^ecial em- 
phasis upon the very important fact that the 
nations which adopted the single-instrument pol- 
icy in international aviation all fell into one of 
three distinct categories: (1) those that had 
adopted a totalitarian form of government, which 
naturally and inevitably lent itself to the opera- 
tion of a chosen instrument; (2) nations which 
desired to connect wide-spread colonial posses- 
sions with the mother country by a government - 
owned airline; (3) small nations whose financial 
resources did not permit them to support more 
than one enterprise and, therefore, as a matter of 
course confined their participation in the interna- 
tional aviation to the operation of one company. 
The United States does not fit into any of these 
groups. On the contrary our country ofl'ers the re- 
verse picture in every particular: 1) it is demo- 
cratic, and our economy is based upon a competi- 
tive system and the encouragement of individual 
initiative; 2) our object is not primarily to con- 
nect the homeland with American territory abroad 
but to carry American passengers ;uid American 
products under our own flag to all parts of the 
world ; 3) we are not prevented by limited finances 
from obtaining the benefits of regulated com- 
petition. 

Furthermore, in considering the history of avia- 
tion in those countries which have adopted the 
single-instrument policy, it is of the utmost im- 
portance to observe that in every instance that 
single-instrument company has been government- 
owned or so much government-controlled as to 
have all the qualities of government ownership, 
with the minor exceptions of Switzerland, Nor- 
way, and Denmark. I think the conclusion is in- 
evitable, therefore, that any airline assured of 
a monopoly of international air transport under 



' Tostifyiiig on S. 326, a Bill To Create the All-American 
Flag Line, On Apr. 2, 1945 before the Aviation Subcom- 
mittee of the Senate Commerce Committee. 



the American flag would, by force of circum- 
stances and following the ample precedents which 
exist, sooner or later conform to this pattern. I 
do not think the American people want Govern- 
ment ownership of the airlines any more than they 
want Government ownership of our merchant 
mai'ine and our railroads. 

A good deal has been said about the amount of 
traffic Mhich will be available in the post-war 
period for division between American and foreign 
airlines. We have heard manj' and varying esti- 
mates. As this is a technical subject not in my 
field, I have not attempted to make an estimate 
of my own, but from what I have heard I am of 
the opinion that an}' effort to forecast at this time 
the probable size of this post-war market is of lit- 
tle value. I believe that our policy should be 
based upon the assumption that there will be a 
tremendous increase in this traffic if facilities to 
handle it are available, and that we should put 
into service as soon as possible the aircraft re- 
quired to handle this traffic, and make full pro- 
vision for rapid expansion to take care of the 
heavy increase which I am confident will develop. 
Any policy, therefore, based upon an assumption 
that the amount of traffic is only such as to justify 
the operation of a limited number of planes to be 
divided among a very limited number of com- 
panies is short-sighted in the extreme. It would 
mean freezing our international aviation policy 
at the very time it should be most flexible. It is 
possible that some of the estimates of traffic and 
the number of airplanes required may prove to be 
reasonably accurate for the initial period, but we 
should not adopt a long-range policy based on 
short-range probabilities. 

It is true that before the war American aviation 
in the international field was developed by a single 
carrier, although even in 1940 the Civil Aero- 
nautics Board, believing competition in this field 
to be in the public interest, certified a second 
American flag line to operate in trans-Atlantic 
service. Previous to that time, development of 
aviation had been in the pioneering stage where 
competitors are not anxious to I'ush in. A policy 
that was suitable for that period would not, in my 



APRIL a, 1945 



615 



opinion, be the proper policy to be continued in the 
period of intensive development and activity 
which we foresee following the war. 

It is true that Pan American Airways nego- 
tiated operating rights in a number of foreign 
nations and colonial possessions; but it should be 
noted that, as soon as Pan American undertook to 
obtain such rights from the nations which were 
themselves interested in operating reciprocal 
services, it was necessary for this Government to 
take over the negotiations and grant reciprocal 
rights in return. The principle is now so gen- 
erally accepted that a nation will not gi-ant oper- 
ating rights without receiving reciprocal rights 
in I'eturn that we must assume the period of direct 
negotiation by operating companies is a thing of 
the past. 

The statement has been made that the proposed 
all-American flag company is not in effect a mo- 
nopoly because it is in reality a community com- 
pany in which all the American airlines which 
wish to do so will be permitted to participate. I 
feel that this would still be a monopoly. The ex- 
clusive right to carry on a certain business consti- 
tutes monopoly, whether or not the ownership is 
vested in one or many stockholders. Analogies 
between the all-American flag company and other 
forms of business such as communications and 
public utilities and the postal service are not valid. 
On the other hand, there does seem to be a close 
analogy between air, rail, and water transporta- 
tion. Where competition is economically feasible 
and in the public interest, I believe it is desirable ; 
and I believe that monopoly should be confined to 
those cases where it is unavoidable. 

It has been suggested that foreign airlines will 
provide all the competition needed to assure 
efficiency of operation, reasonable rates, and tech- 
nical progi-ess. In my opinion, competition with 
foreign airlines is not sufficient to stimulate the 
keen and aggressive development and improve- 
ment of services which would be forced upon an 
American airline by competition from another air- 
line of the same nationality. 

National pride and custom will lead many 
travelers to use the airlines of their own country 
even though they may be less efficient than those 
of another country, and even if their rates are 
somewhat higher. There are many ways in which 
travel is influenced by considerations beyond the 

639429 — 45 4 



purely economic. It is quite possible, therefore, 
that a monopoly can be made to do a substantial 
amount of business without bringing its services 
up to the point of efficiency and public service 
which it would be compelled to reach if faced by 
competition with a line of its own nationality. 
In such cases the traveling public is the loser. 

I think we must frankly recognize the fact that 
we cannot expect to carry all the commerce of the 
world on American wings. I do believe, however, 
that the American carriers will be able to obtain 
a full share of this international traffic, and it 
does not follow that such share should be turned 
over to a monopoly. This is not to say that I 
favor unrestricted competition between American 
carriers on all routes. I am quite prepared to 
leave it to the decision of the Civil Aeronautics 
Board whether more than one carrier is certified 
over any route where it might appear to be un- 
economic to divide the traffic between two or 
more companies; but it does not logically follow 
that this would be the case on every route or that 
one carrier should fly all of the routes throughout 
the world. 

Moreover, I believe that the danger of private 
deals with foreign flag operators which might be 
favorable to the carriers but detrimental to our 
general national interest will be much greater if 
we are represented in this world-wide field by 
one monopoly company than if we are represented 
by several competitive lines. 

Other nations are proceeding rapidly with their 
post-war plans for international aviation. I 
therefore feel that we should inaugurate opera- 
tions as soon as possible over the routes which 
this Government wishes to see established. I be- 
lieve that we should do so in accordance with the 
present law and not through changing that law 
so as to provide for a single company nor by a 
return to the old method of bilateral arrange- 
ments, which would inevitably result in such con- 
fusion and delay as to cast grave doubt upon the 
successful consummation of our objectives. I do 
not believe that the American people will be satis- 
fied if they see progress being made in a solution 
of almost all other post-war problems while those 
relating to our great and special interest in inter- 
national air transportation are held in abeyance. 



616 



DEPARTMENT OF STATE BULLETIN 



Planning for World Monetary Stability 

The International Economic Background 



Addrets by EDWARD S. MASON' 



[Relensed to the press April 4] 

Those who have been thinking seriously in re- 
cent months nbout world economic reconstruction 
are not inclined to unrestrained optimism. They 
see on one hand an array of problems of enor- 
mous — perhaps unprecedented — complexity and 
on the other a series of obstacles to effective action 
which entail the danger that we shall do too little 
too late. They warn that we shall be too easily dis- 
couraged unless we are prepared to make progress 
by inches and to accept occasional reverses. 

Most of us probably share this predisposition in 
greater or lesser degree. There is, however, an- 
other face to the picture which gives groimd for 
more hopeful expectations. We may take courage 
from the fact that our position today is stronger 
than that of the peacemakers of 25 years ago in 
several important respects. We today are acutely 
aware, as our predecessors were not, of the neces- 
sity of providing a firm economic base for the 
political peace. We have the advantage, more- 
over, of the costly but precious experience of these 
25 years, hardly one of which does not yield les- 
sons which are relevant to the problems we face 
now. Most important, however, is the striking 
popular unanimity on the proposition that victory 
will not giu\rantee lasting peace and prosperity 
but will only win us the right to work for these 
goals. 

The yearning for peace and the desire for eco- 
nomic well-being are the two most powerful forces 
which will shape the post-war world. The 
strength and universality of these ideas are rooted 
in the two central events of recent years— the 
greatest depression in modern times and the gi-eat- 
est war in history. Against this baclcground it 
should occasion no surprise that proposals for the 
post-war reform of this or that, which are not 
directly and immediately related to these primary 
goals, should meet with popular inattention or 
impatience. It follows that programs which will 

'Delivered before the Academy of Political Science in 
New York, N. Y., on Apr. i, 194.5. Mr. Mason is Deputy 
to the Assistant Secretary of State for Economic Affairs. 



in fact contribute to the achievement of these 
goals must be presented and advocated in terms 
which make this relationship clear. 

If it has been difficult to attract a wide audience 
for proposals in the field of international financial 
and commercial policy, it is because these matters 
are complicated, technical, and certainly not dra- 
matic. The disposition to leave these matters to 
the experts reflects the view that they are probably 
not very important, and presages apathy over 
their fate. If a convincing case can be made out 
that either peace or prosperity or both are depend- 
ent on the proper solution of this range of prob- 
lems, then a hearing must be secured. 

Peace and plenty are not synonymous terms. 
Nations have gone to war in periods of relative 
economic well-being, and peace has been preserved 
in times of general economic distress. Tliere are 
few today, however, who would question seriously 
the necessity of creating healthy economic con- 
ditions as a bulwark to the preservation of peace. 
If the fact were not clear enough before, the tur- 
moil of the pre-war years affords ample evidence 
that economic distress is a fertile breeding ground 
for political upheaval, which is as likely as not to 
take the form of military adventure. Poverty and 
hunger invite demagogues to trade on the misery 
of the people and to permit them to capitalize 
on the simple and widely perceived relationship 
between the military budget and the level of em- 
ployment. It is no longer a secret to the man in 
the street that any industrial nation can generate 
boom conditions by launching a vast armaments 
program. There is hardly a more portentous omen 
for the building of the peace than the popular per- 
ception of this truth. Never was the danger 
greater that, if other means fail, military expendi- 
tures will become the principal instrument for the 
achievement of prosperity. 

Flourishing word trade is essential to the eco- 
nomic well-being of all nations. At one time, it 
would not have been necessary to defend this as- 
sertion. Today, however, many of us have become 
so exclusively concerned with the problem of find- 



APRIL 8, 1945 

ing a job for every worker that we slip into the 
error of equating economic well-being with nu- 
merical full employment and tend to neglect the 
i fact that numerical full employment is also com- 
( patible with a relatively low standard of living. 
. If our only purpose is to keep everybody busy, 
we need not give much attention to the interna- 
tional exchange of goods. Any nation which is 
willing to place its economic system in a straight- 
jacket and run it on the command principle can 
assure numerical full emj^loyment independently 
of the volume of exports or imports. For many 
countries, however, numerical full employment in 
an atmosphere of stagnant world trade would 
mean dire distress. The British cannot eat their 
woolens, nor can the Chileans wear their copper. 
We tend to give less attention than do most other 
countries to the real-income aspect of the employ- 
ment problem and to the function of international 
trade in maximizing real income, because the great 
diversity of our natural resources and productive 
facilities is assurance that our economic well-be- 
ing would suffer least from a contraction of world 
trade. But suffer it would. We perhaps can 
live alone, but we wouldn't live as well as we 
might, and we certainly wouldn't like it. We 
would dislike particularly the detailed govern- 
ment controls and regulation of economic life 
which would be involved in any attempt at full 
employment in a self-sufficient economy. 

The fact is that no nation can neglect interna- 
tional ti"ade without jeopardizing the material 
well-being of its people. In a great many coun- 
tries — and no country is so small or unimportant 
that it cannot endanger the preservation of 
peace — the volume of international trade is the 
major determinant of living standards. The eco- 
nomic conditions which best serve the interests 
of peace entail not only that every worker shall 
have a job, but also that he shall be permitted to 
produce the goods which he can make most effi- 
ciently, and to exchange them for the goods he 
most desires. 

The distinction between numerical full em- 
ployment — or just keeping busy — and productive 
employment — or working with maximum effi- 
ciency — is especially useful in an approach to the 
international monetary problem. The traditional 
self-regulating gold standard, associated as it was 
with a relatively free multilateral trading system, 
was oriented toward the achievement of produc- 



617 

tive employment. In the context of modern eco- 
nomic organization, however, the self-regulating 
gold standard is widely criticized — and justly so- 
on the grounds that its adoption would prejudice 
the achievement of numerical full employment. 
On the other hand, the world monetary system, if 
it can be called a system, which arose in the 1930's, 
tended to impair the productivity of employment 
by focusing principally on the objective of achiev- 
ing numerical full employment. 

The gold standard, in imposing an iron stability 
on exchange rates, required that basic adjust- 
ments to changed circumstances of world trade be 
accomplished by alterations in the levels of internal 
prices and wages. In the modern industrial econ- 
omy, however, easy flexibility in prices and wages 
simply does not exist. In these circumstances, 
forces set in motion within the framework of the 
gold standai'd, since they cannot yield their results 
via prices and wages, tend instead to produce idle 
plants and idle workers. 

The monetary chaos of the 1930's, however, re- 
sulted from a wide variety of national policies de- 
signed to stimulate high-level numerical employ- 
ment at the cost of impairing the productivity of 
economic endeavor. The substitution of a bilateral 
system of payments for a multilateral system 
meant in effect that importers were forbidden to 
buy in the cheapest market, and exporters to sell 
in the dearest. It is now clear that the unilateral 
monetary devices used to encourage high numerical 
employment largely canceled each other out. Com- 
petitive exchange depreciation as a means of ex- 
porting unemployment to foreign countries was 
shown to be ineffectual when foreign countries 
promptly adopted retaliatory measures. 

The world will not accept a return to the gold 
standard because the nations are unwilling to 
sacrifice their domestic economic objectives to rigid 
exchange stability. At the same time the nations 
have learned from the bitter experiences of the 
1930's that the turbulent monetary policies char- 
acteristic of this period were self-defeating and 
are not capable of achieving the maximization of 
economic well-being. 

The proposed International Monetary Fund is 
a mechanism which, if properly implemented and 
supported by international action in related fields, 
is capable of providing both a stimulus to numeri- 
cal full employment and a stimulus to productive 
employment. It would be folly to claim that the 



618 



DEPARTMENT OF STATE BULLETIN 



Fund is of itself capable of assuring high stable 
levels of employment. It can, however, make a 
substantial contribution to the achievement of this 
goal. The Fund provides a mechanism to facilitate 
the correction of basic maladjustments by the ex- 
pansion rather than the contraction of trade. In 
the 1930's a country which faced a deficit in its 
balance of payments typically endeavored to re- 
duce its imports. Under the procedures contem- 
plated by the Fund, it is at least more likely that 
corrective measures will be taken by surplus coun- 
tries as well. Such measures, since they would 
involve the increase of imports by the surplus coun- 
tries, would constitute correctives of an expan- 
sionist character. Moreover, by providing an 
emergency reservoir of foi'eign exchange for use 
when balance-of-23ayments difficulties arise, the 
Fund should reduce the danger that cycles of de- 
flation may be launched in some countries and 
spread to others because of deflationary measures 
undertaken to protect falling reserves of gold and 
foreign exchange. It can also be claimed for the 
Fund that the realization of relatively stable ex- 
change rates and the achievement of free intercon- 
vertibility of currencies will encourage a sub- 
stantially higher volume of international invest- 
ment than would otherwise take place. Increased 
investment, of course, is a source of added employ- 
ment both in the lending and borrowing countries. 

The Fund is of major importance, moreover, as 
a mechanism for increasing the international flow 
of goods, or, to state the same thing in another way, 
the productivity of emplojnnent. Kelatively stable 
exchanges are a strong impetus to the international 
movement of goods, for such stability would re- 
move much of the riskiness from transactions 
across national borders. Moreover, by working 
toward the elimination of exchange controls, the 
Fund seeks to reduce the barriers to trade which 
are entailed in the transfer problem. Free inter- 
convertibility of currencies means that exporters 
can be paid in money they can use, rather than in 
blocked credits in foreign banks. 

However, although the Fund may provide an 
international monetary framework which will 
stimulate a high level of emploj^ment and more 
productive employment, it is emphatically not 
sufficient unto itself for the full achievement of 
these ends. If it were left unprotected to weather 
the storms of transition from war to peace, or to 
absorb the economic maladjustments which ex- 
isted before the war and which have been intensi- 



fied by the war, the effectiveness of the Fund 
would be seriously impaired. Many of the ills 
which characterize the world economy are not 
monetary in nature and are not subject to mon- 
etary therapeutics. It cannot be reiterated too 
often that the Fund is incapable of performing 
miracles in the way of world economic recon- 
struction. 

Looting and physical devastation have robbed 
the countries of western Europe of much of their 
productive resources. The needs of reconstruc- 
tion will produce a great demand for imports at a 
time when these countries are incapable of pro- 
ducing large exports to finance their import pro- 
grams. Foreign holdings of gold and dollars are 
in the aggregate large. Unfortunately, however, 
these holdings are unevenly distributed among 
foreign countries, and the countries whose needs 
are greatest do not hold gold and dollars in 
sufficient volume. 

If the Fund had to bear the brunt of these trade 
deficits, its holdings of dollars and other strong 
currencies might be dissipated in the transition 
period before the operation of longer-run correc- 
tive forces could come into play. Fortunately, 
however, this threat was clearly foreseen and met 
in advance. The articles of the Fund wisely pro- 
vide that the facilities of the Fund shall not be 
used for purposes of relief or reconstruction. It 
is anticipated that the trade deficits arising out of 
reconstruction imports will be met in part by in- 
ternational credits, private and public, guaran- 
teed by the proposed International Bank for 
Reconstruction and Development. If the Bank's 
facilities are not adequate, other sources of credit — 
such, for example, as an expanded Export-Im- 
port Bank — may have to be provided. Thus, so 
far as reconstruction problems are concerned, the 
Bank and other sources of long-term credit are 
the strong right arm and shield of the Monetary 
Fund. At the same time, the Fund would itself 
provide encouragement and assurance to private 
capital seeking investment abroad and would thus 
make possible a fuller realization of the poten- 
tialities of the Bank. The sum total of what the 
Fund and Bank can achieve together is greater 
than their separate contributions. 

Although the Fund appears to be sufficiently 
insulated against the dangers of reconstruction 
deficits, there are yet other and deeper-lying 
maladjustments, inherited in aggravated form 
from the pre-war period, which may strain the 



APRIL a, 1945 



619 



facilities of the Fund if adequate supplementary 
measures are not adopted. Of these maladjust- 
ments, the case of Great Britain is illustrative 
and most important.^ 

Great Britain is irrevocably committed to a 
high degree of economic interdependence with the 
rest of the world. She must have imported food 
and raw materials to live. Even before the out- 
break of war, however, she was having difficulty 
in financing the requisite volume of necessary im- 
ports. The jungle growth in the 1930's of tariffs, 
quotas, licenses, exchange controls, and bilateral 
agreements limited the outlets for British exports 
and intensified Britain's difficulties in obtaining 
the foreign exchange necessary to balance her 
international accounts. She herself was forced to 
a variety of expedients to restrict imports and 
force exports in order to stabilize her situation. 

Britain's position will be considerably weaker 
in the post-war period. Before the war she had 
a large unfavorable balance of trade. Her aver- 
age annual imports in the period 1936-38 came 
to 950,000,000 pounds, against exports of 560,000,- 
000 pounds. About half of this unfavorable bal- 
ance of nearly 400,000,000 pounds was financed by 
income from foreign investments, while another 
quarter was financed by shipping income. During 
the war, however, she has been forced to liquidate 
so many of her overseas investments that her post- 
war income from this source will be hardly more 
than half the pre-war figure. Her shipping in- 
come will also be gravely curtailed, for much of 
her merchant fleet has been lost to enemy action, 
and she faces the prospect of keen post-war ship- 
ping competition from the United States. 

Moreover, there have been built up in London 
during the war blocked sterling balances which 
may aggregate 3 billion pounds at the close of 
the war. If these balances are funded, as appears 
possible, the servicing of these additional debts 
may offset a large part of Britain's remaining in- 
come from foreign investments. In the light of 
these facts, Britain's balance-of-payments plight 
can be characterized only as critical. 

The Fund will not solve Britain's dilemma nor 
will the Fund and the Bank together, for Brit- 
ain's problem has implications which go far be- 
yond the monetary and financial field. The two 
central forces capable of easing Britain's plight 
are, first, general and sustained world pros- 
perity, and particularly prosperity in the United 



States; and second, a general and substantial re- 
duction in the barriers to world trade. Both of 
these forces would operate powerfully to provide 
expanded export opportunities for Britain, whose 
abandonment of exchange controls at an early 
date, in accordance with the purposes of the Fund, 
would thus be facilitated. The British example 
is the leading case, but it is not unique. It high- 
lights the fact that the full success of the Fund 
is dependent on the creation of a healthy economic 
environment. 

The United States must play the central role 
in this work of world economic reconstruction. 
"We shall almost certainly become the greatest 
creditor nation; we are the largest exporter and 
the second largest importer. We own the bulk 
of the world's stock of gold. Our industry, which 
has gained enormously in size and technical skill 
during the war, is capable of becoming the prime 
mover in the world's economic i-econstruction. We 
may play our role for good or for ill; but 
play it we must. If tariffs and other barriers to 
world trade are to be lowered; if nationalistic 
trade practices are to be prescribed; if a modus 
Vivendi is to be worked out to govern the rela- 
tions between state trading monopolies and pri- 
vate traders; if the problems of chronic com- 
modity surpluses are to be handled cooperatively ; 
and if the restrictive practices of international 
cartels are to be eliminated, the United States 
must not only cooperate with other nations to 
these ends but must take the leadership in pro- 
moting their attainment. 

These are the broad categories of international 
collaboration in which action is necessary to the 
complete achievement of the purposes of the Bret- 
ton Woods agreements. If Bretton Woods were 
to be the end as well as the beginning of inter- 
national economic collaboration, it could not vin- 
dicate the ambitious hopes of its founders. The 
Fund cannot alone solve the problems of an eco- 
nomic world as chaotic and unbalanced as the 
post-war world is obviously going to be. It is not, 
however, expected to stand alone. It is envisaged 
as an integral part of a structure which will em- 
brace other broad aspects of world economic co- 
oiDcration. 

Unfortunately, some of the opponents of the 
Bretton Woods proposals would have us believe 



' See BuixETiN of Mar. 25, 1945, p. 501. 



620 



DEPARTMENT OF STATE BULLETIN 



that we should cease our efforts to secure the 
prompt establishment of the Fund until agreement 
is obtained on these other vitally necessary aspects 
of international economic cooperation. Such a 
course would, in my opinion, be unwise. In the 
first place, agreement on and adoption of the Bret- 
ton Woods proposals will pave the way for secur- 
ing agreement on other effective measures of eco- 
nomic cooperation. In the second place, prompt 
implementation of the Bretton Woods proposals 



should bring with it immediate benefits which 
will make a substantial contribution to post-war 
economic order, even though they are not a pana- 
cea for all our ills. For us to hesitate now will 
be to increase and prolong the uncertainty as to 
the role of the United States in the post-war 
world. Without Bretton Woods the prospects of 
a broad program of world economic collaboration 
for peace and plenty in our time would be dim 
indeed. 



The American Farmer's Stake in World 

Cooperation 

INTERVIEW WITH ASSISTANT SECRETARY CLAYTON* 



[Released to the press April 7] 

Worcester : In just two and a half weeks, what 
may turn out to be one of the most important 
events in history is scheduled to open in San Fran- 
cisco — the United Nations Conference on Inter- 
national Organization. We hope this will be a 
major victory in the long struggle for a lasting 
world peace. 

Because of the very great importance of this 
Conference to every single person in the world, 
a portion of each "Country Journal" broadcast in 
the next few weeks will be devoted to a discus- 
sion of such aspects of world planning and co- 
operation that particularly affect the American 
farmer and Ms family. 

Today it's a real honor to have as our guest in 
the first of this series of discussions William L. 
Clayton, Assistant Secretai-y of State for Eco- 
nomic Affairs. He'll outline the main highlights 
of the American farmer's stake in world coopera- 
tion. Subsequent discussions will take up in closer 
detail different phases of this main topic. 

Mr. Clayton, what can farm people hope to gain 
from international planning and cooperation? 

Clayton: Well, I'm sure the hopes of every 
American farm family are the same as the hopes of 
all the other people in this country and everj'where 
in the world. We want peace and prosperity. 

We want a lasting peace — not just a few years 
of quiet between wai"s. And we want a lusting 
prosperity — not just a few years of good times 
between depressions. 

1 Broadcast over the Columbia Broadcasting System 
Apr. 7, 194.5. Mr. Worcester is Director of Agricultural 
Problems for the Columbia Broadcasting System. 



Worcester : Seems to me peace and prosperity 
are sort of dependent upon each other. 

Clatton : They're inseparable ! You can't have 
lasting world peace without an expanding world 
economy with increased production and consump- 
tion, and rising levels of living for all peoples 
everywhere. 

And you certainly can't have world prosperity 
when nations are spending most of their time and 
energy fighting each other. 

Worcester: Is there any single answer to the 
question, How can we attain peace and prosperity? 

Clayton: The answer is simple — world coop- 
eration. Putting that answer into practice, of 
course, calls for careful international discussion 
and collaboration. But it is a fact that our success 
in securing peace and prosperity depends chiefly 
on that one word — cooperation. In the world we 
live in today, it is impossible for any nation to 
sit in its own little corner and live as it pleases. 
If we want real security, lasting peace, and sound 
prosperity, we must take our place and meet our 
I'esponsibilities in world politics, trade, finance, de- 
velopment, and all other activities with which the 
modern world is concerned. 

Worcester : From a business standpoint, where 
does the farmer fit into this picture of world 
cooperation ? 

Clayton : He sits right in the middle of the pic- 
ture. I hope that's putting it strongly enough. 
Active world trade is the kej' to the farmer's 
prosperity. 

This war has made it clear that American agri- 
culture has tremendous productive capacity. We 
can use a lot of food here at home, but we can raise 



APRIL 8, 1945 



621 



still more. In peacetime, several important farm 
crops such as cotton, wheat, pork, and tobacco 
must have export markets for their surplus pro- 
duction. The home market, on the other hand, 
normally takes practically all the production of 
some other kinds of farming such as dairying, beef 
cattle, wool, and fresh vegetables. But these 
branches of farming are also vitally interested in 
export markets because every automobile, every 
washing machine, and every other sort of product 
American industry can make and export mean 
more jobs at home — more people to buy food and 
better markets at home for the farmer. 

Worcester: Of course, exports are one side of 
world trade, and I'm sure nobody's foolish enough 
to hope we can sell more than we buy on the world 
market like we did after the last war. 

Clayton : Of course, if we export we mitst im- 
port. Other nations can only get the dollars with 
which to buy our farm and industrial exports by 
selling their goods and services to us. And natu- 
rally such imports will be goods that our farm and 
city people want and that can be made more effi- 
ciently in other countries. That's the beauty of 
active world trade — we make the things we can 
produce most efficiently and sell what we can't 
use to the rest of the world. Other nations make 
what they can produce most efficiently and sell to 
us. The result is a higher standard of living for 
all peoples everywhere. 

Worcester : Seems to me though, whenever im- 
ports are mentioned, the old bugaboo of foreign 
competition comes up. Is that likely to bother the 
farmer ? 

Clayton: Foreign competition is an old argu- 
ment used to build and maintain tariffs. Some 
people used to think that tariffs helped keep wages 
high and helped to promote prosperity generally. 
But it's gradually being realized that tariffs pro- 
vide a false sense of protection. They put a 
damper on world trade and thus make it diffi- 
cult or impossible for other countries to buy our 
goods. When they do this they are cutting down 
our exports and the American jobs and buying 
power that depend on exports. 

Worcester : The history of the reciprocal trade 
agreements has made that clear, I believe. 

Clayton: That's right. In the past 10 years 
while the trade agreements have been gradually 
cutting down tariff barriers, American farmers 
have been receiving steadily better incomes. Their 
home markets and most of their export markets 



have improved and they have not suffered from 
so-called foreign competition. 

I'd just like to add that expanded world trade 
in all commodities is truly a great help to agri- 
culture as it is to other industries. Tariffs and 
other trade barriers, far from protecting the prices 
of crops of which we have a surplus, actually act 
to depress such prices. This is true because tariffs 
make it more difficult for our foreign customers 
to sell their goods to us and, to that extent, curtail 
I heir buying power for our surpluses and thus 
cause these surpluses to weigh more heavily on the 
market. Lower tariffs all around the world not 
only make bigger and better markets at home and 
abroad for American farmers but they also make 
available to farmers as consumers, at more reason- 
able cost, things they need from abroad. 

Worcester: Sounds to me like farm people 
have a mighty hig stake in world cooperation. 

Clayton : They really do. And they have one 
of the biggest responsibilities in helping to build 
lasting peace and prosperity. We must never 
forget that people who are well fed, well clothed, 
and well housed are peace-loving people. World 
cooperation in the exchange of the products of 
the world — both of industry and agriculture — is 
sure to raise the levels of living everywhere in 
the woi'ld and set the stage for permanent peace 
and prosperity. 

Worcester: Thank you, Mr. Clayton. Our 
guest has been William L. Clayton, Assistant Sec- 
retary of State. This is the first of a series of 
"Country Journal" discussions on the "Farmer's 
Stake in World Cooperation." 

Marine Transportation 
And Litigation 

Australia 

An agreement between the United States and 
Australia regarding certain problems of marine 
transportation and litigation was signed at Can- 
berra March 8, 1945 by Mr. Nelson Trusler John- 
son, American Minister to Australia, and Dr. Her- 
bert Vere Evatt, Australian Minister for External 
Affairs. The agreement is similar to an agree- 
ment between the United States and the United 
Kingdom on the same subject which was signed 
at London December 4, 1942.^ 

' Executive Agreement Series 282 and Bulletin of Jan. 
9, 1943, p. 28, 



622 



DEPARTMENT OF STATE BULLETIN 



Tribute to Sol Bloom 

Address by the SECRETARY OF STATE' 



[Released to the press April 6) 

As long ago as July 1943, an American states- 
man said : "Only a lasting peace as well as a just 
peace will now satisfy the United States and the 
world". And he added, prophetically, '"If we are 
willing to shed our blood and pour out the Na- 
tion's wealth to achieve a just peace, we certainly 
are willing to cooperate with other free peoples 
to make it a lasting peace. We are not fighting for 
a 25-year peace, no matter how just it might be. 
We do not intend to have our boys killed in an- 
other war." 

I quote these words to you as just one example 
of the clear thinking, the far-sighted thinking, of 
the man who is our guest of honor tonight — Sol 
Bloom. 

Sol Bloom is a man of varied interests and 
strong enthusiasms. He has tasted the romance 
of America. He knows its history, and he knows 
its people. Human causes attract him irresistibly. 
He is, in fact, a great democrat — with a small as 
well as a capital D. The record of his public serv- 
ices is long and distinguished. 

But I think that nowhere have his qualities of 
mind and heart been of greater service to his 
country than in the Congress itself. As Chairman 
of the Foreign Affairs Committee of the House of 
Representatives during the past six years — among 
the most critical years of our history — it has been 
his responsibility to lay before his committee, be- 
fore the House, and eventually before the Nation 
itself great questions of foreign policy for debate 
and decision. On all these great controversial 
questions, the issues were always clear in Sol 
Bloom's mind. The decisions for which he fought 
were right — as time has so abundantly demon- 
strated. Nevertheless, being the great democrat — 
small d — that he is, Sol Bloom saw to it that all 
points of view weje never denied a fair and a full 
hearing. 

He has not overlooked the importance of an in- 
formed public opinion, and the deliberations in 

' Delivered at a meeting in honor of Congressman Sol 
Bloom under the auspices of the American Labor Party, 
New York County Committee, at New York, N. Y., on 
Apr. 6, 1945. 



his committee room and on the floor of the House 
have helped millions of our citizens who were 
puzzled or in doubt to clarify their own thinking 
and better understand the great issues of these 
times in the field of our foreign relations. Let me 
give you just one classic example — the debates on 
the Lend-Lease Act in January and February of 
1941. 

We sometimes forget how deeply the Nation was 
divided on the issue of lend-lease, how many sincere 
and thoughtful people were still unconvinced that 
the Axis had aggressive designs on lis. For weeks 
the eyes and ears of the Nation were riveted on the 
committee room where Sol Bloom presided while 
scores of witnesses from every walk of life had 
their say. Patiently the committee listened and 
asked questions. All over the country people were 
listening and asking questions too. Americans 
stationed thousands of miles from home followed 
tlie hearings closely, knowing full well that our 
Nation stood at a crossroads in its history. 

When H.R. 1776 finally reached the floor of the 
House on February 3. so clearly had the issues 
already been defined, that it was debated for only 
five days. It is not generally known, I think, that 
on each of these days Sol Bloom and his colleagues 
of the committee met before the debate started 
to arm themselves with facts and figures, and to 
anticipate and discuss questions which might arise 
on the floor. As a result, the debate was a model of 
precision and clarity. Facts won the day — facts 
diligently amassed, accurately and convincingly 
presented by Sol Bloom and his colleagues. 

There you have an example of practical and re- 
sponsible leadership. There you have one clue to 
liis statesmanship, which has exerted such a pro- 
found effect on the course of legislation in the past 
six j'ears. I think it may be said that at no 
period in our history has the House of Repre- 
sentatives played a more useful or influential role 
in the formation of our foreign policy. 

It is, therefore, eminently fitting, from my point 
of view as Secretary of State, that you are doing 
honor to Sol Bloom. It is also wise in my judg- 
ment that Sol Bloom and his distinguished col- 
league from New Jersey, Representative Charles 



APRIL 8, 1945 



623 



Eaton, the ranking minority member of the For- 
eign Affairs Committee, have been selected to go 
to San Francisco as Delegates to the United 
Nations Conference. We have good reason to re- 
joice that Sol Bloom is to have a hand in writing 
the charter of a world organization to maintain 
the lasting peace for which he has fought and 
worked so well and so long. 

It is also a source of great satisfaction to me 
that the Congress of the United States is to be so 
fully represented at San Francisco. Not only will 
Sol Bloom and Charles Eaton be there a? mem- 
bers of the House, but two distinguished Sen- 
ators — Tom Connally of Texas and Arthur H. 
Vandenberg of Michigan — will also be in the 
United States Delegation. Half of the members 
of the Delegation will be members of Congress. 

The executive and legislative branches of our 
government are thus brought into close cooper- 
ation in the great task of laying the foundation so 
ardently desired by all our people. 

The very active role to be taken bj' Senators 
and Representatives in the forthcoming Confer- 
ence is a good omen. As Administrator of the 
lend-lease pi-ogram and in my present position. I 
have had many associations with members of Con- 
gress during these last critical years. I have 
found them deeply conscious of the great respon- 
sibilities which the United States carries in the 
shaping of an orderly and peaceful world. And 
I know, too, that from the members of Congress, 
Americans in all sections of the country obtain 
much of their information on the issues of the day. 

So I am glad when members of the Senate and 
House are able to undertake additional respon- 
sibilities in the solution of these issues. During 
the conference of American republics at Mexico 
City, it was invaluable to have at our side as ad- 
visers, Senator Tom Connally of Texas. Senator 
Warren R. Austin of Vermont, and Representa- 
tives Edith Nourse Rogers of Massachusetts and 
Luther Johnson of Texas. Recently the President 
sent on a special mission to China Congressman 
Mike Mansfield, who once had served in the Orient 
in the United States Marines. And I think it is a 
good thing that so many members of Congress 
have visited the fighting fronts and seen for them- 
selves what it has meant in effort and sacrifice and 



' BtTLi-ETiN of Mar. 4, 1945, p. 333. 
639429 — 45 5 



suffering to win one more chance to establish 
secure peace in the world. 

Men like Congressman Bloom of New York, 
Senator Connallj' of Texas, and Congressman 
Mansfield of Montana bring to us in the State 
Department views and opinions which are of in- 
valuable assistance in the conduct of our foreign 
relations and in gauging public opinion. And we, 
in turn, know that they also bring to their col- 
leagues in Congress fuller understanding of the 
pioblems and efforts of the executive branch of the 
Government. 

You of labor are honoring Sol Bloom tonight. 
I can think of no economic group with a greater 
stake in the sort of world which Sol Bloom and 
the rest of us hope to make possible by the delibera- 
tions at San Francisco. Millions of men from the 
ranks of labor are fighting on the battlefields. 
War exacts from the working people of the world 
a terrible price. War retards that social progress 
and that wider opportunity and security which 
labor seeks. 

A major task of the world Organization will be 
the establisliment of those economic and social 
conditions which make for peace. Economic rival- 
ries, poverty, and oppression breed wars. Eco- 
nomic security, rising standards of living, and 
freedom are the climate of peace. They represent 
the aspiration of working people all over the 
world. 

Speaking to the first session of the inter- Ameri- 
can conference at Mexico City in February, I said, 
"The United States intends to propose and sup- 
port measures for closer cooperation among us 
(the American republics) in public health, nu- 
trition and food supply, labor education, science, 
freedom of information, transportation, and in 
economic development, including industrializa- 
tion and the modernization of agriculture".' That 
represents our policy, not only in our relations 
with the other American republics, but with the 
rest of the world. 

These are objectives in which labor has a funda- 
mental interest. They can be attained, both in 
this country and in other countries, only in a world 
secure from war and the constant and eroding fear 
of war. 

The very fact that success of San Francisco is 
necessary to the future of all nations is itself the 
(Continued on page G56) 



624 

when this one [war] finally drags 
its bloody and destructive course to a 
conclusion it will open up to all of us 
an untried and an unUnown road on 
which we must travel, in converting Irom 
a war economy to a peace economy. 
Despite the hardships, the risks, and tiie 
dangers which this journey may involve, 
there is no way to avoid traveling that 
road Every consideration of enlight- 
ened self-inlerest, every circumstance 
and condition which have brought and 
held us together throughout this war dic- 
tate that you and we should travel that 
road together. 

THE ABOVE QUOTATION is froin the statement 
in which Assistant Secretary of State William 
L. Clayton set forth the position of the United 
States Delegation on a number of the most im- 
portant economic questions which were to come 
before the Inter-American Conference on Prob- 
lems of War and Peace.= The st^itement was read 
on February 27 in the Hall of the Viceroys of 
Chapultepec Castle before an audience consisting 
of the two economic conmiissions of the Confer- 
ence. The remark that "ycu and we should travel 
that road together" characterized not only the 
attitude of the American Delegation at the Con- 
ference, but also the results of the Conference, 
which showed clearly that all the delegations 
realized fully the importance and necessity of 
close inter-American cooperation to solve the 
economic problems of the transition and post-war 
periods. It was that attitude of cooperation which 
enabled the Conference to reach mutually satis- 
factory underetandings on a number of difficult 
economic problems. 

More than 50 economic and social ' proposals 
were introduced at the Conference by the various 
delegations. These proposals were referred either 
to Commission IV, which dealt with long-range 
economic questions, or to Commission V, which 
handled economic problems of the war and tran- 
sition periods. Various ones of the proposals re- 

* Mr. Smith Is A^lstant Chief, Division of Commercial 
Policy, Office of International Trade Policy, Department 
of State, and was a Technical Officer in the United States 
Delegation at the Inter-American Conference on Prob- 
lems of War and Peace. 

'The full text of Mr. Clayton's statement appeared In 
the BULLBTIN of Mar. 4, 1945, p. 334. 

' The social questions discussed at the Conference will 
be the subject of a subsequent article in the BtjLi.F.TiN. 



Economic Aspects of t| jlexico City Conference 



fleeted differing points of view as presented bv tl 
several delegations; many of the proposals „ 
similar in substance, and it was often possibl T 
consolidate those. It is a tribute to the frank d' " 



,.^ ...w.,.. ..V ... „ ...>juvc lu uie trunk dis 
cussions of the problems of each country and 
the spirit of give and take in the commission 
meetings that the Conference was able finally t 
reach agreement upon 17 economic resolutions 
to wliich no delegation found it necessary to entei' 
reservations. 



Work of Commission V 

Proposals relating to some of the most difficult 
and important problems before the Conference 
were referred to Commission V on Economic 
Problems of the War and Transition. Outstand- 
ing among these problems was that of the effect 
of the termination of war procurement contracts 
on the economies of the American republics. On 
that question the delegates of many of the Latin 
American countries freely expressed tlieir grave 
fears that such termination, unless quickly fol- 
lowed by a strong demand through commercial 
channels, would result in serious economic, politi- 
cal, and social disturbances. To meet this antici- 
pated situation a variety of proposals were intro- 
duced, including continuance of government pur- 
chase of strategic materials during the transition 
period until post-war commercial demand revived 
and the creation of a hemisphere corporation to 
buy, hold, and sell surplus production. The point 
of "view of the United States Delegation on this 
subject was summarized by Assistant Secretary 
Clayton in his statement : 

"We will continue as in the past to give appro- 
priate notice of the cuitailment or termination of 
procurement contracts. We will confer freely 
with you regarding such reductions and the neces- 
sary adjustments which they will involve. We 
will consider and cooperate with you in meas- 
ures designed to effect these adjustments with the 
least possible shock to your economy. We rec- 
ognize our responsibility in this field, and ^"^ 
pose to meet it, consistent with our laws, our pu 
lie opinion, and a due regard for our own ec 
omy." 



On the more specific point of stockpiling surplus 
duction until commercial demand i.s revived, 
''fler war needs have subsided, Mr. Clayton was 
equally clear: 

"Encouragement of production through stock- 
pilin" of materials for which there is no current 
or early prospective market is in any case a very 
dangerous procedure for the producers of such 
materials." 

The resolution which finally emerged on this 
subject after several days of intensive discussion 
and drafting, and which appeared as resolution 
XXI in the Final Act, provided in substance that, 
if contract curtailment were likely to have a seri- 
ous effect on the economic stability of the coun- 
tries producing raw materials, bilateral arrange- 
ments should be worked out between the purchas- 
ini' and supplying countries to minimize adverse 
consequences. These arrangements might include 
orderly adjustment of contracts or other methods, 
appropriate legislation to be sought where re- 
quired to carry out the purposes of the resolution, 
in consonance with the fundamental needs of the 
economies of both the exporting and importing 
countries. 

Availability of Capital Equipment 

Considerable interest was expressed by various 
delegations in the possibility of obtaining capital 
equipment from the United States in the inmie- 
diate post-war period for the development of new 
industries and for replacements of machinery 
Worn out during the war years. Several pro- 
posals were introduced on the subject that were 
aimed at assuring that the United States would 
supply as much of this equipment as possible to 
tlie other American republics. While noting that 
the problem of meeting all demands for capital 
equipment would be a diHicult one, which would 
also exist acutely in the United States, Assistant 
Secretary Clayton at the same time indicated 
that every effort would be made to see that the 
American republics were treated in an equitable 
manner. His statement on February 27 included 
the f oUowing remarks on this subject : 



625 

"With reference to the availability in the United 
States of the capital goods, tools, machinery, and 
e(|uipment which you require in implementing your 
post-war policy of economic development, it must 
be admitted right off that we face here an ex- 
tremely difficult problem. 

•'Slay I add that we in the United States have 
also had to do without equipment, tools, and ma- 
chinery unless their need or use were directly re- 
lated to the war. In consequence many of our 
plants which have been operating 24 hours daily 
are badly in need of repairs and new equipment 
For some years now new construction of all kinds 
has been denied unless it had to do with the war. 

"So long as the existing controls which have 
been set up in the United States continue, we have 
the means at hand for an equitable allocation of 
our production, and it is the intention to continue 
to make use of such means to see that you obtain 
a fair share of such production. Meantime, we 
wiU carefully investigate other methods of as- 
suring you of a fair proportion of our capital 
goods when our present governmental controls 
expire." 

Conference action on the subject, in resolution 
XVI in the Final Act on "Renewal of Capital 
Equipment", provided that such equipment should 
be made available to the American nations "on a 
fair and equitable basis and within the limitations 
of the control mechanisms existing at the time". 

Price Controls 

The question of price controls, particularly 
United States ceiling prices on commodities pro- 
duced in the other American republics, was the 
subject of considerable discussion and debate in 
Commission V. The resolution which emerged 
from the Conference reiterated certain points 
brought out at previous conferences, among which 
were that price ceilings should bear an appropriate 
relation to production costs; that there should be 
a fair relation between prices of raw materials and 
manufactured articles and that prices should be 
fair to both producei-s and consumers; that ceiling 
prices should apply in a similar manner to both 
domestic and imported articles; and that inter- 
ested governments should consult together on price 
controls. 



626 

Other Work by Commission V 

The Confez-ence approved five other resolutions 
on subjects which had been considered by Com- 
mission V. These inchided a resolution in which 
the governments undertook to continue until com- 
plete victory had been achieved their close eco- 
nomic cooperation in the prosecution of the war, 
and a resolution providing that special wartime 
economic controls should be eliminated as' rapidly 
as possible consistent with the most effective prose- 
cution of the war, recognizing, however, that it 
might be necessary to continue certain controls 
temporarily but that these controls should be only 
for purposes directly connected with the transition 
from war to peace or relating to the economic 
stability of a country during the transition. 

Two resolutions of importance were also ap- 
proved regarding the necessary controls on eco- 
nomic transactions with the enemy and control of 
enemy property. Provision was made for the 
necessary modifications, in view of changing war 
developments, in the controls which had been 
created early in the war by the American republics 
on commercial and financial transactions with 
enemies and with enemy or enemy-dominated 
countries. Safeguards were also provided so that 
there would be no opportunity in the American 
republics for the Axis powers to gain any ad- 
vantage from the use of money or other property 
which they had looted or had stolen during the 
war, and so that the American republics could not 
become a "safe haven" for Axis war loot. 

Work of Commission IV 

The majority of the economic and social pro- 
posals submitted to the Conference were referred 
to Commission IV on Post-War Economic and 
Social Problems. Among the economic proposals 
referred to Commission IV were those dealing 
with such questions as reduction of trade bar- 
riers, export subsidies, commodity agreements, 
transportation, stimulation of economic develop- 
ment, and conservation for development purposes 
of gold and foreign-exchange reserves accumu- 
lated during the war. It was to Commission IV 
that the Economic Charter of the Americas, which 
was inti'oduced by the United States Delegation 
and which is discussed below, was referred. 

The reduction of trade barriers was the subject 
of considerable discussion, and two points became 
evident during: the debates: The Latin American 



DEPARTMENT OF STATE BULLETIN 

nations were looking to the larger ti-ading coun- 
tries, including the United States and the United 
Kingdom, to take the lead in a program for the 
reduction of trade barriers; and the Latin Ameri- 
can nations desired to be fi'ee to take action to 
suppoi-t new industries in the early stages of 
development. 

Various proposals were introduced regarding 
export subsidies, all of them opposed to such meas- 
ures, and it was clear that, in part at least, these 
proposals were directed again.st the United States 
cotton-export program. 

There was considerable discussion of commodity 
agreements before a draft was finally approved 
which was acceptable to all tlie delegations. The 
discussion on tliis point revolved mainly around 
the extent to which intergovernmental agreements 
should be used as a means of dealing with prob- 
lems of commodity surpluses. One point of view 
was that such agreements should be considered as 
a normal means of handling such surpluses, while 
the other was that such agreements should be used 
only in exceptional cases of important primary 
commodities in which seiious surpluses had de- 
veloped or threatened to develop. 

The proposals dealing with transportation were 
chiefly concerned with problems of ocean ship- 
ping, including rate questions, the disposal of war- 
time shipping facilities, and tlie development of 
merchant marines. 

A subject of great interest, on which various 
proposals were intioduced. was that of economic 
development, particularly industrialization, in the 
other American republics. 

Economic Charter of the Americas 

The Economic Charter as introduced by the 
United States Delegation,' together with the state- 
ment by Assistant Secretary Clayton on Febru- 
ary 27, set forth the point of view of the Delega- 
tion on the broad range of economic questions 
which were under discussion at the Conference. 
The Charter was presented in a preamble, a Dec- 
laration of Objectives, and a Declaration of Prin- 
ciples. Although certain of the points in the 
Charter were modified during discussions at the 
Conference, the form in which it was finally ap- 
proved did not differ greatly in substance from 
the original proposal. Tlie Charter covers most 

'BuujmN of Mar. 4, 1945, p. 347. and Mar. 18. 1945, 
p. 451. 



APRIL 8, 1945 



627 



major fields of economic interest, both domestic 
and international. It was significant not only for 
its substance but also for the degree of unanimity 
in economic thinking among the American repub- 
lics which it represented and for the fact that it 
brought together for the first time in a single docu- 
ment concise expressions of the ideas of the Ameri- 
can governments on various important subjects 
which at past conferences had been treated in scat- 
tered resolutions. 

The Charter as adopted sets forth three basic 
objectives covering botli the war period and after- 
ward : Continued economic mobilization until to- 
tal victory is achieved; an orderly economic tran- 
sition from war to peace with cooperation for the 
maintenance of economic stability ; the sound post- 
war economic development of the Americas, lead- 
ing to a rising level of living and inci'eased con- 
sumption. The Charter also presents 10 principles 
as guides for the American republics in the at- 
tainment of those objectives. These are: (1) the 
creation of conditions which will make possible 
the attainment of rising levels of living; (2) 
equality of access by all nations to trade, raw ma- 
terials, and producers' goods; (3) the finding of 
practical international means of reducing trade 
barriers; (4) the seeking of early agreed govern- 
mental action to prevent harmful cartel practices; 
(5) the elimination of excesses of economic na- 
tionalism; (6) just and equitable treatment for 
foreign enterprise and capital; (7) early action 
by governments to bring into operation the Inter- 
national Monetary Fund, the International Bank 
for Reconstruction and Development, and the Food 
and Agriculture Organization of the United Na- 
tions; (8) the stimulation of private enterprise; 
(9) provision, in exceptional cases, of important 
primary commodities in which burdensome sur- 
pluses have developed or threaten to develop and 
of appropriate means for the solution of such 
problems by agreed national and international ac- 
tion; and (10) realization by the workers of the 
Americas of the oljjectives set forth in the Decla- 
ration of Philadelphia, adopted by the Interna- 
tional Labor Conference. 

Industrial Development 

Other resolutions of particular importance 
among the nine on economic subjects which 
emerged from Commission IV and which were 
later approved by the Conference included one on 
industrial development. There had been a belief 



in some quarters for some time prior to the Con- 
ference that the United States did not look with 
favor on increased industrialization in Latin 
America for fear that this would mean a loss of 
export markets. It was made clear in Assistant 
Secretary Clayton's statement, however, and in the 
Commission discussions that the United States 
Delegation did favor the development of sound 
new enterprises in the other American rei^ublics, 
and that such development would mean not only 
rising standards of living and increased purchas- 
ing power but greater exports as well. The 
greatest export markets of the United States are, 
of course, the most highly industrialized countries. 
The resolution on this subject, which favored 
the development of sound industries in the Ameri- 
can republics as an effective means of gradually 
raising standards of living, laid down the lines 
which the Conference believed such industrializa- 
tion should follow. These are: (1) new in- 
dustries, which should be promoted through pri- 
vate enterprise, should be adapted to local con- 
ditions; (2) the Bretton Woods agreements 
should be brought into operation as soon as pos- 
sible to facilitate industrial financing; (3) long- 
term credits should be made available by coun- 
tries in which there are ample supplies of capital ; 
(4) equal treatment should be accorded to na- 
tional and foreign capital, except when the in- 
vestment of the latter would be contrary to funda- 
mental principles of public interest; (5) oppor- 
tunity should be provided for just and adequate 
participation of national with foreign capital; 
(6) there should be equal access to raw materials 
and the producers' goods needed for industriali- 
zation; and (7) there should be increased cooper- 
ation in the training of technical personnel, inter- 
change of technical experts and of information, 
and facilitation of the reciprocal use of patents. 

Commodity Agreements 
Another resolution that emerged from Commis- 
sion IV after much discussion was one which ap- 
peared as no. XLVI in the Final Act, entitled 
"Sale and Distribution of Primary Products." In 
this resolution the view prevailed that interna- 
tional commodity agreements should be entered 
into in exceptional cases of important primary 
products in which burdensome surpluses have de- 
veloped or threaten to develop, rather than as a 
normal method, to be used on a broad scale, of 
dealing with commodity-surplus problems. The 



628 



DEPARTMENT OF STATE BULLETIN 



resolution set forth the principles Tvhich should 
be followed in drawing up and in administering 
such commodity agreements as might be negoti- 
ated. These principles included the following: 
Agreements should include both producing and 
consuming countries ; they should be open to par- 
ticipation by all interested coimtries in the world; 
they should be administered and reviewed periodi- 
cally by intergovernmental bodies composed of 
representatives of the interested countries; they 
should be for the purpose of achieving an orderly 
distribution of surpluses; the rationalization of 
production should be studied, to decrease costs; 
uniform types and qualities for various products 
should be established and export and impoi-t 
quotas should be determined for the countries con- 
cerned. Other important principles set forth in 
this resolution included: Assurance to producers 
of remunerative and non-discriminatory prices 
based on internationally accepted standards of 
quality; stability of supply and maintenance of 
equitable prices for consuming countries; and the 
adjustment of production toward other more eco- 
nomic activities and away from production of 
those commodities in which serious surpluses have 
developed. Finally, the objective of commodity 
agreements was expressed as the expansion of con- 
sumption, and the readjustment of production 
when necessary, in a manner which will take into 
account tlie interests of consimiers and producers 
as well as the requirements of an expanding world 
economy. 

Other Work of Commission IV 

Other resolutions approved by Commission IV 
and by the Conference included one on inter- 
American transportation which covered a variety 
of measures designed to expand the facilities, to 
improve the efficiency, and to reduce the cost of 
maritime transportation among the American re- 
publics. Another resolution recommended that 
countries producing basic commodities process 
them to the greatest possible extent before expor- 
tation. Others were concerned with the work of 
the Inter-American Development Commission 
and witli the provisions for a meeting of inter- 
American monetary authorities and for the ex- 
change of information among tlie American re- 
publics regarding pereons who, for reasons of 
hemisphere defense and security, should not be 



permitted to continue their commercial and 
financial activities. 

Summary 

A number of difficult economic problems were 
presented to the Conference, particularly those re- 
lating to the transition period from war to peace. 
There wei'e, of course, differing ideas regarding 
the steps that should be taken to meet those prob- 
lems, but after thorough and frank discussion it 
was finally possible to work out satisfactory 
understandings. 

On the longer range problems of the post-war 
period, the Conference was able to reach agree- 
ment on the broad principles which should guide 
Aarious phases of the economic development of the 
American republics. These principles, as ex- 
jjressed in the Economic Charter, will of course 
need to be implemented with specific action to the 
extent that they are not at present being applied. 

The work of the Conference on economic ques- 
tions was successful : the most difficult problems 
were faced squarely, each delegation contributed 
something constructive to the final result, and each 
delegation, while recognizing its responsibilities 
to its own government and people, was also able to 
take into account the particular problems of other 
countries. 



Merchant Shipping 

Australia, France 

The first countries to accede to the Agreement 
on Principles Having Eeference to the Continu- 
ance of Co-ordinated Control of Merchant Ship- 
ping ^ are Australia, on February 19, 1945, and 
France, on March 15. 

The agreement was signed at London August 
5, 1944 for the Governments of the United States, 
Belgium, Canada, Greece, the Netherlands, Nor- 
way, Poland, and the United Kingdom. Other 
governments may accede thereto, the date of such 
accession being the date of identic notes from 
the Governments of the United States and the 
United Kingdom, on behalf of other contracting 
governments, acknowledging receipt of the com- 
numication in which a government expressed its 
desire to accede to the agreement. 



^ Bulletin of Oct. 1, 1944, p. 357. 



APRIL 8, 1945 



629 



^'Building the Peace 



?? 



If s Your State Department' 



[Released to the press April 7] 

Voice No. 1: Just what 
is the State Department's 
"new information policy"? 

Voice No. 2 : What's all 
this high-toned talk about 
a "cultural-cooperation pro- 
gram"? 

Voice No. 3 : What is our 
Foreign Service doing to 
stop Nazi war criminals 
and their money from find- 
ing refuge in neutral coim- 
tries? 

Announcer : Important 
questions, that deserve good answers . . . For 
authoritative information on these and other 
aspects of 'Your State Departments work, NBC's 
University of the Air calls upon top officials of 
the Department itself. This is the last of a group 
of seven State Department broadcasts on the prob- 
lems of Building the Peace. These broadcasts are 
part of a larger NBC series which will continue 
during the weeks to come at this same time. 

This series represents the most extensive at- 
tempt yet made to bring the major questions of 
"Our Foreign Policy" to the homes of the Ameri- 
can people by radio. The thousands of letters re- 
ceived since the series began testify to its success. 
NBC in Washington invites further letters of com- 
ment and criticism, not only from listeners in this 
country, but from the service men and women who 
will hear this program in all parts of the world, 
through the facilities of the Armed Forces Radio 
Service. Send them to "Our Foreign Policy", in 
care of the National Broadcasting Company, 
Washington, D.C. 

This time the discussion will be on Your State 
Department. Once more Archibald MacLeish, As- 
sistant Secretary of State, acts as chairman. With 
him are Assistant Secretary Julius C. Holmes, who 
is responsible for administration in the Depart- 
ment and for the Foreign Service, and Michael J. 
McDermott, Special Assistant to the Secretary of 
State in Charge of Press Relations. 



PARTICIPANTS 

Archibald MacLeish 

Assistant Secretary of State 
JuLFUs C. Holmes 

Assistant Secretary of State 
Michael J. McDermott 

Special Assistant to the Secre- 
tary of State 
Walter Raney 

Announcer for NBC 



MacLeish : This is Archi- 
bald MacLeish. I want to 
add a word to what Mr. 
Raney — our announcer — 
has said. The group of pro- 
grams which ends tonight 
has been so successful in 
bringing us into closer touch 
with the American people 
that we plan to continue it. 
This program will be con- 
tinued during the United 
Nations Conference at San 
Francisco, and fi'om time to 
time after that. 
Some people think of this Department as a 
stuffy, ancient organization in a musty, antiquated 
building on Pennsylvania Avenue at Seventeenth 
Street — a Department that takes as long to answer 
a letter as most people take to write a book, and that 
talks, when it does talk, in the kind of English you 
see in an international agreement. The theory is 
that we come to work at ten and knock off for 
cookies and tea at four. All I can say is that this 
theory doesn't fit the facts as I've seen them in the 
last four months. We're lucky to get away at 
seven and luckier yet not to have to cart a briefcase 
full of papers home to work on. Not that we're 
complaining, but facts are facts. How does it 
look to you after three years of the Army, General 
Holmes ? 

Holmes : Mister Holmes is all right, Mr. Mac- 
Leish. I've been out of the Army for three months 
now. How does it look to me? Well, sometimes I 
feel that I'd be willing to swap for a foxhole. 

MacLeish: You've had 25 years of it, Mr. 
McDermott. How are you bearing up? 

McDermott: I'll agree with Mr. Holmes. 
Maybe the first 25 years are the hardest. But 
"commuting" to San Francisco to make arrange- 
ments for press and radio coverage of the United 

' Broadcast over the network of the National Broad- 
casting Company on Apr. 7, 1945, the seventh and last 
in a series of broadcasts sponsored by the Department of 
State. 



630 



DEPARTMENT OF STATE BULLETIN 



Nations Conference out there doesn't make life in 
the press end of the Department any less com- 
plicated. 

MacLeish : Mr. Holmes has just recently re- 
turned to the State Department after a 29-month 
tour of duty in the Mediterranean and European 
theaters of war, where he was a member of Gen- 
eral Eisenhower's staff. Before that he was in 
business, and in the Foreign Service of the United 
States for 14 years, sei-ving in France, Turkey, Ru- 
mania, and Albania, among other places. Mr. 
Holmes, will you start out by giving us a line on 
the size of the State Department and the Foreign 
Service ? 

Holmes: "Well, Mr. MacLeish, the last total I 
saw ran close to 10,000 employees in all — 9,580, to 
be exact. 

MacLeish : And of course they're all graduates 
of Harvard and Groton? 

Holmes: Well, you'' re not, and Mac isn't and 
Pin not, and neither, for that matter, are more 
than 99 percent of the others. Actually, they're a 
pretty good cross-section of the country's popula- 
tion. They come from all States and a great va- 
riety of educational institutions and all sorts of 
backgrounds. In fact, anyone who passes the 
Foreign Service examination is eligible for ap- 
pointment as a Foreign Service officer of the 
United States. Persoimel for the Department 
here in Washington are selected through regular 
Civil Service procedure. 

MacLeish : Even a Yale man can get in, if my 
experience proves anything. But go on about 
your 9,500 workers. Wliere are most of them 
stationed ? 

Holmes: About 3,300 are here in the Depart- 
ment, scattered around in 18 different buildings, 
large and small, in crowded Washington. The 
rest — over 6,300 — are in the Foreign Service, sta- 
tioned abroad. I want to stress this: it is the 
Foreign Service of the United States, representing 
not merely the State Department, but the people 
and Government of the United States. 

MacLeish: And they haven't had a very easy 
time of it, either, I understand, especially in coun- 
tries where war conditions and inflation have 
made it difficult for them even to exist on the 
modest salaries they get in United States dollars. 
Government-pay scales don't go far even in Wash- 
inirton. 



' Bulletin of Apr. 1, 1945, p. 537. 



Hollies: It's more than an economic problem, 
Mr. MacLeish. Sometimes it's one of actual phys- 
ical danger. When I was in Antwerp last Decem- 
ber I found that one of our Foreign Service men, 
Jim Keeley, had been bombed out of his billet five 
times by V-l's and V-2's. But he did a man-sized 
job every daj' in spite of that. I've just had the 
pleasure of signing a letter of commendation to 
him, based on reports of the Army Base Com- 
mander regarding the splendid contribution he 
had made in the operation of that busy port. And 
there are Foreign Service people all over the map 
working under conditions almost as bad as Ant- 
werp. There's hardly a catastrophe anywhere — 
flood, famine, pestilence, or revolution — to which 
some Foreign Service representative is not ex- 
posed. Especially in wartime, they face very real 
and constant dangers. 

MacLeish : Yes, I've seen the roll of honor down 
by the front door of the State Department build- 
ing. It's mighty impressive — 67 members of the 
Foreign Service have died at their posts over the 
3'ears. 

Holmes : They've received a good deal less rec- 
ognition than is due them. 

MacLeish : Mr. Holmes, what sort of work does 
our Foreign Service do? Some people seem to 
think its representatives spend most of their time 
2)aying diplomatic calls and drinking cocktails. 

Holmes: The Foreign Service includes both 
diplomatic and consular officials. Our representa- 
tives are found in almost every city or .seaport of 
importance everywhere in the world. They serve 
American business, give aid to U.S. citizens, and 
help to build up good relations with other coun- 
tries. They project the United States into the 
places where they are stationed. And by continu- 
ous and careful reporting, they keep the depart- 
ments and agencies of our own Government fully 
informed on political, economic, and social de- 
velopments in those places. Thus the Foreign 
Service serves as the eyes and ears of the Ameri- 
can people throughout the world, which is of 
special value in time of war. 

McDermott: The report on German plans for 
World War III, part of which was released to 
the public last week,^ is a good example of how 
the Foreign Service operates as our eyes and ears 
in wartime. 

Holmes: Yes, Mr. McDermott, Foreign Service 
officers gathered most of the material for that 
report, either from their own investigations or 



APRIL 8, 1945 



631 



through the cooperation of our Allies. It pro- 
vides a warning of what to expect from German 
leaders who are trying to find refuge in neutral 
countries so they can plan a come-back. They 
realized that they had lost the war almost a year 
ago, and began laying the groundwork for the 
post-war period. They hope to achieve world 
domination through a third World War. We 
have ample evidence of that intent. 

McDermott : Our press release a few days ago 
exposed their plans to get German money out of 
the country, after they had lifted the ban on ex- 
ports of money several months ago. It showed 
how they intend to intensify their propaganda 
to "soften up" the Allies in the post-war period. 
And it described the plan to revive pre-war Ger- 
man patent rights and cartel connections, to re- 
gain confiscated German property through court 
suits, or repurchase them if necessary, and to get 
control of scientific facilities in the neutral 
countries. 

MacLeish : Wliat more did you Foreign Service 
officers learn about the German post-war plans, 
Julius? 

HoLsrEs : Well, Archie, in August of 1943 Von 
Papen, the German Ambassador in Turkey — and 
he's the self -same Von Papen who violated all the 
rules when we were neutral before we entered 
the first World War and whom we deported in 
1915 — Von Papen told a close friend of his in 
1943 that Germany could no longer hope to win 
the war and that every possible move should be 
made to save German industrial and militaiy 
power for the future. Since that time German 
plans have crystallized. By the fall of 1944 Ger- 
man industrial leaders wei'e actively engaged in 
executing their plans for the penetration of for- 
eign countries, by exporting capital and sending 
highly skilled German technicians to areas of 
safety so that they could be used another day by 
Germany. 

MacLeish: Can you add any specific cases of 
that? 

Holmes: As early as November 1943 a repre- 
sentative of the German concern, I. G. Farbenin- 
dustrie, assured certain foreign business officials 
that whether Germany won the war or not, the 
Farben position in a certain market area would 
not be unpaired — because pre-war cartel agree- 
ments with certain firms would probably be re- 
newed. 



McDermott : And the Nazis have subsequently 
laid great emphasis on getting their loot out of 
the country so that it will be difficult to recover. 

Holmes: Yes, one German agent is now trying 
to liquidate valuable stolen property, and to place 
the proceeds (minus his commission, of course) 
at the disposal of Heinrich Himmler — all under 
cover, you may be sure. Another agent, working 
for Hermann Goering, is now in possession of val- 
uable art objects which have been smuggled out of 
Germany. He is instructed to sell them and invest 
the money on the best possible terms for Marshal 
Goering's eventual benefit. 

McDermott: I understand the Nazis are also 
trying to persuade members of certain foreign 
diplomatic staffs to help them in carrying out 
their plans. 

Holmes : Yes, Mac, they hope to use these con- 
nections not only to get rid of their stolen prop- 
erty, but to help them keep their communications 
intact. 

MacLeish : Sounds like E. Phillips Oppenheim. 
But I take it your people are satisfied that they 
know what they are talking about. 

Holmes: They are, and I am. We Americans 
are too ready to believe things like this don't really 
happen. But they do. There are villains in the 
plot. They'll search for every possible loophole 
in the Allied military plans for controlling Ger- 
many. One of the most interesting angles of the 
German plan is to place technicians where they 
can be most useful to the Nazi underground in 
its next bid for power. 

MacLeish: In Germany or outside? 

Holmes : Well, Archie, they'll undoubtedly try 
to keep operating inside Germany. But they are 
preparing for any eventuality. German techni- 
cal experts are being sent to foreign countries, or 
are encouraged to stay abroad. Some of them are 
advisers in large industries, and have access to 
the latest scientific developments in their fields. 
They are told to stay out of the spotlight, and to 
operate under assumed names, if necessary, for 
awhile. 

MacLeish : Can you talk about particular cases 
without exposing our sources of information? 

Holmes : I think so. Of course, we must protect 
our Service. That is the reason why my answer 
can't be more specific. However, I can say this: 

One Nazi plan involving an elaborate scheme 
for technical schools was submitted, by a German 
organization, to the education ministry of a for- 



632 



DEPARTMENT OF STATE BULLETIN 



eign government. Tlie plans provided for equip- 
ment for the (raining of engineers, for modern 
laboratories, and even for the designing of many 
kinds of machine tools. You see the catch, of 
course. German teachers and technicians would 
have been required. . . . And then there was 
the proposal to set up and equip a complete air- 
craft-engine industry in a neutral country. 

MacLeish : How about the old Nazi game of 
propaganda, Julius? Do the Nazis plan to go on 
stirring up latent prejudices against tlie Jews, the 
Negroes, the Communists, the capitalists, and so 
on? 

Holmes: Yes, of course. They plan to assign 
certain Nazis to pose as Communists, Socialists, 
and members of trade-union organizations. The 
Nazi strategists intend to use these people to pene- 
trate into anti-Nazi circles, in Germany and out- 
side. Some may even try to pass as refugee 
members of the German anti-Nazi movement. 

MacLeish : And I daresay they will arrange to 
appear more anti-Nazi than the real anti-Nazis. 

Holmes: The encouraging thing is that the 
Allied governments are fully aware of all this, and 
determined to prevent the Nazis from getting 
away with their schemes. That's half the battle. 
The other half is still to come. 

MacLeish : Now all this is interesting enough, 
but the other day we were asked jjretty pointedly 
by one of the newspapers what we are going to do 
to thwart the German plans, now that we know 
about them. What about that, Julius? 

Holmes: We'll do everything possible, in con- 
junction with our Allies, to stop them. Detailed 
plans obviously can't be divulged. You don't in- 
form a gang of conspirators about the counter- 
measures you are taking until you take them. 

McDeemott : The reason we put out a press re- 
lease on this subject was to warn all decent people, 
both here and abroad, so that they can be on their 
guard. 

Holmes : All this intelligence work, of course, 
is only one of the many activities of the Foreign 
Service. It's primarily a wartime activity. But 
as members of the proposed world Organization, 
we'll still have to keep ourselves informed about 
possible future aggressors after the war. 

MacLeish : Now, as to the Foreign Service and 
its other activities, Julius : What plans have you 
made to expand its scope after the war? The 
policy outlined at Yalta gave it many new respon- 
sibilities, at least in Europe. 



Holmes : Yes, we'll have to pursue a much more 
active policy in the liberated areas of Europe, and, • 
indeed, eveiywhere in the world. 

MacLeish : That means more emphasis on eco- 
nomic jjroblems, social welfare, education, and the 
like, as well as on political questions. 

Holmes : Yes. We have never had to deal very 
extensively with some of these mattei's before. 
We'll have to have specialists in many different 
fields, attached to the various embassies and lega- 
tions and consulates. 

MacLeish: That will obviously mean a con- 
siderable expansion in the Foreign Service after 
the war. What plans are being made for it ? 

Holmes: At present, we have three survey j 
teams in the field — one in Europe, one in the Near 
East and Africa, and a third in South America. 
They're making surveys of the need for new 
methods of operation, housing facilities, equip- 
ment, and personnel. Each team is composed of 
an expert on administrative management, an 
officer of the Budget Bureau, and a seasoned 
Foreign Service officer. 

MacLeish: Much of the new personnel that 
will be needed in the future will be of a technical 
sort, I suppose, Julius. Specialists in economics 
and labor problems will probably be in demand, as 
well as information and cultural-relations special- 
ists. 

Holmes : To say nothing of experts in aviation, 
petroleum, minerals, and the like, in countries 
where they are needed. 

MacLeish : How will these men be chosen ? 

Holmes: They'll come from all branches of the 
Government, Archie. The labor specialists, for 
example, will be selected with the assistance of the 
Department of Labor. Tliey will be people with 
a labor background. 

MacLeish: You mean an actual labor back- 
ground—A. F. of L., C. I. O.? 

Holmes: Wlierever we can find persons with 
the qualifications, yes. We would hope to find 
some of our new labor specialists in labor organiza- 
tions such as these. 

McDermott : You might speak about the infor- 
mational and cultural-relations attaches, Archie. 
They'll have an important job to do. 

MacLeish : An absolutely essential job. No in- 
ternational organization is going to work unless 
the peoples of the world can be made to understand 
each other, and to understand each other they've 
got to talk to each other back and forth — exchange 



APRIL 8, 1945 



633 



ideas and skills and knowledge — swap stories and 
poems and songs — get the feel of each other. Cul- 
tural cooperation is a term that sounds high-toned 
to most people, I know. But we don't mean it the 
way they used to in the Browning societies. 
Knowledge and art and poetry and the various 
techniques and skills are real things — human 
things — things more real and human than money 
or international balances of trade or diplomatic 
maneuvers. They are practical things — useful 
things — far more practical and useful than most 
of the things we think of as practical. They are 
the real currency of international relations. And 
we have the means now, with modern systems of 
communications, to put that currency in circulation 
to the common benefit of the entire world — if we 
have the will to do it. 

McDermott: That's a large order, especially 
with limitations imposed on us by the break-down 
of communications in wartime. 

MacLeish : I agree, Mac. Our first job will be 
to reestablish those channels of communication. 
Not just the cables and radio systems, but those 
deeper down — those which carry the exchange of 
ideas and knowledge. I'd like to begin by making 
American skill a technical knowledge available to 
the people in the liberated countries, to help them 
to help themselves. I'd like to export American 
skill, American know-how, in the original human 
containers first — I mean by sending people — and 
in books and films and by other means. The cost 
would be trifling. The good done to others, to 
ourselves, and therefore the peace of the world, 
would be past computing. 

McDermott: Many people seem to think, 
Archie, that the cultural-cooperation program is a 
sort of decoration, a frill that is the product of 
some do-gooder's mind. Don't you want to spell 
out the answer to that? 

MacLeish : It's no frill, or foible, I can assure 
you. We've got to prepare a climate for peace — 
the climate of understanding and good-will. By 
doing this, we stand to gain security for ourselves, 
just as we stand to gain prosperity here at home 
by working for higher living standards abroad. 
We want the world to share its common wealth of 
culture — of knowledge and of art and skill — be- 
cause we believe that by this means, not only knowl- 
edge and understanding, but the hope of peace 
will be enhanced. For our part we want to spread 
understanding of the United States through 
knowledge of our people and books and music and 



scientific achievements ; we want to build up con- 
fidence in ourselves and in our way of life, by 
letting the world see how well democracy works. 

Holmes: You asked me for examples a while 
ago, Archie. Now, I'd like to ask you : What do 
you mean by international exchanges of knowl- 
edge and skill? 

MacLeish: Well, here's an example. Some 
months ago the University of Sao Paulo, in south- 
ern Brazil, made a request to us for aid in opening 
a department of psychology. We canvassed the 
field and were able to get for them the services of 
an outstanding social psychologist, Otto Kline- 
berg of Columbia University. He is a linguist 
and is learning Portuguese. In July he goes to 
Siio Paulo to start working with a group of ad- 
vanced students. When he comes home he'll leave 
beliind him a modern psychology department. 
That will be a real contribution to Brazilian life 
and to social conditions down there. And when 
Dr. Klineberg returns to this country, he will 
bring with him a fund of information about life 
in Brazil which the people of this country badly 
need — and which he'll be well qualified to give 
them. 

McDermott: Then there are good, down-to- 
earth examples of the cultural-cooperation pro- 
gram like the work of Dr. Dykstra of the Depart- 
ment of Agriculture, whom we sent to China. 
By introducing disease-resistant potatoes — and 
they're good seed potatoes too, Archie — and es- 
Ijecially varieties adapted to different soils and 
climates, he added greatly to China's potential 
food supply. Before that China had raised only 
one variety of potatoes, in a very limited area, and 
with a poor yield. 

MacLeish : Yes, Dr. Dykstra traveled half-way 
around the world by rail and sea and air with 
150 pounds of seed potatoes in his baggage. It 
was quite a trip, but China now has over 50 im- 
proved varieties, furnishing a new food staple in 
places where rice cannot be grown. 

McDermott: And then there's Dr. S. Y. Chen, 
the Chinese physician who rescued several Amer- 
ican aviators behind the Japanese lines in China, 
after the first air raid on Tokyo in 1942. He took 
care of those flyers in his small hospital for a 
month, and guided them to safety in free China. 
At the suggestion of Major Ted Lawson, who 
wrote Thirty Secoixds Over Tokyo, the State De- 
partment invited Dr. Chen to study surgery in the 
United States for two years at the expense of this 



634 



DEPARTMENT OF STATE BULLETIN 



Government. He will take back with him new 
surgical skills, to be passed on to other Chinese 
doctors. But before we leave this subject alto- 
gether, I'd like to add one more example, this 
time as to what technological aid to other coun- 
tries will mean to them and to us, after the war. 
I mean John Savage's plan for a huge dam across 
the Yangtze River in China — the biggest dam 
in the world, one which would outproduce Grand 
Coulee and Boulder Dams put together. The plan 
was drawn up at the request of the Chinese Gov- 
ernment and of course is only in the preliminary 
stages. 

Holmes : Jack Savage is an outstanding example 
of a great civil servant. He's been in Govern- 
ment sei'vice for 42 years, and has designed many 
of our greatest dams, including Grand Coulee and 
Boulder, incidentally. The State Department ar- 
ranged with the Interior Department for him to 
go abroad as a consultant to various governments, 
including Palestine, Afghanistan, India, and 
China. 

MacLeish : Of course, the general idea of dam- 
ming the Yangtze is nothing new. The Chinese 
have been talking about it for years. The huge 
dam Savage proposes, if it goes through, would do 
much to end the floods that have always plagued 
central China. It would help to raise living stand- 
ards by enabling China to industrialize more 
rapidly and by furnishing cheap electricity to 
the people, and would open up the Yangtze for 
added river traffic. 

McDermott: And incidentally by developing 
that huge region, the project would open up a tre- 
mendous new market for manufactured goods — 
United States goods, among others. 

MacLeish : Another thing : To get people and 
ideas moving freely back and forth, you've got 
to lower the barriers to travel and migratioix 
wherever this can be done in the national interest. 
One complaint that often turns up in the State De- 
partment is that we haven't always handled visas 
impartially — that we have allowed, say, Vichy 
French collaborationists to come in while keeping 
Spanish Republicans out. How does the visa sys- 
tem operate, Julius? 

Holmes : Right now, of course, we're operating 
under wartime restrictions. Secwrity is the first 
consideration. All visas must be cleared with 
Washington in advance, and they are carefully 
checked, you may be sure. We have leaned over 
backward to avoid taking chances — with the re- 



sult that when Hitler wants to get his agents into 
this country, he brings them in by submarine, in- 
stead of through the front door. 

MacLeish: But what about the charge of 
partiality? 

Holmes : Well, Archie, at least 90 percent of all 
people we exclude are those suspected of connec- 
tions with the enemy. I know of no case of a 
Spanish Republican or other anti-Nazi being ex- 
cluded, unless he was suspected of a connection 
with the enemj', or was found to be ineligible 
under the law laid down by Congress. The act 
of 1918 excludes advocates of violent revolution, 
and persons convicted of serious crimes. Perhaps 
we have made mistakes from time to time. We're 
not 100-percent perfect. But we do our best to be 
impartial in carrying out the law. 

MacLeish: Now, to change the subject a bit: 
Our information policy here at home is a two-way 
proposition, like our cultural-cooperation program 
abroad. We study letters to the Department very 
carefully — and they are coming in at a rate of 
about 600 a day now. These are the so-called 
public-comment letters, in which peojjle tell us 
what they think or ask questions about our foreign 
policy. We also compile periodic summaries of 
what the press and radio are saying on current 
issues in our foreign policy. And we study the 
public-opinion polls with great care. 

Holmes : That isn't the only consideration in 
formulating foreign policy. But it is one of the 
important things. 

MacLeish : You might say it's one of the vital 
tilings. No foreign policy in a democracy is any 
better than the public support it has. And you 
can't have public support without public knowl- 
edge. The foreign policy of a democratic counti-y 
must reflect the people's will. 

Holmes: And it's a good thing we do. If a 
foreign policy is not actively supported by the 
people, it rei^resents only the pious hopes of the 
officials who pulled it out of thin air. 

MacLeish: Now, I'd like to go into the other 
aspect of our information work : getting news on 
our foreign policy to the people. We have good 
channels such as our Department of State Bul- 
letin for getting information to the experts, but it 
takes press and radio to get it to the people. That's 
the special job of Mike McDermott here. Mac, 
suppose you tell us just how a news release gets 
born. 



APRIL 8, 1945 



635 



McDermott : Well, Archie, a press release comes 
about in several vrays. Sometimes a Department 
officer lias soinething he thinks should be released, 
and our office works it out with him. Sometimes 
our office spots news in the Department's tele- 
grams or memoranda which we thinli should be 
made public. We then work it out with the De- 
partmental people who are handling the prob- 
lem and submit it to the top witla our recommen- 
dation. Sometimes a newspaper report calls for 
comment. We go to the responsible officer in the 
Department and say "It seems to us that this calls 
for comment. It's something on which we think 
the public should be informed. Let's consider 
whether the facts can't be made jDublic". 

MacLeisii : Of course you know better than I, 
Mac, that the correspondents in the press room — 
representing the wire services and radio networks 
and many individual newspapers as well — aren't 
always satisfied with our handling of the news. 
Leon Pearson, who represents the International 
News Service at the State Department, had this 
to say in a magazine article last month : 

". . . to manij State Department officials the 
sound of the word 'press' has the same psycholog- 
ical effect as the word 'goblin' to the mind of a 
child. The Department wants the public to know 
everything, but hesitates to tell them anything; 
it suffers from timidity and an exaggerated sense 
of the horrible consequences of disclosure. The 
Department shrinks from publicity, yet continues 
to cry out for an informed public opinion." That's 
the way Mr. Pearson puts it. 

McDermott: Well, we're taking the initiative 
more and more in getting the news out to the peo- 
ple. This radio series itself is evidence of that. 
What the press doesn't always take into account 
is that we can't operate like a newspaper. Every 
statement that is made by the Department is offi- 
cial — so the facts have to be carefully checked 
and rechecked, sometimes several times, before the 
story can be released. But most of our work is 
more direct, answering queries on the spot, and we 
try to get the news out quickly. 

MacLeish : Mac, you might describe the various 
channels you use to get information to the press. 

McDj:rmott: Well, the simplest means is the 
handout — the routine release, telling of appoint- 
ments or public statements of officials in the De- 
partment. The texts of speeches are particularly 
important, for they are really well thought-out 



statements of policy. Then there are press con- 
ferences. The Secretary, Under Secretary, or 
some other top official meets the press almost 
every day. These conferences are often arranged 
at the request of the press, and they are usually 
attended by anywhere from 25 to 50 reporters. 
Some of the material released in this way is for 
background only — that is, not to be quoted di- 
rectly. And, vei-y often off'-the-record explana- 
tions are given, not for publication, but to help 
the press interpret the news. A complete tran- 
script is made of each conference and is avail- 
able to the correspondents. Then a third method 
of meeting a press query is to issue a statement 
for quotation — which is usually attributed to a 
"Department spokesman". 

MacLeisii : All of which keeps you pretty busy, 
I've noticed. 

McDermott: Yes. Our office functions 24 
hours a day. We get queries from the corre- 
spondents based on the latest press bulletins from 
all over the world. Most of the questions come 
in by telephone. We do our utmost to answer 
them immediately. If we can't, we bring them 
up at the Secretary's press conference. Those are 
the toughies. The Secretary is warned before- 
hand as to what is coming u^d, and he gets the 
answers ready. 

MacLeish : And the various specialists in the 
Department, of course, talk to correspondents on 
subjects in their fields, don't they ? 

McDermott: Yes, we arrange these individual 
conferences. We try our best to meet every re- 
quest for an interview. Usually such conferences 
are for background only, but sometimes the offi- 
cers of the Department can be quoted. 

MacLeish : One common criticism in the press 
room is that, in the past, certain winters have 
obtained access to important documents for ex- 
clusive stories. The other reporters naturally feel 
that all official documents made public should be 
made available to all members of the working 
press, if they care to use them. 

McDermott : And we agree, absolutely. That's 
our policy. Of course, when a correspondent digs 
up a story for himself, it's his. The Department 
does not divulge that he is working on it. As 
soon as he publishes it, though, and inquiries come 
in from other correspondents, the same informa- 
tion is made available to them immediately. 

MacLeish : One man writes from New York to 
ask, "Is there any real necessity for the se- 



636 



DEPARTMENT OF STATE BULLETIN 



crecy surrounding international negotiations and 
conferences?" 

McDermott: The answer to that is yes, if he 
means conferences like Casablanca, Tehran, Cairo 
and Yalta. For one thing, you have security con- 
siderations. If the meetings were reported in the 
press at the time, the enemy might very well 
make attempts on the lives of the United Nations 
leaders. 

MacLeisii : Then you've got to have some 
privacy in order to have free negotiations. Every 
newspaperman recognizes that fact. 

McDEEiioTT: On the larger conferences, our 
policy is to throw them as wide open as possible 
to the press, as we did at Mexico City, and plan 
to do at San Francisco. That's a basic part of 
our information policy. 

MacLeish : There has also been criticism of the 
delay in announcing the Yalta agreement on the 
voting procedure in the Assembly of the world 
Organization, whereby we agreed to support the 
request of the Soviet Union for votes for the 
Ukrainian Soviet Republic and the Wliite Russian 
Soviet Republic if the Russians asked for them at 
San Francisco, and whereby we reserved the right 
to ask for two additional votes for ourselves if 
the San Fi'ancisco conference acted favorably on 
the Russian proposal. 

McDermott : Yes, that created quite a furor in 
the press room. 

MacLeisii : And it came as a complete surprise 
to a good many of us. However, there were rea- 
sons, as the Secretary has stated in a recent press 
release, for withholding the announcement. It 
was felt that the result of the conversations at this 
point should be communicated, first, to the Ameri- 
can Delegation, since the question of whether the 
United States would ask for additional Assembly 
votes for itself was left open at Yalta. But that 
didn't make it any easier for those of us with an 
information jjrogram to worry about. I guess you 
and I will have to write it off, Mac, as another 
example of the difficulty of running the informa- 
tion end of foreign affairs. 

McDermott: There have been plenty of other 
examples over the past 25 years, and there will 
be plenty more ahead. When that story broke 
we were beseiged by the press for a statement or 
a press conference. We immediately arranged 
with Mr. Stettinius to meet the press at noon the 
following day. The reporters, meanwhile, pre- 
pared for the conference by making up a list of 27 



of the toughest questions you ever saw, and 6 more 
were added at the conference. The Secretary did 
not attempt to toss off answers, but took the entire 
list of questions under advisement, and on Tues- 
day of this week held another conference at which j 
he answered evei'y issue i-aised by those questions. 1 
It was at that time that the President's decision 
not to ask for extra United States votes was an- 
nounced. The Secretary made clear that the mat- 
ter would be left up to the San Francisco con- 
ference. 

MacLeish : An equall}' good example of how 
the State Department serves the press was the 
earlier story of the voting procedure in the Se- 
curity Council of the proposed world Organiza- 
tion. Suppose you tell that one, Mac. 

McDermott: Well, the first announcement de- 
scribed how each of the five large powers would 
have a veto over the use of force. And it pointed 
out that in the peaceful settlement of disputes, 
any nation that was involved would be excluded 
from voting. Representatives of the Christian 
Science Monitor, the NeiD York Herald Tribune, 
and other papei's studied the announcement, and 
came up with the conclusion that there was a 
secondary veto power by which any major power 
with a permanent seat on the Securitj' Council 
could prevent even peaceful action being taken to 
solve a dispute in which it was not involved, or 
prevent even an investigation from being made. 

MacLeish : So they came to the Department 
for more light on the matter. 

McDER5roiT: Yes, and after conferences among 
the experts on the international Organization, the 
Department put out a brief written statement con- 
firming some of the press interpretations that had 
been made. But that still didn't satisfy the eagle- 
eyed members of the press. So a more complete 
statement was drawn up, after an all-day session 
with the experts, which was released at Under 
Secretary Grew's press conference just two weeks 
ago. 

Holmes : That's quite a story. 

McDermott: We haven't reached the end, 
though. At Mr. Grew's press conference. Dr. 
Leo Pasvolsky and Alger Hiss, two of our top 
specialists in this field, were on hand to sit down 
with the reporters and answer questions. They 
made the State Department's interpretation clear: 
That no big power in the Security Council would 
be able to block discussion of any dispute, although 
a big power could block a formal investigation or 



APRIL 8, 1945 



637 



peaceful action to settle a dispute in which, it was 
not involved. 

Holmes : And it was also pointed out that any 
big power would think not twice, but ten times, 
before it vetoed either an investigation or peaceful 
action to settle a dispute. 

McDeioiott: I understand, too, Archie, that 
you took a whack at the press statement, getting 
it into language that could be understood by the 
layman. But the main point is, we made every 
effort to inform the members of the press when 
they raised questions. 

MacLeisti : I'd like to take a minute to try to 
sum this discussion up. We agree, to begin with — 
and agree pretty emphatically — that life in the 
Foreign Service of the United States is not all 
cookies and tea — that, on the contrary, it's often 
bombs before breakfast and always hard work and 
plenty of it. And that goes, without the bombs 
but with emphasis on the work, for the Depart- 
ment of State here in Washington. 

We feel pretty strongly that the Department's 
efforts to increase understanding between nations 
by forwarding the exchange of knowledge and 
ideas and art and skills between them is one of the 
most important things this Government can do 
in the field of foreign relations — that it is about 
as far from being a frill or furbelow as you can 
get in this tragic but yet hopeful world. We see 
the Department's information work as an attempt 
not only to tell the country about foreign policy 
but also to make foreign policy rest, as it may rest 
in a democracy, upon the people's understanding 
and belief. Finally — and as regards this whole 
series of broadcasts — we feel, for our part, that 
the Government of the United States very defi- 
nitely has a foreign policy, that that foreign policy 
is shaped to give effect to the will of the people of 
the United States, and that the more the people of 
the United States know about that policy, and 
the more that policy draws its strength from the 
people, the stronger and more prosperous and 
peaceful the United States will be. 

Announcer: That was Assistant Secretary of 
State Archibald MacLeish. With him were Assist- 
ant Secretary Julius C. Holmes and Mr. Michael 
J. McDermott, Special Assistant to the Secretary 
of State in Charge of Press Relations. 

This was the last of seven programs in which 
NBC's University of the Air has presented top 
officials of the State Department. If you would 



like to receive a pamphlet containing all seven 
broadcasts, write to the Department of State, 
Washington 25, D.C. 

Next week NBC's University of the Air will 
bring you the views of two key members of the 
Senate Foreign Relations Committee on the com- 
ing United Nations Conference on International 
Organization, Senator Tom Connally of Texas, 
Chairman of the Foreign Relations Committee 
and a member of the United States Delegation to 
the San Francisco Conference, and Senator War- 
ren R. Austin of Vermont, a member of the For- 
eign Relations Committee. Senators Connally 
and Austin were both members of the United 
States Delegation to the recent Mexico City con- 
ference. They will discuss with Sterling Fisher, 
director of the NBC University of the Air, the 
relationships between the Chapultepec conference 
and San Francisco, and analyze some of the ques- 
tions yet to be settled in Organizing for Peace. 

Listen in next week for answer to such questions 
as these : 

Voice No. 1 : Will the Act of Chapultepec affect 
our stand at San Francisco? 

Voice No. 2 : What about voting procedures in 
the new world Organization ? 

Voicx No. 3 : Is the Senate likely to approve a 
treaty setting up a world organization based on 
the Dumbarton Oaks Proposals? 

Annotjncek: This program came to you from 
Washington, D.C. This is the National Broad- 
casting Company. 

Relinquishment of 
Extraterritorial Rights 

Canada-China 

The American Embassy at Chungking has in- 
formed the Secretary of State that ratifications 
of the Treaty Between Canada and the Republic 
of China Concerning the Relinquishment of Extra- 
territorial Rights and the Regulation of Related 
ISfatters ^ were exchanged on April 3, 1945 at 
Chungking. The treaty, which was signed at 
Ottawa April 14, 1944 and was accompanied by 
an exchange of notes, became effective inunedi- 
ately upon the exchange of ratifications. 



" Bulletin of May 13, 1944, p. 458. 



638 



DEPARTMENT OF STATE BULLETIN 



United States Policy Regarding Commodity 



Ao;reements 

Address by BERNARD F. HALEY' 



[Released to the prees April 5] 

Fundamental in all plans for the establishment 
of a durable peace is the necessity of international 
collaboration for the maintenance of economic 
stability and for the achievement of higher levels 
of real incomes throughout the world. In the de- 
velopment of any general program of interna- 
tional action directed to these ends, attention must 
be given to the special problems of certain indi- 
vidual commodities of vrorld-wide importance, the 
conditions of whose production are such that, un- 
less they are given some attention, they may well 
be, or may become, serious sources of economic 
maladjustment. Hence it is important that we 
should make a place in our general program of 
foreign economic policy for international col- 
laboration with respect to such individual problem 
commodities, and should insure that neglect of 
these commodity situations will not endanger the 
success of our general program directed to the 
expansion of world trade, the attainment of high 
levels of employment and income, and the mainte- 
nance of economic stability. 

International collaboration with respect to a 
particular commodity problem usually takes the 
form of a commodity agreement between two or 
more governments.- International collaboration 
may take the form of a loose type of arrangement 
between the governments of countries having an 
important interest in a i)articular commodity for 
joint discussion and study of the international 
problems of that commodity. Examples of such 
an arrangement are the Rubber Study Group of 
the Netherlands, United Kingdom, and United 
States Governments, and the proposed interna- 
tional petroleum agreement between the United 



' Delivered before the semi-annual meeting of the 
Academy of Political Science in New York, N. Y., on Apr. 
5, 194"). Mr. Haloy is Director of the OfBce of Interna- 
tional Trade Policy, Department of State. 

'Private international business arrangements with re- 
gard to commodities of the cartel variety are not con- 
sidered in this paper. 



Kingdom and the United States.' Broadly 
speaking, the function of commodity arrange- 
ments of this type is to provide a convenient and 
informal means by which the possibilities of pro- 
moting greater stability in the conditions of pro- 
duction and trade for a particular commodity may 
be canvassed, opportunities for the future expan- 
sion of demand may be explored, and possible an- 
ticipated difficulties may in some measure actually 
be prevented from developing without quanti- 
tative regulation of production and trade neces- 
sarily becoming involved at all. 

In some cases however it may be necessary to 
have recourse to the regulation of international 
trade in, or production of a particular commodity 
imder, an intergovernmental commodity agree- 
ment. Export and import quotas are the most 
usual means by which international control may 
be exercised, but prices may be directly fixed, and 
production controls of various sorts may also be 
involved. Examples of this restrictive type of 
commodity agreement are the pre-war arrange- 
ments with regard to rubber and sugar, and the 
present agreement with regard to coffee. 

The entire inter-war period from 1919 to 1939 
was marked by the growth of commodity-control 
schemes, both national and international. Some 
of these controls were private in character; others 
were under government auspices. Several of the 
controls antedated the economic collapse of 1929, 
but the advent of the world depression greatly in- 
creased their scope and number. Detailed research 
with respect to the most important commodities 
made subject to international-control schemes 
shows that the major factors responsible for the 
spread of commodity controls in this period were 
active even before the general economic collapse 
of 1929. They fall under three headings: First, 
the rapid rate of technological progress with the 
resultant effects on supply. Technical progi-ess 
is broadly interpreted to include such disparate 
factors as the introduction of the tin dredge, the 

'BtJLLBmN of Feb. 4, 1945, p. 161, and Aug. 13, 1944, 
p. 153. 



Al'RIL 8, 1945 



639 



application of machinery on new, level wheat 
hinds, the use of higlier yield varieties of sugar 
cane, and the opening up of new low-cost coffee 
and cotton plantations. The second factor was the 
growth of economic nationalism and the accom- 
panying desire for national self-sufficiency, which 
frequentlj' led to the stimulation of high-cost pro- 
duction and the shielding of high-cost producers 
from foreign competition. A third circumstance 
was the chronic surplus-suppl^y situation in the 
case of certain commodities which prevailed in 
the inter-war period as a result of the stimulus to 
the production of these commodities which occur- 
red in the first World War. This term, swrplus- 
supply slhiafion, is used here to refer to cases in 
which the rate of production of a commodity is so 
high, relative to demand, that the whole supply 
can be disposed of only at prices i-egarded as ruin- 
ously low. The term surplus supply should not, 
therefore, be taken to imply that there necessarily 
exists an actual stockpile of abnormal size, al- 
though the latter may quite promptly come into 
existence if a price-support policy is put into 
effect. 

There seems no good reason to suppose that, fol- 
lowing the present war, the impact of technology 
in revolutionizing raw-commodity production will 
be less intense than in the preceding quarter cen- 
tury, though, granted high levels of industrial pro- 
duction and employment, the consequences of this 
expanding production upon prices may be less 
drastic than it w'as in the depression decade fol- 
lowing 1929. Neither is it likely that governmen- 
tal intervention on a national basis will automati- 
cally come to an end with the conclusion of 
hostilities. Furthermore, it seems reasonably 
clear that the war itself will give rise to a number 
of additional problems of adjustment in raw- 
material production, arising out of the wartime 
shifts in the international production pattern and 
the stimulus to the development of new productive 
capacity that has occurred. For example, the na- 
tions that have collaborated in fighting the war 
against the Axis powers, shut off from their nor- 
mal sources of supply of many items, have greatly 
expanded their own output of those products that 
formerly were obtained from enemy or enemy- 
occupied territories. A similar wartime expan- 
sion of many conunodities has no doubt also oc- 
curred within the enemy areas. When the war 
ends and old sources of supply are reopened there 



may be large surpluses of these commodities, in 
sjjite of the high level of world demand that should 
also prevail. A surplus-supply situation is also 
likely to arise in cases among some of the metals 
the production of which has been expanded many 
times over to meet a war demand that has been 
much heavier than noi-mal peacetime require- 
ments. 

It follows that, in the case of a number of im- 
portant primary commodities, we are likely to 
have a surplus-supply situation with which to 
deal after the present World War is over, or in 
some cases even before the end of the war. So far 
as we are successful in obtaining the collabora- 
tion of other nations in a broad j^rogram directed 
to the expansion of international trade and in- 
vestment and the maintenance of high levels of 
production in the great industrial nations, the 
magnitude of such surpluses should be substan- 
tially reduced. Certainly the indirect benefits of 
such a broad program in stimulating the demand 
for raw materials should make an imiDortant con- 
tribution toward easing the problems of primary 
producers. Yet there are almost certain to be 
some commodities, particularly primary products, 
that will continue in surplus supply even though 
we may be successful in our efforts directed to the 
reduction of trade barriers and to the attainment 
of high levels of industrial production. There 
will be a residual of individual commoditj^ prob- 
lems which will have to be dealt with by means of 
international collaboration and in some cases by 
commodity agreements. 

Commodities that are likely to continue in sur- 
plus supply for a long time, in the absence of 
positive government action, are in the main com- 
modities the supply of which is relatively imre- 
sponsive to changes in price. Even though the 
price may decline greatly, the producers do not 
quickly contract their output. Such commodities 
are also, by an unfortunate coincidence, likely to 
be the sort of commodities for which the demand 
is relatively inelastic. Even though the price may 
decline substantially, the quantity taken off the 
market increases relatively slightlj' ; the sui^jily re- 
mains unabsorbed except at ruinously low prices. 
Under such circumstances, which are in general 
the circumstances characteristic of many primary 
products, a surplus-supply situation is not self- 
correcting — or so far as it is self -correcting, the 
suffering involved in the process for the producers 



640 



DEPARTMENT OF STATE BULLETIN 



of the commodity is likely to be so distressing that 
nations are unwilling or unable to permit the 
"natural" process of readjustment of supply- to 
demand to proceed. 

If the commodity characterized by such a 
chronic surjjlus-supply situation happens to be an 
important one in the economic life of a nation, as 
is frequently the case, then the situation presents 
a number of serious problems for other nations as 
well. In the first place, the great decrease in 
price for the conmiodity is likely to create a 
chronic depression among the producers of the 
commodit}', reducing their purchasing power and 
in fact the ability of their nation to buy abroad, 
and thus also reducing its demand for the prod- 
ucts of other countries. Such a situation may 
thus contribute to undermining efforts to main- 
tain high levels of employment and production 
generally. 

In the second place, the government of the 
country producing such a commodity may find it- 
self compelled to buttress the position of its pro- 
ducers of the commodity by a price-support pro- 
gram, by the reservation of domestic and colonial 
markets for their own producers, and other uni- 
lateral methods of domestic relief. If there are 
many commodities in surplus supply in the post- 
war period, such unilateral action by a number 
of diilerent countries would make it extremely 
difficult to work out successfully the multilateral 
arrangements for the reduction of trade barriers 
and the elimination of discriminations that are 
so much to be desired. Properly conceived and 
executed international commodity agreements 
would enhance the chances for success of the gen- 
eral program for the relaxation of trade barriers. 

It is true that experience with past international 
commodity agreements has been such as would cast 
some doubt upon the possibilities of reconciling 
the characteristic methods of international com- 
modity agreements with the requirements of a 
general program for the all-around reduction of 
trade barriers -or, indeed, of any broad jirograra 
for expansion of the world economy. The con- 
structive economic purposes which commodity 
agreements might have served in correcting the 
basic causes of maladjustment in the industry were 
often lost sight of in the urgency of providing im- 
mediate relief for the producers of the distressed 
commodity, or in merely satisfying the producers' 
desire for higher prices. Generally speaking, in- 



ternational commodity agreements in the past have 
been largely concerned with developing effective 
means for restricting international trade or pro- 
duction in order to provide, at a minimum, a tol- 
erable basis for survival of all the national pro- 
ducer-groups concerned, pending a change for the 
better in the industry's economic fortunes. In 
some cases, the control schemes went far beyond 
this minimum objective and — whether by original 
design or by a gradual process of yielding to the 
temptation to exact higher prices — turned into in- J 
struments of monopolistic abuse. In eitlier case, ■ 
however, the emphasis in past regulation schemes 
has been on the restrictive aspects of such agree- 
ments. 

It should be recognized, however, that most of 
the commodity agreements in the past have been 
agreements between the governments of producing 
countries. Consuming countries have seldom, if 
ever, been adequately represented. Furthermore 
the emphasis has been upon the restriction of out- 
put and the maintenance of prices, and little effort 
has been made under the agreements to remove 
the basic causes of the maladjustment of supply 
and demand. 

It is evident, then, that, in spite of the expansion 
of world trade that we hope to achieve, there are 
likely to be a number of important commodities, 
particularly primary products, that will be in 
chronic surplus supplj^; and that intergovern- 
mental collaboration with regard to such situations 
is desirable if high levels of employment and pro- 
duction are to be generally maintained and if 
multilateral action directed to the reduction of 
trade barriers and the elimination of discrimina- 
tions is to be successful. It is also to be noted that 
past commodity agreements of a restrictive variety 
have in important respects been defective. The 
use of commodity agreements in the post-war 
period should conform to certain specified re- 
quirements, designed to insure that their effects 
will be remedial and their restrictive features will 
be formulated with a view to the public interest. 

The emphasis in making corrective adjustments 
should be first upon the maximum possible stimu- 
lation of demand and only last upon a curtailment 
of production and trade. Although it offers serious 
difficulties, concerted action to find new uses or to 
stimulate demand in existing uses for a commodity 
in surplus supply is almost certain to be a less 
painful solution than the drastic reallocation of 



APRIL 8, 1945 



641 



resources which would be called for if the problem 
is attacked primarily from the supply side. If the 
attempt to stimulate demand proves inadequate 
and the development of burdensome surpluses 
threatens to lead to economic distress and possibly 
to unilateral action bj' the producing countries, 
then a reallocation of resources should take place. 
An intergovernmental arrangement participated 
in by consuming and producing countries, and en- 
compassing financial and other aids to facilitate the 
readjustment, may induce the affected countries to 
liquidate extra-marginal capacity. In such cases 
measures temporarily setting production or export 
quotas or allocating markets may be a necessary 
means of easing the transition for the countries 
most affected. 

Administration of the requirements to which 
any such international commodity agreement 
should conform should be entrusted to an inter- 
national economic organization which should have 
the appropriate research, consultative, policy- 
recommending, and administrative functions nec- 
essary for the integration of policy with regard 
to commodity agreements into the broader frame- 
work of international economic collaboration. 

Such an international economic organization, 
once it is established, should see to it that inter- 
national commodity agreements between the mem- 
ber governments conform to the following 
requirements. 

1. That no international commodity arrange- 
ment involving the limitation of production or 
exports or allocating markets should be established 
until after : 

(a) An investigation of the root causes of the 
problem which gave rise to the proposal ; 

(b) Determination that a burdensome surplus 
has developed or threatens to develop ; 

(c) Determination that the conditions cannot 
be corrected by the operation of normal market 
forces ; 

(d) Formulation of a program of adjustment 
believed to be adequate to insure substantial prog- 
ress toward solution of the problem within the 
time limits of the arrangement. 

2. That any international commodity agree- 
ment which is adopted should operate in accord- 
ance with the following principles: 

(a) It should be open to accession by any inter- 
ested country. • 

(b) In any such arrangement the countries ad- 



hering thereto which are largely dependent for 
consumption on imports of the commodity should 
have together a voice equal to those largely inter- 
ested in obtaining export markets for their pro- 
duction of the commodity. 

(c) In any such agreement provision should 
be made, whether through the maintenance of re- . 
serve stocks or otherwise, for assuring the avail- 
ability of supplies adequate at all times for world 
consumption requirements at reasonable prices. 

(d) Provision should be made for insuring that 
there are increasing opportunities for supplying 
world requirements from countries able to supply 
such requirements most effectively. 

3. And finally, that an international commodity 
arrangement should remain in effect for a limited 
term, such as five years or less. Renewal should 
be conditioned upon a prior study and public 
report as to the manner in which it has conformed 
to these principles and as to progress that has 
been made in eliminating the underlying problem. 

Without entering upon a detailed examination 
of each of these principles, attention may be called 
especially to those provisions which place a joint 
responsibility upon the parties to an international 
commodity agreement for developing an accept- 
able program for removing the basic maladjust- 
ments in the industi'y so far as the causes for such 
maladjustments can be said to lie within the indus- 
try itself. 

In some cases the readjustment of the industry 
might require the reallocation of resources and 
the relocation of producers and workers in par- 
ticular producing areas. To effect these shifts, 
measures of technological and financial assistance 
may be needed to enable countries to establish new 
industries or expand old ones, to resettle and re- 
equip agricultural producers for the cultivation of 
commodities promising better incomes, and to ex- 
pand basic resources, such as transportation and 
electricity, for the development of industry and 
agriculture. The preparation and negotiation of 
the details of such programs would unquestion- 
ably be a matter of considerable complexity, in 
which national and international agencies, such as 
the proposed Organization for Food and Agricul- 
ture and the proposed International Bank for 
Keconstruction and Development, might be ex- 
pected to participate. 

In other cases it might be found that the re- 
quirement of a program to remove the basic causes 



642 



DEPARTMENT OF STATE BULLETIN 



of maliidjustnieiit in tlie industry could be sub- 
stantially satisfied by agreement to limit or elimi- 
nate various national measures to support com- 
modity prices and the incomes of primary pro- 
ducers, such as crop loans, guaranteed prices, ex- 
port subsidies, benefit payments to producers, im- 
port restrictions, and preferential trade arrange- 
ments. Such policies frequently protect high-cost 
pi'oduction and thus limit world markets for the 
products of more efficient producers. In this con- 
nection it should be pointed out that production 
or income subsidies to producers in importing 
countries tend in the same manner as export sub- 
sidies to increase production relative to demand 
and thus to depress world markets. Importing 
countries must, therefore, share with exporting 
countries the responsibility of bringing about a 
better balance of world production and consump- 
tion. It is quite possible that in some instances, 
particularly where world demand for the com- 
modity shows a normal secular rate of growth, in- 
ternational agreements to limit or reduce subsidies, 
import restrictions, and preferences would suffice 
to ease the problem satisfactorily and thus make 
other steps unnecessary. 

In general the basic objectives of our policy 
with regard to international agreements as to 
connnodities in chronic surplus supply are as 
follows : 

(a) To enable countries to find solutions to par- 
ticular commodity problems without resorting to 
unilateral action that tends to shift the burden of 
their problems to other countries and thus pro- 
vokes retaliatory measures and economic war- 
fare; 

(b) To prevent or to alleviate the serious eco- 
nomic and political problems which may arise 
when, owing to tlie difficulties of finding alterna- 
tive employment, production adjustments cannot 
be effected in a reasonable time by the free play 
of market forces ; 

(c) To provide a period of transition which, 
with the assistance of such national or inter- 
national measures as may be api)ropriate, w'ill 
afford opportunities for the orderly solution of 
l)articular commodity problems by agreement be- 
tween the {)articipating governments upon a pro- 
gram of over-al] economic expansion and adjust- 
ment designed to promote a shift of resources and 
manpower out of over-expanded industries into 
new and productive occupations. 



A proper function of international commodity 
agreements of this type should be to provide gov- 
ernments with facilities for reconciling their 
economic policies in respect of seriouslj' depressed 
branches of primary production with the broad re- 
quirements of an over-all program of interna- 
tional economic expansion. Their purpose should 
be to deal with cases of actual or imminent inter- 
national economic maladjustment of a serious 
nature. It is not intended that this form of inter- 
national economic cooperation should be deliber- 
ately fostered as a permanent method of organ- 
izing international production. Tliis, however, is 
not necessarily to say that there will be no need 
for maintaining a permanent international organ- 
ization to deal with such commodity problems; 
even under the most favorable conditions of ex- 
panding economy that may be reasonably pre- 
supposed, there would presumably still be 
individual cases of maladjustment serious enough 
to call for specific action in this field. 

Payments From Accounts of 
United States Citizens 

Amended Treasury General License No. 74, is- 
sued March 17. 1945. permits, in effect, the free 
operation of accounts of citizens of the United 
States who have taken up residence in a blocked 
country since December 1, 1944." 

Thus, representatives of American business con- 
cerns and other United States citizens who have 
located in liberated areas or other blocked coun- 
tries since December 1 of last year are no longer 
restricted in handling their accounts in the United 
States, solely as a result of their physical loca- 
tion. 

Activities in a blocked account which could not 
be effected without a license, had the citizen con- 
tinued to reside in the United States, are not 
permitted. 

The provision of the General License with re- 
spect to United States citizens who were located 
within blocked countries prior to December 1, 
1944 continues to be limited to withdrawals of 
$500 per month for personal expenses within the 
United States for themselves or families. Such 
persons may, of course, obtain funds for tlieir own 
living expenses abroad under General License 

No. 33. 
i 

' 10 Federal Register 2061. » 



APRIL 8, 1945 



643 



Meeting of the Committee 
Of Jurists 



ANNOUNCEMENT OF MEETING 

[Released to the press April 6] 

In accordance with the invitation extended by 
the Government of the United States acting on 
behalf of itself and the other governments spon- 
soring the United Nations Conference on Inter- 
national Organization at San Francisco, the Com- 
mittee of Jurists will convene in Washington on 
Monday, April 9.^ So far the following govern- 
ments have indicated their intention to be repre- 
sented at the meeting: Belgium, Brazil, Canada, 
China, Colombia, Costa Rica, Cuba, Czechoslo- 
vakia, Dominican Republic, Egypt, El Salvador, 
Ethiopia, France, Great Britain, Greece, Haiti, 
Honduras, Iran, Iraq, Liberia, Mexico, Nether- 
lands, New Zealand, Panama, Paraguay, Saudi 
Arabia, Turkey, the Union of Soviet Socialist 
Republics, and Uruguay. 

Green Hackworth, the Legal Adviser of the De- 
partment of State, will be the United States repre- 
sentative at this meeting, and he will be assisted 
by two advisers. Miss Mai'jorie Whiteman, As- 
sistant Legal Adviser of the Department of State, 
will serve as a special assistant to Mr. Hackworth. 

The Committee will hold its sessions in the In- 
terdepartmental Auditorium in the Department 
of Labor Building at Fourteenth Street and Con- 
stitution Avenue and in the committee rooms adja- 
cent to the auditorium. 

It is planned to hold the first plenary session of 
the Committee on Monday, April 9, at 11 a. m. 
The Secretary of State will open the meeting with 
a short address of welcome and will preside pend- 
ing the election of a chairman. This session and 
subsequent plenary sessions will be public, and 
the press and photographers will be permitted to 
be present. Business meetings of the Committee 
and of such subcommittees as may be established 
will be private. 

The chiefs of mission of all the United Nations 
have been invited to attend the opening session. 
It is expected that the members of the Delegation 
of the United States to the San Francisco confer- 
ence will attend, together with representatives 
of those groups especially interested in legal prob- 



' Bulletin of Apr. 1, 1945, p. 



533. 



lems and matters of international judicial organi- 
zation. 

An organization session of the Committee will 
be held in the auditorium on Monday afternoon 
at 3 p. m. 

In view of the shortness of time available for 
preparations, this Government will organize and 
staff the secretariat for the meetings of the Com- 
mittee. The following officers of the Department 
have been designated to positions on the secretariat 
as indicated: Principal Secretary, Mr. Lawrence 
Preuss; Protocol Officer, Mr. Stanley Woodward; 
Administrative Officer, Miss Louise White ; Press 
Officer, Mr. J. Kenly Bacon; Public Liaison Offi- 
cer, Mr. Francis H. Russell; and others to be 
named. Members of the technical secretariat will 
include Mr. John Maktos, Mr. John Halderman, 
Mrs. Alice McDiarmid, Mrs. Pauline R. Preuss, 
and Mr. Phil Neal of the Department of State. 
The general services of the international secre- 
tariat for the San Francisco conference will also 
be available on such matters as documents, trans- 
lations, and interjjreters. 

PLANS FOR OPENING SESSION 

[Released to the press April 7] 

Professor Philip C. Jessup, of the Columbia 
University Law School, and Mr. Charles Fahy, 
Solicitor General of the Department of Justice, 
will assist the American representative at the 
forthcoming meeting of the United Nations Com- 
mittee of Jurists. 

At the opening session on Mondaj% April 9, Dr. 
Wang Chung-Hui, Chinese representative on the 
Conunittee of Jurists and a former judge of the 
Permanent Court of International Justice and 
chairman of the Far Eastern Subcommittee of 
the United Nations War Crimes Commission, will 
respond to the opening greeting of Secretary of 
State Edward R. Stettinius, Jr. 

Sir Michael Myers, Chief Justice of New 
Zealand and Acting Governor General of New 
Zealand, will also make a brief response to the 
Secretary's remarks. 

Following the opening session, the official repre- 
sentatives on the Jurists' Committee will proceed 
to the Supreme Court building to attend a hear- 
ing of the Court and will then be the luncheon 
guests of Chief Justice Stone. 

Miss Marcia Maylott has been named Secretary 
to the Technical Staff. 



644 



DEPARTMENT OF STATE BULLETIN 



Operation and Disposal of 
Synthetic-Nitrogen Plants 

DISCUSSIONS WITH THE GOVERNMENT 
OF CHILE 

[Released to the press April 3] 

During the course of the Inter- American Con- 
ference on Problems of War and Peace at Mexico 
City, discussions were held between the United 
States and Chilean Delegations regarding the op- 
eration and disposal of sjoithetic-nitrogen plants 
owned by the Government of the United States. 

As a result of those discussions the Secretary of 
State informed the Minister of Foreign Affairs of 
Chile that it was not the intention of the Govern- 
ment of the United States that the production by 
the Government of synthetic nitrogen in plants 
owned by it and constructed for war purposes, 
should be continued be3'ond the period necessi- 
tated by the conditions or consequences of the war, 
except as might be necessary in order to maintain 
the i^lants in efficient operating condition for na- 
tional security from the point of view not only 
of physical condition but also for the purpose of 
continuing scientific research and technological 
progress. The Chilean Minister of Foreign Af- 
fairs was also informed that should it be necessary 
for the Government of the United States to modify 
this position, there would be consultation with 
the Government of Chile before action was taken. 

The Secretary of State also informed the For- 
eign Minister of the intention of the Government 
of the United States to consult with the Govern- 
ment of Chile with respect to such Government 
plants for the production of synthetic nitrogen, 
constructed for war purposes, as might not be 
dismantled, or converted to uses other than the 
production of synthetic nitrogen, or maintained 
for national security, if the terms or conditions of 
cession, sale, or lease of such plants to private in- 
terests might create serious problems affecting the 
production or exportation of Chilean nitrates. 
Such consultation would be for the purpose of 
reaching such accord with respect to those prob- 
lems as would, while protecting the interests of the 
United States Government, give due consideration 
to the effects upon Chile, particularly from the 
point of view of the competitive situation created 
by the terms or conditions of the cession, sale, or 
lease of those plants. 



Acceptance of 
Aviation Agreements 

[Released to the press April 7] 

His Excellency Jan Ciechanowski, Ambassador 
of Poland, has transmitted to the Acting Secre- 
tary of State for deposit in the Archives of the 
Government of the United States of America, with 
a note dated April 6, the instruments of accept- 
ance and ratification by the President of the Ke- 
public of Poland of the following documents con- 
cluded at the International Civil Aviation Con- 
ference in Chicago on December 7, 1944: 

Interim Agreement on International Civil 
Aviation, 

International Air Services Transit Agree- 
ment, and 

Convention on International Civil Aviation. 

The instruments of acceptance and ratification are 
dated at London on March 20, 1945. 



Philosopher Accepts Visiting 
Professorship to Brazil 

[Released to the press April 7] 

Irwin Edman, professor of philosophy at Co- 
lumbia University and author of many distin- 
guished works largely in the fields of lahilosophy 
of art and esthetic theory, left on April 5 for Bra- 
zil, where he has accept ed a visiting professorship 
in philosophy at the National University in Rio de 
Janeiro. His trip is sponsored jointly by the Bra- 
zilian Government and the Department of State 
of the United States. He will teach two courses 
at the University in Rio de Janeiro, one on the 
intellectual tradition in the United States and the 
other on the philosophy of art. 

Dr. Edman is a member of many learned so- 
cieties at home and abroad ; chairman of the jihi- 
losophy section of the radio program. Invitation 
to Learning/ a member of the editorial board of 
the American Scholar; an occasional writer of 
poetry; and a contributor to many literary re- 
views. The most recent of his numerous books are 
Landrnarhs in Philosophy and Boethius^ Conso- 
lation of Philosophy. 



APRIL 8, 1945 



645 



The Trade-Agreements Program in a System 
Of World Cooperation 



Address by BERNARD F. HALEY' 



[Released to the press April 4] 

The news tliat we have been reading in our 
papers for the past several weeks lias been good 
news indeed. From every battle-front come re- 
ports of rapid, vigorous, effective drives pushing 
our enemies continually fartlier back into their 
last defensive zones. AVe are all proud of the mag- 
nificent and successful effort our armed foi'ces are 
making. 

None of us here can say how soon the day of com- 
plete victory — the day of peace — will come. We 
know now, however, that it is coming, that it is 
certain. We know, in short, that we shall be able 
in the not distant future to realize the purposes 
to which we dedicated oui'selves in this war. 

We all know in a general way what those pur- 
poses are; we all know for what we have been 
fighting this war, what kind of a world we want 
and propose to live in when the war is over and 
peace has come. In simplest terms, I suppose 
that the kind of world we are determined to have 
is one in which we shall enjoy security and pros- 
perity. Security means the highest possible de- 
gree of freedom from aggression or threat of ag- 
gression. Prosperity means the full and 
productive use of our resources and abilities for 
the betterment of our material conditions and for 
the improvement of our standards of living. 

What I want to emphasize to you is that these 
two primary objectives — security and prosperity — 
are most intimately interrelated and must be 
sought through essentially the same methods. 
They are most intimately interrelated because one 
is inconceivable without the other. They must be 
sought by the same methods because if we have 
learned any lesson from this war and from the 
experiences between the two wars it is that our 
own security and prosperity cannot be divorced 
from the security and the prosperity of the rest 
of the world. Our goals can be reached only 
through international cooperation. 

Certainly no period better illustrates the close- 

' Delivered before the Export Managers' Club of New 
York in New York, N. Y., on Apr. 4, 1945. 



ness of the relation between prosperity and se- 
curity than the decade preceding the present 
World War. The misguided attempts of indi- 
vidual nations to preserve a dwindling prosperity 
by raising higher and higher barriers to trade 
with other nations were followed of course by 
retaliation in kind. Weaker nations resorted to 
or were forced by aggressive nations into bilateral 
bargains that were anything but bargains in fact. 
Quotas, preferences, discriminations, and all of 
the other ingenious devices for seeking special 
treatment of course had the total result of making 
everyone worse off than ever. More serious how- 
ever was the fact that these various methods of 
meeting the problems of the thirties gradually 
developed into what was nothing more nor less 
than economic warfare. And economic warfare 
created an atmosphere in which no nation felt 
secure — in which security as well as prosperity 
rapidly dwindled, and the stage was set for an- 
other world war. 

I am not one who would go all the way in accept- 
ing an economic explanation of war. It surely 
must be admitted however that political mirest 
and aggressive nationalism are inevitable con- 
sequences of economic i)olicies designed to better 
the material condition of a particular nation at the 
expense of other peoples of the world. Nations 
which are economically insecure or underpriv- 
ileged, especially if they feel that their plight is 
the result of discriminatory tactics by other 
nations, are inevitably more ready to resort to 
force in an attempt to remedy their condition than 
are nations which are reasonably secure in their 
material welfare and the inhabitants of which 
have fair and equitable opportunities to develop 
their resources and to exchange their products for 
things which they need and want from other 
countries. 

Finally, one other lesson we have learned from 
the unhappy events of recent years is that political 
dictatorship, which is a breeding ground for war 
and aggression, comes more easily into existence 
imder conditions of economic distress. Perhaps 



646 



DEPARTMENT OF STATE BULLETIN 



Germany would have gone to war in any case ; but 
surely it is true that the rise of the Nazis in the 
thirties was fostered in part by the economic dis- 
tress that characterized the Germany of that 
period. By and large it is true that peoples who 
are doing well economically and who have decent 
living standards are much slower to rise and fol- 
low dictators who make fantastic promises than 
are peoples who are not prosperous and do not 
have sound commercial relations with their neigh- 
bors. 

We cannot hope to have prosperity the world 
over without security, or security without pros- 
perity. The successful conclusion of the confer- 
ence scheduled to take place in San Francisco later 
this month should provide us with the machinery 
for the maintenance of peace and security in the 
post-war world. But this machinery will be of no 
avail, and our most earnest endeavors to maintain 
peace and security must come to naught, unless 
we and the other nations of the world develop the 
means of international economic cooperation and 
eliminate the principal sources of economic fric- 
tion between countries. If there is to be political 
and military peace, there must also be an end to 
economic warfare. 

We and other friendly nations have already 
promised to cooperate for the economic advance- 
ment of all. We promised this in the Atlantic 
Charter and in the United Nations Declaration. 
We promised it in our various lend-lease or mu- 
tual-aid agreements, where in article VII we and 
other signatory nations commit ourselves to take 
"agreed action" looking toward the elimination of 
discrimination and the reduction of barriers to 
trade among nations and to the expansion of pro- 
duction and employment throughout the world. 

We can begin in the veiy near future to co- 
operate financially in the reconstruction of war- 
torn areas of the world. As the world's greatest 
creditor nation, and as the only major nation 
emerging from this war with capital plant unim- 
paired and fully efficient, we are in a position to 
make a tremendous contribution toward world re- 
construction. Private, and also public, invest- 
ment abroad after the war will enable us to make 
this contribution. The export of capital is ac- 
companied and followed by the export of goods 
of all kinds. During the reconstruction period 
our physical exports will consist for the most part, 
other than relief supplies of food and clothing, of 



capital equipment and the products of heavy in- 
dustry. These are the things that are most ur- ' 
gently needed, but the world will want all kinds 
of American goods. 

No doubt we will continue for many years to 
finance a substantial proportion of our export 
trade by a continuing flow of investment abroad. 
If however we expect to receive a return upon 
these foreign investments of ours, we must in time 
expect to receive an increasing flow of imports of 
goods and services that will constitute the interest, 
dividends, and profits upon our foreign business 
ventures. For the immediate future, however, in 
the absence of adequate productive capacity in 
war-torn countries, we shall invest abroad and ex- 
port the goods required for reconstruction and de- 
velopment without expecting a corresponding re- 
turn flow of imports. 

One proposal for facilitating public and private 
foreign investment in the post-war period is the 
Bretton Woods proposal for a world bank for re- 
construction and development. This proposal de- 
serves your support. Unless we take positive 
action to facilitate foreign investment, we cannot 
even begin to cooperate in the job of world re- 
construction. 

Another proposal for international cooperation, 
which also emerged from the discussions at Bret- 
ton Woods, is the plan for establishing rules 
whereby nations would refrain from seeking to 
take advantage of each other in matters of cur- 
rency regulation and exchange, and would be as- 
sisted in establishing conditions under which it 
would be unnecessary for them to manipulate their 
currencies. 

Another proposal for cooperative international 
action is the proposed Food and Agriculture Or- 
ganization of the United Nations, the objective of 
which is to further the most efficient and produc- 
tive use of the world's food and agricultui-al re- 
sources and to assist in the realization of higher 
nutritional standards throughout the world. 

Other plans and proposals are under discussion. 
What I principally want to talk to you about, 
however, is the extent to which, and the manner in 
which, we can cooperate with other nations for 
the expansion of mutually advantageous interna- 
tional trade. The first, and the best, way in which 
we can cooperate to this end is by agreement to 
reduce or eliminate barriers to trade. This means 
to reduce tariffs, to eliminate preferences and 



APRIL 8, 1945 



647 



discriminations, and to get away from all restric- 
tions hampering the free flow of international 
commerce. 

It is easy enough for us to talk about coopera- 
tive undertakings to eliminate various kinds of 
trade barriers as long as we are talking about 
barriers for which we are not ourselves re- 
sponsible. The historical fact is, however, that 
the only species of trade barrier to which we have 
extensively resorted is our protective tariff. Con- 
sequently, if we expect other nations to eliminate 
preferences and discriminations and other restric- 
tions, we will have to remember that it takes two 
to cooi^erate, and that the only thing we can do 
whicli will make very much difference is to get to 
work seriously and energetically on the job of 
revising our tariff structure to encourage the flow 
of international trade. 

You may have expected that I would respond 
to your kind invitation to come here and address 
the Export Managers' Club by talking to you 
about exports. Instead I am going to talk frankly 
and seriously to you about imports. As I said 
betore, when speaking of the need for facilitating 
foreign investment, we cannot for long have an ex- 
pansion of exports without an expansion of im- 
ports. Over a period of time, the only way you 
can sell a large volume of goods to people who do 
not use your currency system is to work out some 
way of providing them with enough of your cur- 
rency so that they can buy your goods in the 
volume that you want to sell. One way to do 
that, of course, is to keep lending them your cur- 
rency without ever asking them to repay. The 
other way, and the only other way, of providing 
your potential customers with the necessary dollar 
exchange is to encourage the development of a 
substantial volume of United States imports. 
When we import we send dollars out of this coun- 
try. Those dollars shortly come home to roost in 
the form of demand for United States exports. 

This is one basic reason for encouraging a re- 
vision of our tariff structure; namely, that we 
cannot expect to develop our export trade if we 
put up barriers in the form of high tariffs to 
prevent potential customers abroad from getting 
the dollars needed to buy our exports. Equally 
important is the fact that if we want to persuade 
other nations to reduce or eliminate various ob- 
stacles imposed by them which prevent the free 
flow of United States goods into export markets 



ive must, as a negotiating Government, be pre- 
pared to offer those other nations some conces- 
sion on our part. The outstanding concession we 
can offer which will make any difference to the 
other nations of the world is a lowering of our 
tariff barriers. 

The mechanism which this Government has been 
employing successfully for more than 10 years to 
effect by negotiation the reduction of trade bar- 
riers hindering the expansion of our export in- 
dustries is the reciprocal trade agreement. Under 
the authority of the original Trade Agreements 
Act of 1934. the President was empowered to en- 
ter into negotiations with other countries designed 
to reduce in each case the most obnoxious bar- 
riers to trade. The bargaining weapon which we 
had in our hands was the authority granted under 
the act to reduce tariff rates on specific commodi- 
ties by as much as 50 percent. 

The trade-agreements program was a form of in- 
ternational economic cooperation. The record will 
show that it produced useful results. Through 
it we succeeded, notwithstanding the war and pre- 
war handicaps, in making it easier for American 
producers to sell their goods abroad and for Amer- 
ican consumers to obtain at more reasonable prices 
the foreign goods they needed to enhance 
their own standard of living. The negotiation 
of each of the 32 trade agreements entered 
into during the last 10 years yielded benefits to 
the bargaining countries in each case in the form 
of opportunities to sell exportable products in 
the market of the other country. Thus, the whole 
program has been effective in decreasing the bar- 
riers of other countries against our exports and in 
encouraging the expansion of our foreign trade 
and world commerce in general. 

We have here a tried and tested technique of 
international economic cooperation. The Trade 
Agreements Act, however, expires on June 12 of 
this year. Unless it is renewed, we shall no longer 
have the authority to use this proven technique. 

If, however, we are to do a really useful job 
in reducing barriers to our foreign trade and in 
increasing the two-way flow of commerce between 
this country and the rest of the world, we need 
something more than mere renewal of the existing 
Trade Agreements Act. Under the trade-agree- 
ments program, tariff rates have already been 
reduced by the full 50 percent permitted under the 
existing statute on about 42 percent of our duti- 



648 

able imports on the basis of 1939-value figures. 
The rates on many other commodities have been 
reduced substantially, but by something less than 
the full 50 percent. Finally, there are some com- 
modities on the dutiable list on which tariff con- 
cessions -would not make very much difference. 
It is easy to see, therefore, that even if the trade- 
agreements legislation were to be extended for 
another three years in its present form we would 
not be able to do enough under it in the way of 
negotiating for the reduction or elimination of 
trade barriers imposed by other nations. 

The bill, H.R. 2652, which was recently intro- 
duced into the Congress by Representative Robert 
L. Doughton, Chairman of the House Ways and 
Means Committee, provides not only for a three- 
year extension of the President's authority to ne- 
gotiate reciprocal trade agreements, but also re- 
plenishes our bargaining power by authorizing 
tariff reductions by up to 50 percent of the rates 
in effect on January 1, 1945 instead of 50 percent 
of the rates in effect in 1934 when the original 
act was passed. In other words, the Doughton 
bill brings the trade-agreements legislation up to 
date by basing our bargaining power upon present 
facts instead of upon the facts of 1934. 

In this connection, it has sometimes been said 
that what the Doughton bill proposes is to au- 
thorize the President to reduce tariff rates by 75 
percent instead of 50 percent. This is not really a 
correct interpretation of the bill. Obviously, on 
those commodities on which no tariff reductions 
have been made in the course of the trade-agree- 
ments program, the 1945 rates are the same as the 
1934 rates, so the authority to reduce them is 
limited to reductions of 50 percent. Such com- 
modities represent roughly one third of our du- 
tiable imports. Similarly, for commodities on 
which tariff reductions of less than the full 50 
percent have been made under the trade-agree- 
ments program (and such commodities represent 
roughly one fourth of our dutiable imports), the 
new authority under the Doughton bill would per- 
mit reductions of less than 75 percent from the 
1934 rates. The actual authority to reduce rates 
by 75 percent from the 1934 level would be appli- 
cable only to those commodities on which reduc- 
tions by the full 50 percent have already been made 
under the previous trade-agreements legislation. 
In his message of March 26 to the Congress, 
recommending adoption of the Doughton bill, the 
President said, in part : 



DEPARTMENT OF STATE BULLETIN 

". . . the reciprocal trade-agi-eement program 
represented a sustained effort to reduce the bar- 
riers which the nations of the world maintained 
against each other's trade. If the economic foun- 
dations of the peace are to be as secure as the po- 
litical foundations, it is clear that this effort must 
be continued, vigorously and effectively." ^ 

In his message on the Bretton Woods proposals 
the President pointed out that there are many 
economic problems to be solved by the United 
Nations after the war and that proposals would be 
submitted to Congress not only on financial and 
currency-exchange matters but on the Food and 
Agriculture Organization of the United Nations, 
the "broadening and strengthening of the Trade 
Agreements Act of 1934, international agreement 
for the reduction of trade barriers, the control 
of cartels and the orderly marketing of world 
surpluses of certain commodities", and other 
matters.^ 

The renewed and strengthened trade-agree- 
ments program and other aspects of our program 
for economic cooperation fit into the whole struc- 
tui-e of international cooperation as envisaged at 
Dumbarton Oaks in the plan which includes an 
Economic and Social Council to coordinate inter- 
national efforts in the economic and social fields. 
For, as I have said earlier, the success of the Pro- 
posals worked out at Dumbarton Oaks and the 
success over the years to come of the plans to be 
made in San Francisco will depend in part upon 
the degree of success we achieve in working out 
techniques for international economic cooperation, 
in removing sources of international economic 
warfare. 

The maintenance of world peace will depend on 
the attainment of a reasonable degree of economic 
well-being in all nations, and on harmonious, equi- 
table, and mutually advantageous commercial re- 
lations among them. Maximum production, 
exchange, and utilization of goods and services 
contribute to such relations, and the reduction of 
discriminations and barriers in trade in turn 
makes possible the expansion of international 
commerce. 

Continued and expanded efforts under the 
trade-agreements program are not the only mech- 
anism of international economic cooperation 
available to us. As I have pointed out, there are 

' BinxEiiN of Apr. 1, 1945, p. 531. 
= BcxLETiN of Feb. 18, 1945, p. 222. 



APRIL 8, 1945 



649 



many other ways in which we can and must co- 
operate with other nations. The trade-agree- 
ments program, however, is something with which 
we have had reasonably long and successful expe- 
rience. All of us here know that we are prepared 
to cooperate in economic matters and that our own 
self-interest — our determination to build the 
world of the future on the firm bases of security 
and jJrosperity — requires us to cooperate. One 
way in which we can insure that the rest of the 
world will realize this is to continue and to ex- 
pand our trade-agreements work. 

Relinquishment by Spain of 
Representation of Japanese 
Interests in the United States 

EXCHANGE OF NOTES BETWEEN THE 
DEPARTMENT OF STATE AND THE 
SPANISH EMBASSY 

[Released to the press April 4] 

March 27, 1945. 

The Spanish Embassy presents its compliments 
to the Department of State and has the honor to 
duly advise, that on Saturday, March 24th the 
"Ministerio de Asuntos Exteriores" in Madrid 
notified this Embassy by telegraphic Circular that 
all activity was to be suspended in relation to the 
Protection of Japanese interests in the United 
States. 

The above "Ministerio" also adds in the Circular 
that it will forward by telegraph the name of the 
nation who in the future is to have charge of this 
Protection. 

The Spanish Embassy wishes to inform the De- 
partment of State that the above orders have been 
complied with, and all the respective Spanish Con- 
sulates in the United States have been advised to 
do the same. 



March 30, 1945. 
excellenct : 

I have the honor to refer to the Embassy's note 
no. 165 of December 15, 1941 informing the De- 
partment that the Japanese Government had re- 
quested the Spanish Government to assume the 
representation of Japanese interests in the United 
States and expressing the hope that such repre- 



sentation would be agreeable to this Government. 
I also refer to a note dated December 17, 1941 in 
which the Government of the United States ex- 
pressed its agreement to the representation by the 
Spanish Government of Japanese interests in the 
United States. 

I now perceive that according to the Embassy's 
memorandum no. 42 (Ex. 80.000) of March 27, 
1945 the Embassy has upon instructions from the 
Spanish Government suspended all activity in re- 
lation to the representation of Japanese interests 
in the United States. I also note that all Spanish 
Consulates in the United States have been simi- 
larly instructed and that the Embassy will be in- 
formed at a later date regarding the name of the 
Government which in the future will have charge 
of such representation. 

The Department of State is informing the ap- 
propriate agencies of the United States Govern- 
ment accordingly of the relinquishment by the 
Si^anish Embassy of the representation of Jap- 
anese interests in the United States. 

Accept [etc.] 

For the Secretary of State : 

Julius C. Holmes 
His Excellency 

Sehor Don Juan Francisco de Cardenas, 
Ambassador of Spain. 

TELECOMMUNICATIONS— Con/mued/roTO page 604. 

international telecommunications services. It is 
opi^osed to complete merger, and does not consider 
that an adequate case has been made for partial 
merger. If any merger is undertaken, it hopes 
that it will be so limited as to permit competition 
between the different kinds of service, including 
competition between the cables and radiotelegraph, 
and that such exceptions may be made, even to 
this rule, as to provide for special cases. 

It believes that the most serious problems con- 
fronting us can be satisfactorily dealt with with- 
out sacrificing the benefits that accrue from com- 
peting operations between American enterprises. 
It has accordingly proposed that the Congress pro- 
vide by api:>ropriate means for unifying the con- 
trol of national policy in international telecom- 
munication. In this manner it believes that we 
can retain the benefits of our characteristically 
American methods and deal effectively with other 
countries, without adopting their patterns of eco- 
nomic life. 



650 



DEPARTMENT OF STATE BULLETIN 



Dumbarton Oaks Proposals: Agenda for 

San Francisco 



Address by CLYDE EAGLETON ' 



[Keleased to the press April 7] 

I have recently had the privilege of addressing 
Bar Association groups in six cities — Cleveland, 
Detroit, Chicago. St. Louis, Shreveport, and New 
Orleans — and I enjoyed these meetings so much 
that I welcomed the opportunity of similar dis- 
cussion with the Boston Bar. It was not only 
that these groups were composed of able and in- 
telligent persons, who could carry on the discus- 
sion at a high level ; what impressed me more was 
the fact that leading citizens in these various com- 
munities recognized their responsibility for taking 
an informed and intelligent position on what I 
regard as the most important problem which has 
ever faced the American people. It is not surpris- 
ing that lawyers especially have accepted this 
responsibility, for they have a particular interest 
in the maintenance of law and order anywhere. 

On this recent trip, I had the pleasant com- 
pany of Mr. Mitchell B. Carroll, chairman of the 
Section of International and Comparative Law 
of the American Bar Association, and the discus- 
sion of the resolutions which he presented on each 
occasion added to the information and interest 
of each audience. All of these groups have now, 
I believe, sent in letters to the Secretary of State 
supporting the Dumbarton Oaks Proposals in 
general and making varied suggestions as to par- 
ticular points therein. At all of these meetings, 
too, I found evidence of the wide-spread influence 
of Judge Manley O. Hudson, whose habitat is 
in this vicinity, though I do not venture to call 
him a Bostonian, and who with his usual enormous 
energy has been devoting his time to discussions 
of the proposed Organization, and particularly of 
the Court. 

My part in tfiis meeting I understand to be a 
presentation of the Dumbarton Oaks Proposals 
for your consideration. It is intended that these 
Proposals should be so considered, by the Ameri- 
can people and by all peoples. It was for this pur- 

' Delivered before the Bar Association of the city of 
Boston on Apr. 7, 1945. Mr. Eagleton is in the Division 
of International Organization Affairs, Office of Special 
Political Affairs, Department of State. 



pose that they were made public and for this 
reason that I am authorized to address you. I 
hope, however, to hear your own views expressed, 
for the Department is eager to learn what you 
think of the plan. 

The Dumbarton Oaks Proposals furnish a state- 
ment of the structure and principles of an inter- 
national organization such as the American people 
have called for. They were prepared by expert 
representatives of the four powers, and recom- 
mended by them to their respective governments. 
They were then made public by these jjowers, for 
study and discussion by the peoples of all coun- 
tries. After account has been taken of the reac- 
tions, criticisms, and suggestions made, a final 
charter will be drafted by all of the United Na- 
tions in a conference which, under the agreement 
reached at the Crimea Conference, will be held 
in San Francisco on April 25. When this Charter 
has been finished, it will be submitted for ratifica- 
tion in accordance with the constitutional proc- 
esses of each nation. It is hoped that, as a result 
of this careful consideration, there will be enough 
agreement to insure prompt acceptance by the 
various nations. 

The proposed Organization is not a superstate. 
It is based upon the "sovereign equality of 
states" — a phrase taken from the Connally reso- 
lution adopted by the Senate. This does not 
mean, however, as some seem to fear, that national 
sovereignty will be carried to such an extreme 
that members will refuse to accept obligations and 
thereby impede international cooperation. On 
the contrary, each member, under the Dumbarton 
Oaks Proposals, will accept more definite obliga- 
tions than under the League of Nations, though 
these obligations are few and carefullj- defined. 
Nor does it mean, of course, that every state will 
carry the same weight and influence in the Organ- 
ization. The independence of every member state 
is preserved, and each has the same protection 
before the law as any other. 

The Organization would be open to membership 
by all peace-loving states, but no state would be 



APRIL 8, 1945 



651 



forced to accept membership in the proposed 
system. However, under the Proposals, no state, 
whether a member or not, would be permitted to 
use force or threat of force inconsistent with the 
purposes of the Organization; no state would be 
allowed to escape the consequences of its aggres- 
sive action on the ground that it was not a mem- 
ber. On the other hand, the gains of membership 
are clearly to be seen. It is hoped, therefore, that 
the advantages of membership will be so apparent 
and the disadvantages of non-membership so ob- 
vious that all peace-loving states will be per- 
suaded to join. 

The purposes and principles of the new Organi- 
zation are stated in chapters I and II. Its pur- 
poses I summarize in these two quotations: "To 
maintain international peace and security", and 
'"To achieve international cooperation in the solu- 
tion of international economic, social and other 
humanitarian problems". 

In order to assui'e realization of these purposes, 
certain principles are stated which may be sum- 
marized as follows: The Organization would be 
based on the princij^le of sovereign equality of all 
peace-loving states ; its members would undertake 
to fulfil the obligations assumed by them in ac- 
cordance with the Charter; they would agree to 
settle their disputes by peaceful means and to 
refrain from the threat or use of force in any 
manner inconsistent with the purposes of the Or- 
ganization ; they would agree to assist the Organi- 
zation in any action undertaken by it in accordance 
with the provisions of the Charter, and to refrain 
from assistance to any state against which enforce- 
ment action is being undertaken by the Organiza- 
tion. Finally, it is stated as a principle that non- 
member states should be subject to control by the 
Organization in so far as may be necessary for 
the maintenance of international peace and 
security. 

With regard to the structure of the Organiza- 
tion, there would be a Security Council, a General 
Assembly, an International Court of Justice, a 
Secretariat, and various subordinate or specialized 
agencies. 

Let us look more closely at the two chief or- 
gans, the General Assembly and the Security 
Council, and in connection with each examine the 
way in which their respective functions would be 
performed. It is to be noted that, in the Dum- 
barton Oaks Proposals, unlike the Covenant of 
the League, a clear differentiation of function is 



made between the Council and the Assembly. The 
Security Council, as its name indicates, is to have 
primary responsibility for the maintenance of 
international peace and security. The field of the 
General Assembly is cooperative effort in political, 
economic, and social matters, and the adjustment 
of situations likely to impair the general welfare. 
While the Assembly has the right to discuss any 
questions relating to the maintenance of peace and 
security, decisions as to enforcement action must 
be left to the smaller Security Council, which can 
act more swiftly and decisively. The effort to 
maintain peace and secui'ity might be embarrassed 
if there were two organs independently making 
recommendations for that purpose. 

The General Assembly would be composed of 
representatives of all members. Under the Dum- 
barton Oaks Proposals it is planned as a demo- 
cratic and representative body, in which each state 
would have one vote, and in which the rule of 
unanimity would not prevail as it did under the 
League of Nations. For ordinary action of the 
Assembly a bare majority would suffice; for deci- 
sions in a number of specified matters a two- 
thirds majority would be required. Among these 
matters which would require a two-thirds ma- 
jority would be recommendations with regard to 
the maintenance of international peace and secu- 
rity ; election of members of the Security Council 
or of the Economic and Social Council ; admission, 
or suspension of the rights of, or expulsion of 
members; and budgetary questions. 

The proi^osed Assembly cannot be regarded as 
a legislative body, in the sense of making laws 
which are binding upon member states. It is in- 
tended rather to study and discuss constantly the 
international angles of social and economic prob- 
lems and to make recommendations to member 
states for their acceptance and common action. 

As I said a moment ago, economic, social, and 
humanitarian matters belong exclusively to the 
Assembly, which is to oversee all activities in these 
fields. While this effort is a very important func- 
tion in itself, we may note in passing that it con- 
tributes toward peace and security in that it looks 
toward the creation of those conditions of stability 
and well-being which are necessary for peaceful 
and friendly relations among nations. This is the 
field of "peaceful change", of "removing the causes 
of war". 

In order to see how this work is to be done, it 
will be easier if we consider fii-st another part 



652 



DEPARTMENT OF STATE BULLETIN 



of the proposed system. Nations have become so 
interdependent, and their economic and social 
relationships so complicated, that there is an in- 
creasingly recognized need for specialized agen- 
cies, each to deal with a certain particular prob- 
lem. Some such agencies existed, of course, before 
the war, such as the Universal Postal Union, the 
Bank for International Settlements, or the Inter- 
national Labor Organization ; and of course many 
such functional agencies were set up by the League 
of Nations as parts of the League system. Others 
are now being planned. A conference in London 
last year discussed the establislament of an inter- 
national organization for educational and cul- 
tural cooperation; at Brett on Woods, plans were 
adopted for an International Monetary Fund and 
an International Bank for Reconstruction and 
Development; at Chicago, jilans for an aviation 
organization were approved, to be established as 
soon as 20 states have approved the constitution. 
The Food and Agriculture Organization is already 
being set up. Studies are being made with re- 
gard to other fields, such as trade, commodities, 
communication, health, and others, in which inter- 
national cooperation or administration is needed. 
Each of these would be a separately organized 
institution with a charter shaped according to its 
own needs, and varying in range and authority. 
Each would be planned to have, and would in- 
creasingly develop, experience and expertness in 
its own field. 

Having this picture in mind, we may now move 
a step back toward the General Assembly. Ob- 
viously the difficulty with these specialized agen- 
cies would be lack of coordination, without which 
there might be overlapping and confusion of func- 
tions and consequent impairment of efficiency. It 
is therefore provided that the various specialized 
agencies are to be brought into relationship with 
the general international Organization by agree- 
ments made between each such agency and the 
Economic and Social Council and approved by the 
General Assembly. 

The Economic and Social Council would be cre- 
ated to assist the General Assembly in coordinat- 
ing the activities of these specialized agencies, and 
also to make recommendations with respect to in- 
ternational economic, social, and other humani- 
tarian matters. It would also receive and con- 
sider reports from the specialized agencies, ex- 
amine their budgets, supply information, and in 



general perform such functions as might be as- 
signed to it by the General Assembly. 

The Economic and Social Council is to consist 
of representatives of 18 countries elected every 3 
years by the General Assembly, and it would act 
under the direction and authority of the Assembly. 
Like the Assembly, it would not be a legislative 
body; it could only recommend, and leave to the 
member states themselves the carrying out of the 
recommendations. The Economic and Social 
Council is authorized to set up expert commis- 
sions in economic, social, and other such fields. 
These commissions would be responsible for the 
collection and analysis of information, and would 
serve as advisory bodies for the Economic and 
Social Council and for the Assembly. 

Thus we come back to the General Assembly, 
which, aided by the Economic and Social Council, 
and by the coordinated efforts of the specialized 
agencies, has the responsibility for facilitating 
solutions of international economic, social, and 
other humanitarian problems and for promoting 
respect for human rights and fundamental free- 
doms. It is a wide and hopeful field of endeavor, 
limited only by the willingness of human beings 
to cooperate to these ends. With your aid in 
making the American people aware of the needs 
and opportunities in the community of nations, 
we could hope for large progress toward the goal 
of creating conditions conducive to stability and 
well-being among nations, conditions essential to 
peaceful and happy relations between the peoples 
of the world. No greater opportunity for leader- 
ship was ever given to any people than is now 
offered the American people, and if they will take 
this opportunity they can achieve, through use of 
the machinery just described, social and economic 
advance of the greatest benefit to mankind. 

I turn now to the Security Council, whose func- 
tion and primary responsibility is the maintenance 
of peace and security. Since the Security Council 
has this responsibility, it is so constituted as to 
give to the great powers most capable of taking 
effective action against an aggressor a position 
commensurate with the burden and risk which they 
must assume. In the structure and procedure of 
the Security Council, recognition is given to the 
principle that the weight and influence of mem- 
bers in the task of maintaining international peace 
and security should be commensurate with ability 
and responsibility in the performance of this func- 



APRIL 8, 1945 



653 



tion. This principle seems to be generally ac- 
cepted, though of course there would be variation 
of opinion as to the method by which it should be 
implemented. 

Certain states are designated as permanent mem- 
bers of the Council. In this respect, it resembles 
the Council of the League of Nations, and also in 
that the permanent members do not constitute a 
majority of the Council. There are to be 11 places 
on the Security Council, of which 5 are to be 
permanently held by 5 designated states: the 
United States of America, the United Kingdom of 
Great Britain and Northern Ireland, the Union 
of Soviet Socialist Republics, the Republic of 
China, and in due course, France. The other 6 
members are to be elected for 2-year terms by the 
General Assembly. 

The procedure for voting in the Security Coun- 
cil constituted a difficult problem, which was, as 
you know, finally worked out at the conference in 
the Crimea. The solution there agreed upon pro- 
vided that each member of the Security Council 
should have 1 vote, and that decisions on pro- 
cedural matters should be made by an affirmative 
vote of any 7 members. Decisions of the Security 
Council on all other matters should be made by 
an affirmative vote of 7 members including the con- 
curring votes of all the permanent members, except 
that in decisions relating to the pacific settlement 
of disputes between nations a party to a dispute 
should abstain from voting. 

Tliis was explained by Secretary Stettinius as 
being a differentiation between ''the quasi-judicial 
function of promoting pacific settlement of dis- 
putes", and the "political functions of action for 
maintenance of peace and security". In the 
former case, pacific settlement of disputes, "no 
nation, large or small, should be above the law" ; 
in the latter case, ''a difference is made between 
the permanent members of the Council and other 
nations for the practical reason that the perma- 
nent members of the Council must, as a matter of 
necessity, bear the principal responsibility for 
action". 

To explain this formula in more specific terms, 
no nation which is a party to a dispute would be 
allowed to vote in the Security Council when the 
Council is considering such matters as these: 
Whether the Council should take up a case 
and investigate to see whether its continuance 
might endanger peace ; whether the Coimcil should 
call upon the parties to settle their dispute by 



means of their own choice, or should reconunend 
methods and procedures of settlement ; or whether 
disputes should be referred to the General Assem- 
bly or to a regional agency, or whether legal 
aspects of disputes should be referred to the Court. 

On the other hand, unanimous consent among 
the permanent members of the Council would be 
required in such matters as the determination that 
a threat to or breach of the peace exists, or the 
use of enforcement measures, or approval of 
agreements to be made concerning the supply of 
forces to be made available to the international 
Organization, or the regulation of armaments, or 
the suspension and expulsion of members or the 
admission of new members. 

The functions of the Security Council are 
mostly those of maintaining the peace, and I turn 
now to the provisions looking to this end, which 
are found in chapter VIII. The maintenance of 
peace calls for the peaceful settlement of disputes. 
I have already noted that the Assembiy is to pro- 
mote conditions under which disputes would not 
arise, and it is to be hoped that it can in this way 
assist greatly in removing causes of war. How- 
ever, I think we can count upon the appearance of 
some disputes, and provision should be made for 
handling them. 

When a dispute does arise, the disputants are 
obligated to settle it "by peaceful means in such 
a manner that international peace and security 
are not endangered". Members are not required 
to settle all disputes, any more than individuals 
are under our law ; but, if they do undertake the 
settlement of a dispute, it must be done in a way 
which will not endanger peace and security, and 
they cannot in any case resort to force to bring 
about a settlement. Tliis is an important point, 
and an advance over the League of Nations Cove- 
nant, under which is was sometimes possible for 
a state to use force for its own purposes. Under 
the Dumbarton Oaks Proposals, a state may be 
called upon to use force in support of enforce- 
ment action undertaken by the Organization, but 
it is obligated not to use force for any other pur- 
pose. It is the purpose of the Organization to 
develop a peaceful society of nations, witliin wliich 
law and justice could grow. 

The first stage in the procedure provided for 
pacific settlement of disputes is that states should 
settle by means of their own choice any dispute the 
continuance of which is likely to endanger the 



654 



DEPARTMENT OF STATE BULLETIN 



maintenance of peace. Among the means which 
the disputants can employ are negotiation, medi- 
ation, conciliation, arbitration, reference to 
the International Court of Justice, or perhaps to 
regional means of adjustment. Disputes do not 
go ab initio to the Council, and in this first stage 
the Council has no power to take over the dispute 
and prescribe a settlement. If the disputants 
cannot settle it by means of their own choice, they 
must refer it to the Council. The Council, more- 
over, is authorized then to intervene at any stage of 
a dispute to ascertain whether it is likely to de- 
velop into a threat to the peace, and if and when 
the Council decides, as it may do at any time, 
that a threat to the peace exists, it may "take any 
measures necessary for the maintenance of inter- 
national peace and security in accordance with the 
purposes and principles of the Organization." 

A very flexible procedure for the adjustment 
and settlement of disputes is thus provided. The 
Security Council is not itself a primary agency for 
settling disputes ; its function is to encourage and 
recommend settlement, rather than to impose a 
settlement, and to keep constant vigilance lest 
failure to settle a dispute should produce danger 
to peace. 

Let us now consider what the Security Council 
can do after it has decided that a threat to the 
peace or an act of aggression has appeared. In 
this stage its authority is gi-eat, for it represents 
the determination of peoples everywhere that war 
should not be permitted again to devastate the 
world. The Council could recommend measures 
of settlement and require their acceptance, if such 
action were found necessary to end a threat to the 
peace. It could use diplomatic pressure or call for 
economic sanctions, and members would be obli- 
gated to assist in such measures; and finally, it 
could, if it should prove necessary, call for the use 
of armed force to prevent or repress the use of 
force by a determined aggressor. 

The eilect of the provisions for voting in the 
Security Council upon these procedures may be 
described as follows. Any state, or the Secretary 
General, could bring to the attention of the Secur- 
ity Council any situation or dispute which it 
thinks might lead to international friction; and 
there is nothing in these provisions which could 
prevent any party to such a dispute or situation 
from receiving a hearing before the Council and 
having the case discussed. I may add that the 



General Assembly also would have an untram- , 
melcd right to discuss any such dispute or situa- 
tion. 

When we proceed beyond discussion to the stage 
of decision, no party to a dispute, whether a per- 
manent member or not, would be permitted to 
vote on questions relating to the peaceful settle- 
ment of disputes. In such decisions, that is, de- 
cisions concerning peaceful settlement, the re- 
quired majority of 7 must include those perma- 
nent members which are not parties to the dispute. 
In other words, a permanent member which is a 
party to the dispute would have no veto, but any 
permanent member which is not a party to the dis- 
pute would have a veto, if it should care to exer- 
cise it. Looking at it in another way, if no per- 
manent member is involved in the dispute, the 
affirmative vote of each of the 5 permanent mem- 
bers would be required for the Council to take any 
decisions or action on that dispute. 

When the next stage is reached, that of deter- 
mining whether a threat to or breach of the peace 
is involved and deciding upon the measures of 
enforcement which might follow thereafter, the 
concurrence of all permanent members would be 
required, in all cases, whether any one of them 
is a party to the dispute or not. 

At this point I am sure the question is in your 
mind: Where is the Security Council to obtain 
the armed forces required for the suppression of 
aggression ? The answer provided in the Dumbar- 
ton Oaks F'roposals is : from the armed forces of 
member states. Members would be obligated to 
make contingents available from their own na- 
tional foi'ces upon the call of the Security Coun- 
cil, when as a last resort it appears that enforce- ' 
ment measures are necessary. The types and 
numbers of soldiers which each state would be 
obligated to supply have not yet been decided, and 
will be stated in agreements later to be negotiated. 
W^ith regard to these agreements, Secretary Stet- 
tinius said, in a recent article in the Reader'' s Di- 
gest^ that "Each state will determine its own in- 
ternational contribution of armed forces through 
a special agreement or agreements signed by itself 
and ratified by its own constitutional processes." "■ 

The forces to be made available to the Security 
Council for common action against an aggressor 
would thus be provided from the national armies 



^ Bulletin of Jan. 28, 1945, p. 117. 



APRIL 8, 1945 



655 



of member states, each in accordance with an obli- 
gation voluntarily assumed by itself. It may be 
noted also that, for the purpose of urgent military 
measures, members would agree to hold immedi- 
ately available certain contingents of air forces, 
ready for combined international enforcement 
action. 

Plans for the use of these armed forces would 
be made by the Security Council with the assist- 
ance of a Military Staff Committee composed of 
the Giiefs of Staff of the permanent members of 
the Security Council, or their representatives. 
Members not permanently represented on the 
Committee would be invited by the Committee to 
be associated with it when the efficient discharge 
of the Committee's responsibilities would require 
the participation of such a state in its work. The 
^Military Staff Committee would be responsible for 
planning the use of, and for the strategic direction 
of, these armed forces contributed by members. 

Finally, it is to be noted that regional arrange- 
ments or agencies may share in the settlement of 
disputes and in enforcement action, provided al- 
ways that these regional arrangements are con- 
sistent with the purposes and principles of the 
Organization, and provided that no enforcement 
action may be luidertaken under them except as 
authorized by the Security Council. 

The third principal organ of the international 
Organization would be an international court of 
justice, in which, I am sure, you are especially in- 
terested. Unfortunately, little can be said con- 
cerning the Court as yet. The Dumbarton Oaks 
Proposals make it clear that there is to be such a 
Court and that the Statute of the Permanent 
Court of International Justice should be continued 
in force, or used as a basis for a new statute. It 
is provided, also, that -all members of the Organ- 
ization should ipso facto be parties to the Statute 
of the Court. A conference of jurists has been 
called to meet in Washington on April 9 to put the 
statute into shape before the Conference assembles 
at San Francisco. 

I have now given you a general picture of the 
Organization : The Security Council, a small and 
effective body with great authority in the field of 
security and able to take rapid decisions ; the Gen- 
eral Assembly, meeting in regular annual sessions, 
with an unlimited field of direction and recom- 
mendation, but without legislative power; the 
Economic and Social Council, continuously at 
work on international social, economic, and hu- 



manitarian problems under the supervision of the 
General Assembly; and the various specialized 
agencies, each working expertly in its own field 
and with their activities coordinated under the 
direction of the General Assembly ; and the Inter- 
national Court of Justice. Ample machinery is 
thus provided through which states can act to- 
gether efficiently for their common good if they 
wish to do so; and no system will succeed unless 
its members sincerely support it and are willing 
to work continuously for it. 

I shall not take time to discuss the Secretariat, 
which will, however, be a very important part of 
the system. 

A procedure of amendment is provided in chap- 
ter XI, by which amendments initiated by a two- 
thirds vote in the Assembly become effective when 
ratified by the members having permanent seats on 
the Security Council and by a majority of the 
other members of the Organization. 

Finally, the last chapter provides for two im- 
mediate problems. One of these is the mainte- 
nance of peace during the period until the agree- 
ments have been concluded by which national 
armed forces will be made available to the Security 
Council. The four powers signatories to the Mos- 
cow Declaration agree to consult with each other 
for this purpose, looking toward action on behalf 
of the Organization. The other is the problem 
of dealing with defeated enemy states, and it is 
provided in the second paragraph of chapter 
XII that "No provision of the Charter should pre- 
clude action taken or authorized in relation to 
enemy states as a result of the present war by the 
Governments having responsibility for such ac- 
tion." This means in effect that the international 
Organization would not in the beginning have 
responsibility for the enforcement of the peace 
terms upon the enemy states. This responsibility 
would be undertaken by the Allied Powers. 

I am glad to have had the opportunity of pre- 
senting this plan for you, and happy to find you 
interested in it. As we read the newspapers every 
day and learn daily of new horrors of modern war, 
we indignantly and fervently say that this can 
never be allowed to happen again. But war is an 
ancient and strongly established institution, and 
it cannot be eliminated by wishful thinking. It 
will require concentrated effort and vigilant sup- 
jiort by the American, and all other, peoples for 
the Organization which is to bring war under 
contx'ol; and I sincerely hope that the interest 



656 

■which is manifested by your presence today will 
continue, and that your leadership will support the 
new Organization and help to solve the numerous 
problems which it will face in the years to come. 

Inter-American Institute of 
Agricultural Sciences 

Honduras 

The Director General of the Pan American 
Union informed the Secretary of State, by a let- 
ter dated March 26, that on March 19 the Ambas- 
sador of Honduras deposited with the Pan Ameri- 
can Union the instrument of ratification by the 
Government of Honduras of the Convention on 
the Inter-American Institute of Agricultural 
Sciences, which was opened for signature by the 
Ajnerican republics on January 15, 1944. The 
Honduran instrument of ratification is dated Feb- 
ruary 20, 1945. 

Agreement Between the 
United States and Cuba for 
Purchase of Sugar and 
Industrial Alcohol 

[Released to the press April 5] 

The Department of State announced on April 5 
that an agreement has been reached by the Cuban 
Sugar Stabilization Institute and the Commodity 
Credit Corporation for the latter to purchase the 
bulk of Cuba's 1945 sugar crop at 3.10 cents a 
pound, f.o.b. Cuban ports. Cuba will make avail- 
able to the Commodity Credit Corporation all its 
1945 sugar in excess of 400,000 tons, of which 
250,000 tons have been reserved for local use in 
Cuba and 150,000 tons for exportation to other 
countries, primarily the other American republics. 

In addition, the Department of State announced 
the conclusion of an agreement by the Foreign 
Economic Administration calling for the purchase 
of 70 million gallons of blackstrap molasses at 13.6 
cents f.o.b. Cuban ports for the production of in- 
dustrial alcohol. The Foreign Economic Admin- 
istration is also buying substantial quantities of 
190-proof industrial alcohol at 65 cents a gallon. 
Through the Institute, Cuban producers are con- 
tracting to ship a minimum of 20.5 million gallons 



DEPARTMENT OF STATE BULLETIN 

of industrial alcohol to the United States with an 
option to ship additional quantities estimated at 
about 7.5 million gallons. 

Although no definitive agreement had previ- 
ously been reached between the Cuban sugar indus- 
try and the Commodity Credit Corporation, Cuba 
has been making its sugar available to the United 
States for two months under a provisional ar- 
rangement, thus continuing a steady supply from 
the island. 

Study of Organization of the 
Merchant Marine by 
Panamanian Official 

[Released to the press April 7] 

Senor Joel Medina, Director of the Shipping 
and Consular Section of the Ministry of the Treas- 
ury of the Republic of Panama, is making a study 
of the general organization of the Merchant Ma- 
rine of the United States as a guest of the De- 
partment of State. While in the United States, 
he will observe in particular the systems of reg- 
istration for the Merchant Marine. 

The Shipping Division of the Department of 
State is arranging an itinerary for Senor Medina 
that will include various ports so that he may get 
a general picture of conditions. Part of his two 
months' visit will be spent at Washington in con- 
ference with Government agencies. 

SOL BLOOM— Continued from page 623. 

best insurance of success. It sometimes seems to 
me almost incredible that our civilization, which 
has produced the amazing technical developments 
of this century, has not had the genius to estab- 
lish a world order in which this inventive skill 
will be used to satisfy the highest aspirations of 
man, rather than to maim and kill him ! Yet that 
is the point where we now stand in history. 

President Roosevelt said nearly 10 years ago 
that this generation of Americans had a rendez- 
vous with destiny. Such a rendezvous with des- 
tiny will begin on the other side of this continent 
15 days from now. I rejoice that at our side, in 
this critical hour, will be a man with the steady 
wisdom, the lofty ideals, and the long experience 
of your Representative in the Congress of the 
United States — the Honorable Sol Bloom. 



APRIL 8, 1945 



657 



Exportation of Powers of 
Attorney 

Powers of attorney and certain other instru- 
ments relating to interests in estates and the main- 
tenance, management, or sale of real estate or 
tangible personal property in blocked countries, 
when executed or issued by a person within the 
United States who is not a national of a blocked 
country, may now be sent abroad under Treasury 
General License No. 89, issued March 17, 1945.^ 

The new General License provides that any in- 
strument to be sent abroad contain an express 
stipulation (a) that the person authorized to act 
under it is not empowered to engage in any trans- 
action with an enemy national as defined in Treas- 
ury General Ruling No. 11 other than exempted 
transactions, and (b) that authority to sell may 
not be exercised with respect to property located 
in a country not included in the United Nations 
if the value of the property exceeds $5,000 or the 
equivalent in foreign currency. 

The term "tangible personal property" as used 
in the new General License does not include cash, 
bullion, deposits, credits, securities, patents, or 
copyrights. 



THE CONGRESS 



^ THE FOREIGN SERVICE ^ 

Confirmations 

On April 5, 1945 the Senate confirmed the nomi- 
nation of Fletcher Warren as American Ambas- 
sador to Nicaragua. 



^ THE DEPARTMENT ^ 



Appointment of Officers 

Alger Hiss as Director of the Office of Special 
Political Affairs, effective March 19, 1945. 



' 10 Federal Register 2962. 



The Dumbarton Oaks Proposals and the League of Na- 
tions Covenant, by Herbert Wright, Professor of Inter- 
national Law, the Catholic University of America. S.Doc. 
33, 79th Cong, ii, 38 pp. 

Second Quarterly Report on "War Mobilization and Re- 
conversion : Letter from the Director of Office of War 
Mobilization and Reconversion transmitting a copy of 
the Second Quarterly Report in accordance with the War 
Mobilization and Reconversion Act setting up his office. 
H.Doc. 137, 79th Cong, ii, 47 pp. 



PUBLICATIONS 



Departme^tt of State 

Toward the Peace — Documents. Publication 2298. 40 
pp. 150. 

What About the Enemy Countries? A Radio Broadcast 
by the Department of State, March 24, 1945. Publication 
2291. 20 pp. Free. 

Armistice: Agreement Between the United States of 
America, the Union of Soviet Socialist Republics, and the 
United Kingdom and Bulgaria Together With Protocol 
and Related Papers — Agreement and Protocol signed at 
Moscow October 28, 1944 ; effective October 28, 1944. Ex- 
ecutive Agreement Series 437. Publication 2305. 22 pp. 
10?!. 

Double Taxation : Convention and Protocol Between the 
United States of America and the French Republic — 
Signed at Paris July 25, 1939; proclaimed by the President 
of the United States of America January 5, 1945 ; effective 
January 1, 1945. Treaty Series 988. 27 pp. 100. 

The Proclaimed List of Certain Blocked Nationals. Cu- 
mulative Supplement No. 2, April 6, 1945, to Revision IX 
of February 28, 1945. Publication 2313. 30 pp. Free. 

Foreign Commerce Weekly 

The article listed below will be found in the April 7 
issue of the Department of Commerce publication en- 
titled Foreign Commerce Weekly, copies of which may be 
obtained from the Superintendent of Documents, Govern- 
ment Printing Office, for 10 cents each: 

"Brazil's Sugar Industry" by Hubert Maness, vice con- 
sul, American Embassy, Rio de Janeiro, and Ulrich H. 
Williams, formerly agricultural analyst at the American 
Embassy, Rio de Janeiro ; now in the United States Navy. 



U. S. GOVERNMENT FRINTINC OFFICE: I9«f 



^58 DEPARTMENT OF STATE BULLETIN 



(Contents — continued 

Post-Wab Matters — Continued. ^^^^ 

United Nations Conference on International Organization- 
Continued. 

Announcement of Various Foreign Delegations 609 

Tlie American Farmer's Stalie in World Cooperation. Inter- 
view Witti Assistant Secretary Clayton 020 

"Building the Peace". It's Your State Department 629 

Meeting of the Committee of Jurists : 

Announcement of Meeting 643 

Plans for Opening Session 643 

Treaty Information 

Results of Economic Negotiations With Switzerland 601 

Marine Transportation and Litigation. Australia 621 

Merchant Shipping. Australia, France 628 

Relinquishment of Extraterritorial Rights. Canada-China . 637 
Agreement Between the United States and Cuba for Pur- 
chase of Sugar and Industrial Alcohol 656 

Acceptance of Aviation Agreements. Poland 644 

Inter-American Institute of Agricultural Sciences. Hon- 
duras 656 

The Depabtment 

Appointment of Officers 657 

The Foreign Ser\t:ce 

Confirmations 657 

Publications 657 

The Congress 657 



7 
THE DEPARTMENT OF STATE 

^ r 




U 



J 



J . 



-I 



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VOL. XII, NO. 303 



APRIL 15, 1945 



A GREAT TRAGEDY Has Come to America and to the World. A Great 
Leader Has Passed on Into History at an Hour When He Was Sorely Needed. 

Once Before in an Hour of National Crisis, Our Country Suffered Such a 
Loss. Like Abraham Lincoln, Franklin Delano Roosevelt Has Truly Given His 
Life That America Might Live and Freedom Be Upheld. Like Him He Piloted 
Our Country With High Wisdom and Courage Safely Through the Darkest Perils 
Almost to the Shore of Security and Peace. ' 

Now He Is Gone. There Are No Words Which Can Express the Depth of the 
Sorrow That All Americans Feel Tonight. 

As We Face the Future We Can Draw From Our Grief the Living Memory of 
That Unshakeable Courage With Which Our Great President Met Every Per- 
sonal and National Danger. No Man Ever Had a Deeper and Stronger Faith 
in America. In That Faith He Died. In That Faith and With That Spirit of 

Courage We Must Carry on. 

EDWARD R. STETTINIUS, JR. 

April 12, 1945 



^©NT o^ 




-*^tes o^ 



a S. SUPJI^INTENDEHT OF DCCUf,;£NTS 



THE DEPARTMENT OF STATE 



BULLETIN 



Vol. XII • No. 303 , w!^W • POBLICATIOB 2318 




April 15, 1945 



The Department of State BULLETIN, 
a weekly publication compiled and 
edited in the Division of Research and 
Publication, Office of Public Affairs, 
provides the public and interested 
agencies of the Government tcith 
information on developments in the 
field of foreign relations and on the 
work of the Department of State and 
the Foreign Service. The BULLET IIS 
includes press releases on foreign 
policy issued by the White House and 
the Department, and statements and 
addresses made by the President and 
by the Secretary of State and other 
officers of the Department, as well as 
special articles on various phases of 
international affairs and the functions 
of the Department. Information con- 
cerning treaties and international 
agreements to which the United States 
is or may become a party and treaties 
of general international interest is 
included. 

Publications of the Department, 
cumulative lists of which are published 
at the end of each quarter, as well as 
legislative material in the field of inter- 
national relations, are listed currently. 

The BULLETIN, published with the 
approval of the Director of the Bureau 
of the Budget, is for sale by the Super- 
intendent of Documents, United States 
Government Printing Office, Washing- 
ton 25, D, C, to whom all purchase 
orders, with accompanying remittance, 
should be sent. The subscription price 
is $3.50 a year; a single copy is 10 
cents. 



MAY 7 1945 







ontents 



In Memoriam Franklin D. Roosevelt ^^se 

Proclamation by the President of the United States ... 661 

Statement by the Secretary of State front cover 

Tributes: 

Statement by Cordell Hull 662 

Messages to the Roosevelt Family 662 

Messages to President Truman 664 

Messages to the Secretary of State 665 

Resolution by the Pan American 668 

Message of the Committee of Jurists 668 



Africa 

Death of Minister of South Africa: 

Message From President Roosevelt to the Officer Ad- 
ministering the Government of the Union of South 

Africa 674 

Message From the Secretary of State to Field Marshal 

Smuts 674 

American Republics 

Pan American Day. Remarks by the Secretary of State . . 669 
Decision by American Republics To Resume Diplomatic 

Relations With Argentina 670 

The Inter-American System and a World Organization. 

Address by Assistant Secretary Rockefeller 675 

Visit of the Director of the Haitian Red Cross 692 

The Americas Look Ahead. Address by Assistant Secretary 

Rockefeller 693 

Security and Inter-American Relations. Address by Pierre 

de L. Boal 708 

Europe 

American Prisoners of War in Germany. Joint Statement 

by the Secretary of State and the Secretary of War . . 683 
Anniversary of Nazi Attack on Denmark and Norway. 

Statement by President Roosevelt 684 

Inquiries on American Citizens in Rumania 697 

Far East 

Statement Concerning the "Awa Mam" 692 

Cultural Cooperation 

Visit of Colombian Educator 692 

Selection of Chinese Biologist To Visit United States . . . 714 
Economic Affairs 

Operations of UNRRA. Second Quarterly Report .... 684 
Consideration of Resumption of Exports From France to 

the United States Through Private Channels .... 691 
Questions Concerning the Problems of American Small 

Business. Statement by Assistant Secretary Clayton . 698 

Statements of Cargo Availability 713 

PosT-W.^R Matters 

". . . united in our resolve". Statement by the 

Secretary of State 669 

Statement by President Truman 669 

United Nations Conference on International Organization: 

Statement by the Secretary of State 671 

The People's Commissar for Foreign Affairs of the 

U. S. S. R. To Attend Conference 671 

National Organizations Invited To Serve as Consultants 

to the American Delegation 671 

{Conlinued on page 717) 



By the President of the United States of America 
A PROCLAMATION 

TO THE PEOPLE OF THE UNITED STATES: 

It has pleased God in His infinite wisdom to take from us the 
immortal spirit of Franklin Delano Roosevelt, the 32nd President 
of the United States. 

The leader of his people in a great war, he lived to see the 
assurance of the victory but not to share it. He lived to see the 
first foundations of the free and peaceful world to which his life 
was dedicated, but not to enter on that world himself. 

His fellow countrymen will sorely miss his fortitude and faith 
and courage in the time to come. 

The peoples of the earth who love the ways of freedom and of 
hope will mourn for him. 

But though his voice is silent, his courage is not spent, his faith 
is not extinguished. The courage of great men outlives them to 
become the courage of their people and the peoples of the world. 
It lives beyond them and upholds their purposes and brings their 
hopes to pass. 

Now, therefore, I, Harry S. Truman, President of the United 
States of America, do appoint Saturday next, April 14th, the 
day of the funeral service for the dead President, as a day of 
mourning and prayer throughout the United States. I earnestly 
recommend the people to assemble on that day in their respective 
places of divine worship, there to bow down in submission to the 
will of Almighty God, and to pay out of full hearts their homage 
of love and reverence to the memory of the great and good man 
whose death they mourn. 

In witness whereof I have hereunto set my hand and caused 
the seal of the United States to be affixed. 

Done at the City of Washington, the 13th day of April, in the 
year of our Lord, one thousand nine himdred and 
[seal] forty-five, and of the independence of the United 
States, the one hundred and sixty-ninth. 

Ha HEY S. Teuman 

By the President : 

Edward E. Stetttnius, Jr. 
Secretary of State 

The White House 

Washington, April 13, 19^5 



661 



662 



DEPARTMENT OF STATE BULLETIN 



Tributes 



I was utterly stunned by the shattering news of 
the President's death. No greater tragedy could 
have befallen our country and the world at this 
time. His inspiring vision, his high statesman- 
ship, and his superb leadership were factors with- 
out which the United Nations could not have come 
to the present phase of the war with victory just in 
sight. That leadership is gone. But his vision 
and the spirit of his statesmanship must continue 



to inspire us for the crucial task which even now is 
before us — the task of building a world peace. 

Mankind will be vastly poorer because of his 
passing. 

The President and I were intimate associates, 
for many years, in the conduct of our country's 
foreign relations. We were friends of long stand- 
ing. His death is a tremendous personal loss to 

"^^- CoRDELL Hull 



MESSAGES TO THE ROOSEVELT FAMILY' 



All my heart's sympathy goes out to you, to Mrs. 
Boettiger, and to all of the family at this hour 
of sorrow in which the world shares. You know 
without words in w'hat measure I feel your loss 
and with what complete faith and understanding. 
W. L. Mackenzie King 
Prime Minister of Canada 

I learned with jjrofound sorrow of the terrible 
blow that has fallen upon you and your family. 
It has been a great shock to me personally and I 
know this feeling will be shared by all the people 
of France. They will always recall with emotion 
and gratitude the immense services President 
Roosevelt rendered to the cause of humanity 
throughout all that, tormented period which pre- 
ceded the war and part that he took in the achieve- 
ment of victory, an aim for which he fought so 
valiantly and with such personal sacrifice and 
abnegation. 

Henri Bonnft 
French Ambassador 



friend. Please accept the heartfelt expression ot 
profound condolences on behalf of the Italian na- 
tion and the sentiments of my personal sorrow. 
Alberto Tarchiani 
Italian Ambassador 

Profoundly shocked to hear news of your sudden 
and gi-ievous loss. We send you and your family 
our very deepest sympathy in what is not only a 
personal sorrow but one felt by the President's 
many friends and admirers. His going from us 
at this moment is a tragedy for the whole world. 

Earl of Athlone 
Governor General of Canada 

Deeply shocked and touched, I hasten to send to 
you with the homage of my respect the expression 
of my most profound condolence on the occasion 
of the decease of your illustrious husband, whereby 
the United States loses its most brilliant statesman 
and America and the world, the hero of peace and 
of justice. 

Eatael L. Trujillo Molina 
President of the Dominican Republic 



The passing of the 
great President has 
caused deep consterna- 
tion to the Italian peo- 
ple who have lost in him 
a true an d generous 

' Released to the press b.v 
the White House Apr. 12 
and 13. 



President Roosevelt died suddenly of a 
cerebral hemorrhage at 4 : 35 p.m. eastern 
war time on April 12, 1945 at his summer 
cottage in AVarm Springs, Georgia. 



I am shocked to learn 
of the sudden demise 
of President Roosevelt. 
He stood for the high- 
est ideals and hopes of 
the liberty loving peo- 
ples everywhere. His 
hatred of aggression 



APRIL 15, 1945 

and his love of peace, justice and fair dealing be- 
tween nations made him an outstanding leader in 
our present common struggle. He was a great 
friend of Chma and his friendship has always 
been treasured by the whole Chinese people. His 
death is an irreparable loss not only to the United 
States but to China and the world as well. In 
this hour of your bereavement I beg to send you 
my heartfelt condolences. 

V. K. Wellington Koo 
Chinese Ambassador to Great Britain 

No woi'ds at my command can express my feel- 
ings of deepest sorrow at the passing of your hus- 
band or my sense of the overwhelming loss the 
United States and the world have sustained in the 
death of such a great and noble leader. In the 
cause of freedom, democracy and human progress 
to you, who have shared so lovingly and devotedly 
his life and his life's work and who so loyally stood 
and fought side by side in every good cause, I send 
my most sincere and lieartfelt sympathy and that 
of all the people of New Zealand who welcomed 
you so cordially in 1943. New Zealand greatly 
esteemed the President for his outstanding, en- 
lightened and inspiring world leadership and will 
always hold his memory and his mighty achieve- 
ments for mankind in highest honour. He will 
ever remain enshrined in the hearts of our people, 
as in the hearts of the multitudes everywliere, as a 
truly great and good man who gave his life in help- 
ing to save mankind from tyranny, fear, aggres- 
sion, war insecurity, destitution and all the terrible 
forces of evil and in leading his own country and 
the world towards a brighter future of reason, co- 
operation, peace, security, goodwill and love. May 
Divine Providence give you and all the members of 
your family comfort and strength in your dark 
hour of bereavement and sorrow. May the mem- 
ory of a great life nobly lived with great, noble and 
lasting results uphold you and yours. 

Peter Feaser 
Prime Minister of New Zealand 

We ask you to accept our most heartfelt sympa- 
thy in your great bereavement. We shall never 
forget President Roosevelt's kindness to us and 
the deep impression he made on us during our visit 
in 1938. 

Crown Prince and Crown Princess of Sweden 



663 

Deeply shocked and grieved at this terrible 
calamity. I offer you and your family my most 
heartfelt sympathy in your great sorrow. 

Queen Mart 

Deeply shocked by tragic news of sudden death 
of the President. I respectfully beg to offer to you 
and the members of your family, also in name of 
my M-ife, our sincerest condolences and deep sym- 
pathy with this irreparable loss. The whole world 
will mourn the death of a statesman who has given 
his life in the interest of the entire humanity and 
who will go down in history as one of the greatest 
leaders of the American nation. The Netherlands 
grieve the loss of a staunch friend whose memory 
will always be deeply revered. 

Alexander Loudon 

Netherlands Ambassador to the United States 

I send you my deepest sympathy in your great 
sorrow. The world mourns with you at the death 
of America's great son. 

Haakon VII 
King of Norway 

The Queen and I are deeply grieved and shocked 
by tlie news of President Roosevelt's death. In 
him humanity has lost a great figure and we have 
lost a true and honoured friend. On behalf of all 
my peoples I send our most heartfelt sympathy to 
you and to the members of your family. 

King George of Great Britain 

I am extremely grieved to learn of the tragic 
death of President Roosevelt. This indeed is a 
tremendous loss to the civilized world. President 
Roosevelt's achievements will not only be ever re- 
membered by your own people, but also they will 
live always in the memory of the Chinese Nation. 
His name and his ideals shall be a beacon of light 
to humanity for centuries to come. Just as there 
are no words adequate enough to praise his contri- 
butions to the world, so we find ourselves devoid 
of expression in mourning his loss. The profound 
sorrow of the Chinese people is intensified by a 
deep sense of gratitude that they bear for him. 
President Roosevelt has firmly laid the foundation 
for a lasting peace as well as for the ultimate vic- 
tory of the allied forces. I am confident that his 
unfinished tasks will be faithfully carried on and 



664 

soon completed by his successor and the great 
people of iVmerica with the support of the Allied 
Nations. May I pray that you find consolation in 
this faith of mine. I am asking my wife to convey 
to you our condolences in person. 

Generalissimo Chiang Kai-shek 

Deeply grieved by the passing away of the Presi- 
dent. I hasten on behalf of the people and gov- 
ernment of the Philippines to express to you and 
to the members of your family our heartfelt sym- 
pathy. The name of President Roosevelt so dear 
to all of us will always be remembered with affec- 
tion, admiration and gratitude in the Philippines. 

Sergio Osmena 
President of the Philippines 



DEPARTMENT OF STATE BULLETIN 

Profoundly shocked by the unhappy news of the 
decease of Mr. Roosevelt. I express to you and 
to your children by this means my sincere mani- 
festations of condolence and those of the people of 
Costa Rica who are with you in these moments of 
grief. I renew to you my sentiments of high con- 
sideration and remain, your respectful servant. 

Teodoro Picado 
President of the Republic of Costa Rica 

Please accept my sincerest condolation for the 
loss of your beloved husband and the democratic 
leader of the world. 

Manuel Adriano Vilanova 

Vice President of the Republic of El Salvador 



MESSAGES TO PRESIDENT TRUMAN' 



The unexpected and sorrowful word of the pass- 
ing of the President brings to our heart a profound 
sense of grief born of the high esteem in which we 
held this renowned statesman and of the friendly 
relations which he fostered and maintained with us 
and with the Holy See. To the expression of our 
condolences we join the assurance of our prayers 
for the entire American people and for their new 
President to whom we extend our fervent good 
wishes that his labors may be efficacious in leading 
the nations at war to an early peace that will be 
just and Christian. 

Pope Pius XII 

It is with the most profound regret that I have 
received the news of the death of President Roose- 
velt and I hasten to convey to you, Mr. President, 
my deepest sympathy in this great loss which has 
befallen the Government and people of the United 
States of America. This regret will be shared by 
all my peoples who have long since felt that under 
President Roosevelt's wise and understanding 
leadership the problems of war and of the peace 
that is to follow were in the hands of one who had 
proved himself in so signal a manner to have at 
heart the welfare of mankind. It is especially 
grievous that at this moment when the forces of 
the Allies are bringing to a close the evil which 
has for so long overshadowed the continent of 
Europe the knowledge and wise counsel of Presi- 
dent Roosevelt should be taken from us but his 



' Released to the press by the White House Apr. IS. 



knowledge wise counsel and decisive action will 
forever be reanembered and the people of the 
United States may rest assured that his name 
will find a lasting place in the hearts of all my 
peoples. 

I^NG George of Great Britain 

I have learned with profound regret of the death 
of President Roosevelt and I offer you my deepest 
sympathy in the sorrow which has befallen you 
and the whole American people. 

Douglas Hyde 
President of Eire 

On behalf of the Government, of Dail Eireann, 
and of the people of Ireland I wish to express our 
deep sorrow on the death of President Roosevelt 
and our very great sympathy with his family and 
witli the American people in the calamity which 
has befallen them. America has lost a great man 
and a noble leader. 

May God give solace and strength to liis family 
to bear their great trial. 

Eamon de Valera 
Pnme Minister of Eire 

With deepest regret I heard the sad news of the 
sudden death of President Roosevelt. I beg your 
excellency to accept my most sincere sympathies, 
also from the Government and the people of 
Liechtenstein. 

Prince Franz Joseph of Liechtenstein 



APRIL 15, 1945 



665 



MESSAGES TO THE SECRETARY OF STATE 



Accept the expression of my sincere condolence 
on the occasion of the passing of President Roose- 
velt. It is a great loss not only for the American 
people but also for all of the United Nations, 
which know well of the outstanding part he had 
in the organization of the defeat of our common 
enemy as well as his exclusive concern for the 
future peace and security of the nations. The 
Soviet people will always remember how much 
Franklin Delano Roosevelt has done for the 
strengthening of Soviet American amity. 

V. MOLOTOV 

Soviet Commissar for Foreign Affairs 

The death of President Franklin Delano Roose- 
velt is an incalculable loss for mankind at the 
hour in which the moment is approacliing for 
definitive decisions to be made on the peace and 
security of the free peoples. I beg you to accept 
the sincerest expressions of my profomid sorrow. 

P. Leao Velloso 
Brazilian Minister of Foreign Relations 

I cannot describe to Your Excellency the pro- 
found sensation of grief produced in the people 
and the Government of Colombia by the death of 
President Roosevelt, who will figure in the history 
of the American nations as the founder of a new 
policy under the effect of which the continent has 
become united in friendship for the welfare of its 
inhabitants and against any foreign danger. 
Mankind will not find any way to take the place 
adequately of the influence of him who was one of 
its greatest intellectual and moral leaders, and we 
Americans can only replace it by our permanent 
adherence to the principles which made of Roose- 
velt a liberator of the globe. For Your Excellency, 
bound so closely to the President by ties of friend- 
ship, admiration and esteem, this American mis- 
fortune must be even more grievous. Accept, 
Excellency, together with my own expressions of 
condolence, those of my Government, which can 
scarcely interpret those of the Colombian people. 

Alberto Lleeas 
Colomhian Minister of Foreign Relations 



Please accept for my Government and myself 
our deepest sympathy for the great loss which 
your Government has just sustained by the demise 
of your illustrious President. 

Gabriel L. Dennis 
Liberian Secretary of State 

We have learned with the deepest regret the 
tragic news of the death of President Roosevelt. 
His passing is a blow to the free peoples of all the 
countries of the world. Democracy had no greater 
friend, and his inspiring leadership in its cause 
will ever be remembered. He was the ardent 
champion of the underprivileged, not only in his 
own country but everywhere. His contribution 
towards lifting the world out of the depression was 
unsurpassed. His wise measures and kindly coun- 
sel were listened to and were to the benefit of all 
the people of all countries. We here in New Zea- 
land will ever cherish a grateful memory of his 
friendship and inspiration both before and during 
the present world war. His guidance of his coun- 
try during the prewar period and the early years 
of the war came second only to his unparalleled 
contribution after the United States entered the 
conflict. Lend Lease among other epoch making 
conceptions will keep his memory green in all 
countries that have been saved by its help. His 
decisions as Commander in Chief of the United 
States Forces have made a major contribution in 
the direction of the conflict towards the victoiy we 
hope soon to enjoy. Like earlier great leaders he 
has led the world towards the victory that will 
make possible peace among the Nations, but he 
will not be here to enjoy the fruits of the work 
which he has done. He was a citizen of the world 
in the gi-eatest and truest sense and his death is an 
irreparable loss to the cause of freedom. 

To Mrs. Roosevelt and her family, to his col- 
leagues in the Government, and to all United States 
citizens, the Government and people of New Zea- 
land and its Island territories extend their sym- 
IDathy at the loss of a gi"eat son of a great people. 

Walter Nash 
Acting Prime Minister of New Zealand 

' Released to the press Apr. 13 and 14. 



666 

I was both deeply shocked and grieved when the 
tragic news of the death of the President reached 
me a few moments ago. 

I do not wish to lose a single moment without 
conveying to you the expression of my sincerest 
sympathy and the part I take in the sorrow of the 
American people before such a great loss which 
will affect not only the United States but the whole 
world. 

May I ask you to be the interpreter of these 
sentiments near Mrs. Roosevelt, presenting to her 
my respects and my condolence in her bereave- 
ment. 

Juan de Cardenas 
Spanish Ambassador 

On the occasion of the death of President Roose- 
velt I ask you to accept in the name of the Luxem- 
bourg Government and in my name the expression 
of our deepest condolences. The tragic need of 
the passing in the moment of victory of the great 
champion in the struggle for right against might 
fills every Luxembourger with sorrow and sym- 
pathy. The name of this great friend of our 
country will live forever in the memory of our 
people. 

Joseph Bech 
Prime Minister of Luxembourg 

Allow me to associate myself most sincerely to 
the pain of the United States and the United Na- 
tions as well as to the personal one of Your Ex- 
cellency for the passing away of President Roose- 
velt, one of the greatest misfortunes suffered by 
the world in our terrible times. President Roose- 
velt M'ill enter into history as the most illustrious 
of the heroes of this war for mankind and liberty 
for whose sake he sacrificed his life. 

C. Pakra Perez 
Foreign Minister of Venezuela 

We have just learned the news of the sad death 
of the great citizen of the world who for several 
years has been the center of the attention, the 
respect and the devotion of mankind. The mis- 
fortune which today grieves the United States of 
America likewise affects and to a like extent our 
country, the continent and the world since Frank- 



DEPARTMENT OF STATE BULLETIN 

lin D. Roosevelt was above everything and up to 
the moment of his death the champion of great 
causes. Understanding to its full extent the sig- 
nificance of such a grievous event I send to Your 
Excellency in the name of the President of the 
Republic, the Government of Cuba and in my own 
name the assurances of our profound condolences. 

Gustavo Cuervo 
Cuban Minister of State 

Still under the indescribable and extremely pain- 
ful surprise caused me by the death of the Hon- 
orable President Roosevelt I beg Your Excellency 
to accept the sincere expression of my deepest 
sympathy for such a sad occurrence which deprives 
your glorious nation of one of its most illustrious 
rulers the American continent of the creator of the 
Good Neighbor PolicT and the whole world of the 
most admirable defender of himian liberties. 
IManuel a. Pena Batlle 
Dominican Secretary of State 
for Foreign Relations 

I am profoundly shocked to hear the sad news 
of the death of Mr. Roosevelt, late President of 
the United States of America. Please accept my 
sincere condolences and kindly convey same to 
Mrs. Roosevelt and to all members of the famil}' 
of the deceased. 

Ali Homayocndjah 
Acting Foreign Minister of Iran 

The Government and the people of Lebanon 
share unanimously in the mourning which so 
cruelly strikes the Government and people of the 
United States in the person of His Excellency 
President Roosevelt. In the name of the Gov- 
ernment and the people of Lebanon and in my own 
I beg Your Excellency to accept our condolences 
for the loss of an eminent man who, faithful in- 
terpreter of the ideas of his country, had given to 
Lebanon ever complete, sincere and disinterested 
support, and whose absence will be unanimously 
deplored by the United Nations at the time when 
the discussion relative to the future of the world 



opens. 



Henri Pharon 

Lebanese Foreign Minister 



APRIL 15, 1945 



667 



The people of Iceland most sincerely share the 
deep sorrow -which now fills the hearts of all free- 
dom loving nations at the death of the man who 
sacrificed his whole life in the fight for freedom 
and equality and has now given his last strength 
in the service of the most important victory ever 
won by mankind, a victory which no man has 
contributed more towards than the great states- 
man the world is now bereaved of. Allow me 
to express my own and the Icelandic Govern- 
ment's deepest regret to yourself and the people 
of the United States at the death of President 
Roosevelt. 

Olafub Thoks 
Minister of Foreign Affairs of Iceland 

Profoundly moved I have the honor to address 
Your Excellency to express the deep sentiments 
of sorrow felt by the Government and people of 
Venezuela at the unexpected passing of President 
Roosevelt. Such an unfortunate occurrence hap- 
i:)ening at the time when the Allied arms are on 
the point of crowning their efforts in behalf of 
liberty with the most splendid victory ever known 
constitutes an irreparable loss not only for the 
American peojjle but also for the cause of the 
United Nations which had in that man one of their 
most unselfish champions, because of his generosity 
of spirit and idealism which made him one of the 
apostles of democracy to the point of sacrificing 
his life, because of his concern when he saw the 
danger to the existence of the peoples for whose 
benefit he had placed at the disposal of the world 
the resources of his country with the happy results 
now apparent, and because of his unshakable faith 
in the rule of justice and his love of peace. The 
passing of this famous statesman is a universal 
misfortune and his memory will be imperishable in 
the recollection of the generations. Venezuela, 
which like all the countries of America saw in the 
distinguished departed President the founder of 
a new era of mutual cooperation in their relations 
with your famous country, joins with the United 
States in its grief and through the intermediary 
of Your Excellency sends to your Government and 
the American nation its sincere message of con- 
dolence. Receive, Excellency, the assurances of 
my highest and most distinguished consideration. 
Roberto Picon Lares 

Venezuelan Acting Minister of Foreign Affairs 



It is with the most profound emotion that I 
as well as the members of the Provisional Govern- 
ment of the French Republic share in the grief of 
Your Excellency and of the Government of the 
United States. The glorious work accomplished 
by the illustrious statesman who has just passed 
on already brings to the nations of the world the 
promise of an early victory. United to the Ameri- 
can people by the bonds of an indestructible 
friendship the French people in sharing its grief 
keeps forever the memory of him in whom were 
incarnated in the most tragic hours of its history 
the principles of liberty and the ideal of democ- 
racy. 

Georges Bidault 
French Foreign Minister 

In this tremendous loss sustained by the Ameri- 
can Nation no less than by the United Nations I 
hasten to express to you, Mr. Secretary, my pro- 
foundest sympathy and deepest regret. 

Adam Tarnowski 
Polish Minister for Foreign Affairs 

I beg to express to American nation and Gov- 
ernment on behalf of Permanent Court of Inter- 
national Justice deepest sorrow at great loss 
America and world have suffered in death of great 
President Roosevelt. 

Gustavo Guerrero 
President of the Permanent Court of 
International Justice 

In my name and in that of the Argentine Chan- 
cellery will Your Excellency have the goodness 
to accept my profound sentiment of grief for the 
death of the illustrious President Franklin D. 
Roosevelt, a great American, a promoter of the 
moral and material forces of civilization in defense 
of the principles which are the basic foundation 
of human existence. The unexpected death of His 
Excellency President Roosevelt has affected the 
sentiments of the Argentine people. It marks a 
time of great grief for America which loses in him 
one of its most distinguished sons. I beg Your 
Excellency to accept the expression of my most 
sincere condolence by which I share in the grief 
which affects the people and Goveriunent of your 
great sister nation. 

Cesar Ameghino 
Argentine Acting Minister of Foreign Relatione 



640738 — 45- 



668 

Profoundly affected by the lamentable decease 
of His Excellency Franklin D. Roosevelt, Presi- 
dent of your great friendly nation in the name of 
the people and the Government of Guatemala 
and my own I express to Your Excellency the 
assurances of deep grief for the irreparable loss of 
so eminent a statesman great fi-iend of America 
and very exalted exponent of the democracies of 
the world. I renew to Your Excellency the assur- 
ances of my highest and most distinguished con- 
sideration. 

GtJILLERMO TORIELLO 

Guatemalan Minister of Foreign Relations 
MESSAGE OF COMMITTEE OF JURISTS 

[ReleaBcd to the press .\pill 13] 

At the Committee of Jurists meeting on April 
13 Dr. Wang Chung-hui, Representative of China, 
expressed the following message of condolence on 
behalf of the Committee : 

"May I be allowed to express to our Chairman, 
the honourable delegate of the United States, and, 
through him, to the American Government and 
people our heartfelt condolences for the untimely 
death of the great American President, Mr. 
Franklin D. Roosevelt. 

"We are all profoundly shocked and grieved by 
this irretrievable loss not only to the American 
people but also to the United Nations. 

"President Roosevelt has always been regarded 
as the symbol of freedom and justice; his passing 
will be mourned by all. 

"For us, members of this Committee, President 
Roosevelt's unshaken faith in a better world must 
be an inspiration in our work. We could not pay 



DEPARTMENT OF STATE BULLETIN 

a higher tribute to this great man than by doing 
our best to contribute towards the realization of his 
cherished ideal of an international organization 
for peace and security based on justice and sov- 
ereign equality of all peace-loving nations." 

RESOLUTION BY THE PAN AMERICAN UNION 

RESOLUTION ADOPTED BY THE GOVERNING 
BOARD OF THE PAN AMERICAN UNION, APRIL 14, 
1945 
Whereas : 

Franklin Delano Roosevelt, through his notable 
contributions to the cause of inter-American un- 
derstanding, was considered a citizen not only of 
the United States but of all the Americas; 

His death is an irreparable loss to all the nations 
of the Continent; 

The Good Neighbor Policy, enunciated by Presi- 
dent Roosevelt in his first inaugural address and 
effectively practiced throughout the twelve years 
of his administration, has become a basic principle 
of inter-American relations. 

The Governing Board of the Pan American 
Union 
Resolves : 

1. To record the profound grief of the members 
of the Board at the death of Franklin Delano 
Roosevelt, humanitarian, statesman, internation- 
alist. 

2. To pay tribute to his memorable contributions 
to the cause of inter-American understanding, 
which will ever remain a monument to his genius 
and a beacon to future generations. 

3. To request the Director General to transmit 
a copy of this resolution to the Government of the 
United States and to the family of President 
Roosevelt. 



April 13, 1945 
By order of the President, flags will 
remain at half-staff on all public buildings 
of the United States until the close of 
Monday, May 14. 

This order shall be published in the 
Federal Register. 

Edward R. Stettinius, Jr. 



April 13, 1945 
By order of the President, all Executive 
Departments and Agencies will be closed 
on Saturday afternoon, April 14. 

This order shall be published in the 
Federal Register. 

Edward R. Stettinius, Jr. 



APRIL 15. 1945 



669 



f? 



united in our resolve 



r>v 



I KNOW THAT I SPEAK for all Americans 
when I say we are united in our resolve to 
give to President Truman our full support 
in the momentous tasks 
of carrying this war 
to a victorious conclu- 
sion and in establish- 
ing a secure peace. Un- 
der President Truman's 
leadership we shall not 
falter, either as a Gov- 
ernment or a people, in 
the accomplishment of 
these ends, for which 
Franklin D. Roosevelt 
gave his life. 

Final preparations for the United Nations Con- 
ference at San Francisco are being completed on 
schedule. The Conference will begin on April 
twenty-fifth as planned. 



Statement by President Truman' 

[Released to the press by the White Houie April 12] 

The world may be sure that we will 
prosecute the war on both fronts, east and 
west, with all the vigor we possess to a 
successful conclusion. 



President Truman has authorized me to say that 
there will be no change of purpose or break of 
continuity in the foreign policy of the United 

States Government. 
We shall press forward 
with the other United 
Nations toward a vic- 
tory whose terms will 
deprive Germany and 
Japan of the means 
with which to commit 
aggression ever again, 
and toward the estab- 
lishment of a world or- 
ganization endowed 
with strength to keep 
the peace for generations and to give security 
and wider opportunity to all men. 

Edwaed R. Stettinius, Jr. 

April 13, 1945 



Pan American Day 



REMARKS BY THE SECRETARY OF STATE' 



[Released to the press April 14] 

The people of the United States will be grateful 
for this expression of tribute to Franklin Delano 
Roosevelt by the representatives of the American 
republics here assembled.^ They will be strength- 
ened by this assurance that the people of all our 
neighbor republics share so intimately in their 
sorrow and their sense of loss. 

I now have the honor to read to you a message 
from President Truman. 

"Mr Deak Secretary Stettixius : 

"Will you please convey to the Governing Board 
of the Pan American Union my deep appreciation 



' Harry S. Truman was sworn In as President of the 
United States by Ctiief Justice Stone at the White House 
on Apr. 12, 1945 at 7 : 09 p. nj. E. \V. T. 

' Made at the Pan American Union in Washington on 
Apr. 14, 1945. 

• See p. 668. 



of the tribute being rendered to Franklin D. 
Roosevelt at the special session of the Board called 
in his memory and my regi-et that I cannot myself 
be present. 

"President Roosevelt had prepared a message 
to the Pan American Union on the occasion of Pan 
American Day. Since it was his intention that 
it be read on this day, I send it to you. To the 
purposes and beliefs which he stated in this mes- 
sage and to the Good Neighbor Policy of which 
he was the author, I wholeheartedly subscribe. 

"I am certain that the bond of a cherished 
memory will give new strength to the friendship 
of the Americas. 

"Very sincerely yours, 

"Hakrt S. Truman 

"President of the United States 
"The Honorable Edward R. SiEmNrns, Jr. 
"Secretary of State, Washington^'' 



670 



DEPARTMENT OF STATE BULLETIN 



This is the message which was prepared by 
President Roosevelt : 

"Once more the American republics have demon- 
strated both their unity of purpose and their 
capacity for effective cooperation to maintain the 
security of this hemisphere against aggression and 
to advance the welfare of the American peoples. 

"The agreements reached at the Inter- American 
Conference in Mexico City and the solid support 
given to these agreements by all 21 of the American 
republics have a significance, however, that ex- 
tends far beyond this hemisphere. They provide 
renewed assurance that the American nations 
intend to live not only as good neighbors among 
themselves but as good neighbors in a world of 
neighbors. 

"The governments and peoples of the Western 
Hemisphere share the understanding that mainte- 



nance of lasting peace in the Americas is bound up 
with maintenance of lasting peace throughout the 
world. To the long and diflScult tasks of organiz- 
ing the world for such a peace thej' will bring a 
community of jirinciple and a rich store of common 
experience which will contribute greatly toward 
the accomplishment of this wider purpose." 

That concludes the message which President 
Roosevelt had prepared. 

Now the great man who was the author of the 
good-neighbor policy has passed away. But the 
policy and the program to which he gave so much 
live on. They are part of America now. We 
shall continue to walk together as neighbors on 
that road to security and peace which Franklin D. 
Roosevelt's sure vision and steadfast purpose 
helped us so much to find and to follow. 



Decision by American Republics To Resume 
Diplomatic Relations With Argentina 



[Released to the press April 9] 

The 20 American republics which were repre- 
sented at the conference at Mexico City have de- 
cided unanimously, after consultation, to resume 
normal diplomatic relations with Argentina. 

This decision followed the reorientation of 
Argentine foreign policy reflected by her declara- 
tion of a state of war against Axis countries and 
her adherence to the acts of the Mexico City con- 
ference on March 27 and her subsequent steps of 
a practical nature contemplated in the declarations 
made in the resolution on Argentina by the Inter- 
American Conference on Problems of War and 
Peace.' 

The State Department instructed Edward L. 
Reed, Charge dAffaires of the Embassy of the 
United States in Buenos Aii'es, to call on the Act- 
ing Foreign Minister of Argentina on April 9 at 
1 o'clock Buenos Aires time (12 noon Eastern War 
Time) and leave a note acknowledging receipt 
of an Argentine note dated March 14, 1944 sent 
to the Department by Ambassador Escobar. 



' Bulletin of Apr. 1, 1945, p. 5C8, and Apr. 8, 1945, p. 611. 



This Argentine note of March 14, 1944, informed 
the Secretary of State that the former Argentine 
President, General Ramirez, had resigned and that 
General Farrell had assumed tlie Presidency. 

The resolution on Argentina, stating the criteria 
whicli the Conference considered prerequisite to 
the restoration of the unity of the American re- 
publics, was transmitted by the President of the 
Conference, Dr. Ezequiel Padilla, to the Argen- 
tine Government through the Pan American 
Union, and Argentina replied through the same 
channel. 

A special meeting of the Governing Board of the 
Pan American Union was held on Saturday, March 
31, to consider the Argentine request to sign the 
final act of the Conference. With the authority 
of their governments the members decided unani- 
mously after deliberation that the measures taken 
by Argentina were in accordance with the criteria 
of the resolution on Argentina, and transmitted 
the Argentine communication to Dr. Padilla with 
a view to the signature by Argentina of the final 
act. The Charge dAflPaires of Argentina signed 
the final act at Mexico City on April 4. 



APRIL 15, 1945 



671 



United Nations Conference on International 

Organization 

With the authorization of President Truman, I wish to announce that the San Francisco 
conference will open on April 25, as planned— EDWARD R. STETTINIUS, JR 



people's commissar for foreign affairs 
of the u.s.s.r. to attend conference 

[Released to the press by the White House April 14] 

On April 13 President Truman directed Am- 
bassador Harriman, who has been conferring with 
Marshal Stalin on plans for the San Francisco 
conference, to assure the Marshal that the coming 
of V. M. Molotov, People's Commissar for Foreign 
Affairs of the Union of Soviet Socialist Republics, 
to the conference at San Francisco would be wel- 
comed as an expression of earnest cooperation in 
carrying forward plans for formulating the new 
international organization as laid down by Presi- 
dent Roosevelt and confirmed by the Yalta con- 
ference. The President stated he would look 
forward with pleasure to a visit by Mr. Molotov 
to AVashington. 

On April 14 the President was advised by 
Marshal Stalin that Mr. Molotov would attend the 
San Francisco conference. 

NATIONAL ORGANIZATIONS INVITED TO 

SERVE AS CONSULTANTS TO THE 

AMERICAN DELEGATION 

[Released to the press April 10] 

The Secretary of State announced on April 10 
that invitations had been sent to the following 
national organizations to designate representa- 
tives to serve as consultants to the American Dele- 
gation at the forthcoming United Nations Con- 
ference on International Organization at San 
Francisco beginning April 25: 

American Section of the International Chamber of Com- 
merce 
Chamber of Commerce of the United States 
National Association of Manufacturers 
National Foreign Trade Council 

American Bar Association 
National Lawyers Guild 



American Federation of Labor 
Congress of Industrial Organizations 
Railway Labor Executives Association 

American Legion 

American Veterans Committee 

Disabled American Veterans of the World War 

Veterans of Foreign Wars of the United States 

American Farm Bureau Federation 
Farmers Union 

National Council of Farmer Cooperatives 
National Grange 

American Association of University Women 

General Federation of Women's Clubs 

National Federation of Business and Professional 

Women's Clubs, Inc. 
National League of Women Voters 
Women's Action Committee for Victory and Lasting Peace 

American Jewish Conference 

American Jewish Committee 

Catholic Association for International Peace 

Church Peace Union 

Federal Council of the Churches of Christ in America 

National Catholic Welfare Conference 

American Association for the United Nations (Commis- 
sion To Study the Organization of Peace) 
Americans United for World Organization, Inc. 
Carnegie Endowment for International Peace 
Council on Foreign Reliitions 
Foreign Policy Association 
National Peace Conference 

Kiwanis International 

Lions International 

National Association for the Advancement of Colored 

I'eople 
National Exchange Club 
Rotary International 

American Council on Education 

National Congress of Parents and Teachers 

National Education Association 

The American Delegation, which consists of the 
eight Delegates together with their professional 
and technical advisers, must be kept to the smallest 
possible number. The consultants would be avail- 
able for consultation at the request of the Dele- 



672 



DEPARTMENT OF STATE BULLETIN 



gation and would be kept as closely informed of 
the work of the Conference as possible. 

An effort has been made, in inviting organiza- 
tions to be represented by consultants at San Fran- 
cisco, to select organizations which, taken as a 
whole, constitute a fair cross-section of citizen 
groups. It has not been practicable to extend 



consultant invitations to all organizations inter- 
ested in the work of the Conference. 

The Department will, however, provide liaison 
facilities at the Conference for all civic organi- 
zations sending representatives to San Francisco 
or which may be represented by their branches 
located in the San Francisco area. 



Meeting of the Committee of Jurists 



First Plenary Session 

ADDRESS BY THE SECRETARY OF STATE 



[Releasefl to the prfis April 9] 

Your Excellencies, Members of the CoMMnrEE 
OF Jurists of the United Nations, Ladies and 
Gentlemen : It is a pleasure for me, on behalf of 
the President and people of the United States, to 
welcome our distinguished guests. 

Your presence here attests your resolve and the 
resolve of your Governments to strengthen that 
great arm of human protection which finds expres- 
sion in the administration of justice. Nor is the 
significance of this meeting felt merely by the peo- 
ple of this land; the peace-loving peoples of the 
world look to you, to this Committee of Jurists, to 
give voice to their high resolve that differences 
between nations, no less than those between 
individuals, should be settled by peaceful methods 
and on a basis of justice. 

In 1920 a Committee of Jurists met at The Hague 
and drafted a statute for the Permanent Court of 
International Justice. That statute, as approved 
by the Council and Assembly of the League of 
Nations, was amended in certain respects in 1929 
by another Committee of Jurists. We are proud 
that a great American statesman, the late Elihu 
Root, served on each of those Committees. 

At Dumbarton Oaks it was proposed that there 
should be an international court of justice which 
should constitute the principal judicial organ of 
the contemplated international Organization; that 
the statute of the court should be either the present 
Statute of the Permanent Court of International 
Justice to which I have just referred, continued in 
force with such modifications as may be desirable, 

' Delivered on Apr. 9, 1945. The Secretary served as 
temporary chairman. 



or a new statute based upon the existing Statute; 
and that the statute should be a part of the Charter 
of the international Organization.' 

It is scarcely possible to envisage the establish- 
ment of an international Organization for the 
maintenance of peace without having as a com- 
ponent part thereof a trulj' international judicial 
body. 

Those who participated in the conversations at 
Dumbarton Oaks left to the future the task which 
you are about to undertake. If the statute of such a 
court is to form part of the Charter of the new 
international Organization, steps must now be 
taken to formulate such an instrument for consid- 
eration at the forthcoming conference of the 
United Nations at San Frsncisco. It was because 
of this that the members of the United Nations 
were invited to send representatives to Washington 
for this work. 

The war-weary world is committing to your 
hands, in the first instance, the responsibility of 
preparing recommendations. To your measured 
judgment the people of the world with faith in 
order under law entrust this important initial 
work. With knowledge born of the experiences of 
the past, and with hearts lifted by the great vic- 
tories won by the United Nations over the enemies 
of law and human rights, you come with a man- 
date to make j^our contribution to the establish- 
ment of a peaceful world order. 

With high confidence that the results of your 
labors will redound to the benefit of all mankind, 
I hereby open this meeting of the Committee of 
Jurists. 



•Chapter VII. 



APRIL 15. 194S 



673 



ADDRESS BY THE REPRESENTATIVE OF CHINA 



[Released to the press April 9] 

Me. Chaihman, Youk Excellencies, Members 

OF THE Committee of Jurists of the United 
Nations, Ladies and Gentlemen : It is my great 
privilege to rise and respond to the address so ably 
and appropriately delivered by our chairman on 
the occasion of the opening of the first plenary 
session of the Committee of Jurists of the United 
Nations. 

We thank you, Mr. Chairman, for the cordial 
welcome you extended to all of us. We completely 
associate ourselves with the sentiments and hopes 
you have expressed. 

In the words of the Dumbarton Oaks Proposals, 
"All members of the Organization shall settle their 
disputes by peaceful means in such a manner that 
international peace and security are not endan- 
gered." One of such means is, of course, judicial 
settlement. 

In endeavoring to organize an international 
court, we are not treading on new ground ; we are 
to improve upon a system that has been in existence 
for almost a quarter of a century. No one can 
deny that the Permanent Court of International 
Justice has made a valuable contribution to the 
peaceful settlement of international disputes. If 
there are imperfections or inherent defects in the 
organization of the Court, it is only because those 
who framed its Statute could not have, mider the 



circumstances then existing, drawn up a better 
project. 

Now we are called upon either to adopt the ex- 
isting Statute with modifications or to frame a 
new statute based upon the existing one. Which- 
ever coui'se we may pursue, the present Statute 
of the Permanent Court of International Justice 
will serve as an indispensable document for our 
work. 

We know that, whatever organization may be 
created for the maintenance of world peace and 
security, there must be established the rule of law 
among nations and there must be cultivated 
among them the spirit of respect for law. It is, 
therefore, the duty of the Committee to recom- 
mend the establishment of such a court as will be- 
come one of the most important and effective agen- 
cies for the pacific settlement of international dis- 
putes. 

It is undoubtedly our common hope that the 
labors of this Committee will help to make the 
forthcoming conference at San Francisco a suc- 
cess. With a spirit of cooperation and with a 
singleness of purpose we shall not fail in our task. 

I am sure I am voicing the feelings of all those 
present when I express our appreciation to the 
American Government for its kind and hospitable 
reception of the representatives of the participat- 
ing nations. 



ADDRESS BY THE REPRESENTATIVE OF NEW ZEALAND 



(Released to the press April 9] 

Mr. Secretary, Your Excellencies, Members 
OF THE Committee of Jurists of the United 
Nations, Ladies and Gentlemen : I should like to 
assure you of the appreciation that my country of 
New Zealand will feel, and of my own apprecia- 
tion, of the honor paid to my Dominion and myself 
in inviting me to speak on this opening day of the 
proceedings of this important Committee. 

I would also express, for myself and my fellow 
delegates, our appreciation of your welcome and 
of the motives which have impelled the President 
of the United States, in conjunction with other 
powers, to call this Committee together for the 
purpose which you, Mr. Secretary, have briefly but 
fully outlined. 



May I say, Mr. Secretary — and I am sure that 
this cannot be regarded as an invidious distinc- 
tion — how glad we all are to see amongst us as 
one of the delegates Dr. Wang Chung-hui, who is 
himself a former Judge of the present Permanent 
Court of International Justice. 

No doubt there will be matters relating to the 
preparation of the Statute upon which at the out- 
set at all events there may be differences of opinion 
but I take it that in some respects relations between 
nations are much the same as between individuals, 
that is to say no person as between persons and no 
nation as between nations can reasonably expect to 
have his or its own way in everything. There 



' Dr. Wang Chung-hui. Delivered on Apr. 9, 1945. 
' Sir Michael Myers. Delivered on Apr. 9, 1945. 



674 



DEPARTMENT OF STATE BULLETIN 



must be a certain amount of readiness to give and 
take. It would be entirely out of place for me at 
this stage to refer to any matter of possible initial 
difference or, indeed, to refer at all in any detail 
to the matters which may come before this Com- 
mittee. SuiEce it to say that the nations of the 
world are at the parting of the ways. Either they 
go forward to peace and security, or they go back 
to barbarism. There can be no two opinions that 
one of the steps necessary to lead to permanent 
peace and security is the establishment of a Per- 
manent Court of International Justice which may 
decide in a peaceful manner disputes, at all events 



disputes on justiciable matters, which may actually 
or perhaps even potentially arise as between nation 
and nation. This Committee has been called to- 
gether with a view to framing an appropriate stat- 
ute for that purpose. If we succeed we shall have 
performed a great work for international har- 
mony, peace, and security. Failure would be a 
world tragedy, but I am optimistic enough to be- 
lieve that men of common sense and good-will 
should be able to prepare a statute which will sat- 
isfy the necessities of the case and be the means of 
preventing international dissension and strife. 



First Meeting of the Committee 



[Released to the press April 9] 

The Committee of Jurists held its first meeting 
beginning at 3 o'clock, April 9. Mr. Green H. 
Hackworth, Legal Adviser of the Department of 
State, was elected chairman. He stated that in 
as much as four governments, namely, the Soviet 
Union, Great Britain, China, and the United 
States, were sponsoring this meeting, he consid- 
ered it proper to ask his colleagues from the Soviet 
Union, Great Britain, and China to take the chair 
in rotation from time to time. This met with 



approval. Monsieur Jules Basdevant, Legal Ad- 
viser of the French Foreign Office, was chosen as 
rapporteur. 

The Committee agreed upon a method of pro- 
cedure. It was also agreed to use the Statute of 
the Permanent Court of International Justice as a 
basis for discussion, making such modifications as 
might be agreed upon as desirable. 

On April 10 there was a meeting of the full 
Committee, at which time was begun the discus- 
sion of the text of the Statute of the Court. 



Death of Minister of Union of South Africa 



MESSAGE FROM PRESIDE]\T ROOSEVELT TO 
THE OFFICER ADMINISTERING THE GOVERN- 
MENT OF THE UNION OF SOUTH AFRICA' 

[Released to the press April 10] 

April 10, 1945. 
Dr. Gie's death comes as a great shock. His 
many friends in Washington and his colleagues 
who are about to depart for San Francisco share 
with me a feeling of profound grief at the loss of 
one who served .his country with distinction and 
who was about to participate directly in the great 
task of building a lasting peace. 

Please accept my condolence and deepest 
sympathy. 

Franklin D. KoosE^'ELT 



' His Excellency the Right Honorable N. J, de Wet. 



MESSAGE FROM THE SECRETARY OF STATE 
TO FIELD MARSHAL SMUTS 

[Released to the press April 10] 

April 10, 1945. 
Field Marshal Jan Christian Sjiuts 
South Africa Houae 
London^ England 
The sudden and tragic death of Dr. Gie on the 
eve of his departure for the United Nations Con- 
ference in San Fancisco is a shock to all of us. 
The Government of the United States and his 
many friends here extend to you profound sym- 
pathy for your country's loss. His wise counsel 
would have contributed much to the great task 
which lies before us and in which I look forward 
to working with you. 

Edward E. Stettinius, Jr. 
Secretary of State of the United States. 



APRIL 15. 1945 



675 



The Inter-American System and a World 

Organization 

Address br ASSISTANT SECRETARY ROCKEFELLER' 



[Released to the press April 11] 

T T IS A GREAT HONOR to be witli the members and 
■*• many friends of the Pan American Society 
of Massachusetts and Northern New England to- 
night. The work that the citizens of Boston and 
Massachusetts have done in the field of inter- 
American cooperation has been an important 
factor in giving spirit and meaning to tlie work 
your Government has been carrying on. Tonight 
I should like to give you a report on the recent 
Mexico City conference, its significance for the 
future, from which you may gage the contribu- 
tions you have made. 

I 

An international conference is something more 
than its proceedings and its conclusions. Its his- 
torical impact must be measured also by the spirit 
and tempo of its sessions, by the setting and 
oratory, and by all those attending circumstances 
which lend color and atmosphere to its progress. 
By this broad standard, I think that the Inter- 
American Conference on Problems of War and 
Peace at Mexico City will be remembered as one 
of the truly great conferences of the American re- 
publics, and even of the world. 

I wish that I might somehow communicate to 
you the true quality of that Conference. You 
would have to visualize the beautiful hill-top 
Castle of Chapultepec, in the midst of a park of 
ageless cedar trees and rare flowers. You would 
have to see the Hall of the Chamber of Deputies, 
rich with its mahogany desks and huge crystal 
chandelier and gilded roster of Mexican national 
heroes. You would have to witness the swift rush 
of traffic to and from Chapultepec, over the Paseo 
de la Reforma. a thoroughfare which with its six- 
laned avenue and gardened parkways and heroic 
statues could scarcely be matched in any capital 
city of the world. 

Perhaps, too, the Conference would have more 
meaning to you if you, also, could have known the 
wonderful hospitality of our Mexican hosts, the 
fraternal feeling among the delegates, the eager 
and relentless pressure from a hundred news, 

640738 — 45 -3 



radio, and camera men, who were eyes and ears 
of the world. 

If you could have shared these myriad impres- 
sions, you would have obtained a deep sense of the 
dignity, the fraternity, the historical depth, and 
the high purpose of the Mexico City conference. 
It imparted to all who attended it a lasting con- 
viction that the solidarity of the American re- 
publics is something genuine and very potent — • 
something significant not alone to this Western 
Hemisphere but also to the larger world, where 
countless men struggle on far-flung battlefronts 
that their vision of security and permanent peace 
may yet be realized. 

In the very days of the Mexico conference an 
American Army was crossing the Rhine and thun- 
dering toward the gates of Berlin. Marines were 
raising a new flag on bloody Iwo Jima, and the 
great super-fortresses were raining bombs upon 
the industrial centers of Japan. With the cer- 
tainty that victory is inevitable, conference 
thoughts turned toward the impending organi- 
zation of world security, and the better way of life 
to come. 

Behind Chapultepec were Dumbarton Oaks and 
the Crimea meeting; ahead was the United Na- 
tions Conference at San Francisco. Mexico, all 
hoped, would be a happy augury for the meeting 
by the Golden Gate and the world's brighter fu- 
ture. At Mexico City, as never before, the state- 
craft of the American republics impinged upon 
the problems of the globe ! 

II 

His Excellency Manuel Avila Camacho, Presi- 
dent of Mexico, in the address which opened the 
Conference, advanced the ideal of an American 
solidarity that would extend its benefits into the 
entire world. 

"Evidently, inter- American cooperation will not 
in itself alone suffice to bring about a state of 



1 Delivered before the Pan American Society of Massa- 
chusetts and Northern New England in Boston, Mass., on 
Apr. 11, 1945. 



616 



DEPARTMENT OF STATE BULLETIN 



affairs which, by its very complexity, calls for 
more general interlocking and demands the ad- 
vent of an era of generous world conciliation," he 
said. "But the experience of America will facili- 
tate that advent. We shall not prove ourselves 
equal to the loftiness of the hope that our hemi- 
sphere has held for the world since the day of its 
discovery, if we hesitate an instant in assuming 
the unavoidable responsibilities of transforming 
that wonderful hope into a living and magnificent 
reality. ... A free America, strong, healthy, 
prosperous, and enlightened, will constitute an in- 
estimable promise of well-being for the civilized 
world." ^ 

This keynote thought of the President of Mexico 
accurately forecast the pattern and objectives of 
the Conference. There was, of course, the pri- 
mary task of perfecting relations among the 21 
republics — of preserving and strengthening that 
free America— "strong, healthy, prosperous, and 
enlightened"— which the President had bespoken. 

But there was also the parallel task of making 
the pathway of the Americas converge with the 
road to world security which all freedom-loving 
nations now seek. And within both these tasks 
there was the need to strengthen the economic 
cooperation and social well-being upon which the 
stability and security of international relations 
inevitably rest. 

Into its primary task— the strengthening of the 
inter-American system — the Conference moved 
swiftly and with the confidence born of long ex- 
perience. Political trial-and-error through twelve 
decades had convinced all American republics of 
the wisdom and timeliness of a multilateral and 
cooperative system for hemispheric security which 
would transcend the unilateral Doctrine for Con- 
tinental Defense wliich President James Monroe 
had proclaimed in 1823. 

The Act of Chapultepec,^ whereby all the Amer- 
ican republics have accepted a common responsi- 
bility to resist aggression — by force if necessary — 
was drafted and approved at Mexico City with a 
swiftness and unanimity which surprised even the 
delegates themselves. But tliat swift fruition had 
a long history. It was possible only because of the 
progressive evolution of inter-American political 
opinion through many earlier conferences, quick- 
ened by the horrible object lessons of Axis aggres- 

1 Bui.LETiN of Feb. 25, 1945, p. 276. 
' Bdixetin of Mar. 4, 1045, p. 339. 



sion against peace-loving states during the last 
seven years. Perhaps, too, this flowering of Amer- 
ican solidarity was made possible in part by the 
propitious climate fostered by President Roose- 
velt's good-neighbor policy. 

At Habana in 1928 the American republics had 
reduced their cooperative political philosophy to 
the clear and firm terms of a Code of International 
Public Law. 

At Buenos Aires in 1936 the American repub- 
lics had established the principle of consultation, 
applicable in the event of any threat to the peace 
of the Western Hemisphere. 

In 1938 the Declaration of Lima' warned the 
world that in case the peace, security, or territorial 
integrity of any American republic were threat- 
ened by acts of any nature arising outside the con- 
tinent they would consult for the purpose of "co- 
ordinating their respective sovei-eign wills . . . 
using the measures which in each case the circum- 
stances may make advisable". 

At Habana in 1940 the final act of Habana * de- 
clared that "any attempt on the part of a non- 
American State against the integrity or inviola- 
bility of the territory, the sovereignty or the polit- 
ical independence of an American State shall be 
considered as an act of aggression against the 
States which sign this declaration." 

From this Act of Habana the inter-American 
S3'stem moved one long step forward in the Act 
of Chapultepec through the provision that the 
American republics would act unitedly to resist 
aggression, whether it came from without or 
within the Western Hemisphere. The act, in- 
fluenced by the object lessons of Axis aggression 
in recent years, enables the use of force to stop 
aggression when less drastic measures of diplo- 
matic pressure or economic sanction prove inef- 
fective. 

Practically, the possibility of aggressive war- 
fare has been "outlawed" in this liemisphere, and 
it is a matter of gratification to the United States 
that the initiative came from other American re- 
publics. Colombia, Uruguay, and Brazil pre- 
.=entcd the original resolutions from which the 
final terms of the Act of Chapultepec were drafted. 

If any American nation shows signs of becom- 
ing an aggressor against an American state, 
whether by economic, political, or military means, 

^ PuKss Releases of Dec. 24, 1938, p. 474. 

' Declaration XV, Bulletin of Aug. 24, 1040, p. 136. 



APRIL 15, 1945 



677 



the rest of the nations consult together. If it is 
apparent that aggression threatens one, all the con- 
sulting American states may take any of the fol- 
lowing steps — recall chiefs of diplomatic missions, 
break diplomatic relations, break postal, tele- 
graphic, telephonic, and radiotelephonic relations, 
or interrupt economic, financial, and commercial 
relations with the potential aggressor. If the 
aggressor is not discouraged by these non-military 
pressures, then armed force is to be used to prevent 
or repel aggression. 

There is no conflict in principle or purpose be- 
tween the Act of Chapultepec and the Dumbarton 
Oaks Proposals for a world security system. The 
act itself provides that the new inter- American set- 
up "shall be consistent with the purposes and prin- 
ciples of the general international organization, 
when established". The delegates all recognized 
that we must have world peace and security first of 
all, if the Americas are to be secure from attack. 
The inter- American system and the World Organ- 
ization have exactly the same objectives — world 
peace and security. 

Ill 

Secretary Stettinius, speaking to the first 
plenary session of the Mexico City conference, said 
that neither victory nor peace can be won without 
the full support of the American republics and 
without effective collaboration among themselves 
and with the rest of the world. 

"That sacred obligation we must recognize and 
meet here at Mexico City," he said. "We know 
that without the contributions that have been made 
by the American republics in the war the United 
Nations could not defeat the Axis aggressors. 
This American strength — this strength of the New 
World — must also be built into the structure of 
peace if that structure is to endure." ^ 

Our Secretary of State had just completed a 
26,000-mile journey on errands of war and peace 
in four continents when he arrived at Mexico City. 
He became president of Commission II of the Con- 
ference, which undertook the development and 
orientation of the opinion of the American repub- 
lics with respect to the world security Organiza- 
tion. 

After a fortnight of intense labors Commission 
II presented its conclusions in resolution XXX, 
entitled "On Establishment of a General Interna- 



tional Organization," which was adopted unani- 
mously by the Conference.'' With this resolution 
was a report embracing the observations and rec- 
ommendations of individual republics with respect 
to the Dumbarton Oaks Proposals. This lias since 
been transmitted to governments of the United 
Nations, preparatory to the San Francisco 
conference. 

Resolution XXX declared the determination of 
the American republics to cooperate with each 
other and with other peace-loving nations in the 
establishment of a general international organiza- 
tion based upon law, justice, and equity. It 
asserted the desire of these republics to coordinate 
and harmonize the inter- American system with the 
general international Organization. It also de- 
clared that the Dumbarton Oaks Proposals consti- 
tute a basis for the establishment of the general 
Organization. At the same time the American 
republics retained their full liberty to present and 
support at San Francisco all the viewpoints which 
they may consider pertinent. 

The American republics at Mexico City held 
that the aspiration of universality is the ideal to- 
ward which world organization should tend. Del- 
egates from republics other than the United States 
(which had participated in the formulation of the 
Dumbarton Oaks Proposals) also agreed on the 
broad principles : that the general assembly of the 
world Organization should be the duly represent- 
ative organ of the international community with 
powers to assure its effectiveness in harmony with 
the powers of the Security Council; that the es- 
tablishment of an international tribunal or court 
of justice was desirable; and that an international 
agency should be especially charged with promot- 
ing intellectual and moral cooperation between 
nations. The delegates held that questions of an 
inter-American character should preferably be 
solved in accordance with inter-American meth- 
ods and procedures, but in harmony with those of 
the general international Organization. 

Clearly, the American republics were contribut- 
ing their political wisdom gained during 150 
years of practical experience and their moral sup- 
port to the approaching conference in San Fran- 
cisco. This trend of hemispheric opinion was not, 
of course, inconsistent with the history of inter- 
national relations in any of these republics. All 
of the other American republics were once mem- 



^ BmxETiH of Feb. 25, 1945, p. 281. 



' Bulletin of Mar. 18, 1945, p. 449. 



678 

bers of the League of Nations. Their desire for 
inter-American solidarity has never been intended 
to exchide a broad and active cooperation with 
other nations of the vForld. Commerce, history, 
and immigration in earlier generations tend to 
incline many American peoples toward a security 
system that promises to safeguard the peace and 
welfare of Old World — as well as American — 
countries. An international organization help- 
ful to economic welfare and intellectual coopera- 
tion would be especiall}'' in accord with the tradi- 
tions and interests of the New "World republics. 

IV 

The effort of the Mexico City conference to 
strengthen the inter-Amei-ican system ^ was not, 
of course, an innovation in international affairs. 
It was simply a further development and intensi- 
fication of a movement that has been developing 
steadily for more than a century. There is no 
firmer international tradition in the world than 
that of inter-American friendship and coopera- 
tion. 

This movement grew gradually from experience 
which revealed the necessities of both peace and 
war periods. The timeliness of strengthening the 
inter-American system at Mexico City was so 
apparent as to be non-controversial. There was 
the general desire to strengthen the Pan American 
Union, but there was also the urgent need of addi- 
tional protective measures against the flight of 
war criminals from Axis countries to tliis hemi- 
sphere, the control of Axis funds, and the elimi- 
nation of subversive activities. 

Some of the American republics adopted the 
conference method of discussion and agreement as 
long ago as 1826 when a congress met at Panama 
at the instance of the great liberator, Simon Boli- 
var. In the period from 1626 to 1930, according 
to Dr. J. Fred Rippy {Latin America in World 
Politics), 40 official inter- American conferences 
were held under Hispanic American leadership, 
and 63 were held mainly under the leadership of 
the United States. Most of those conferences were 
for financial, or transpo)tation, or sanitary, or 
other specialized purposes. 

But a series of Confereni'cs of American States 
began at Washington in 1889-90 which was des- 
tined to bring about the etl'octive and permanently 
organized cooperation of these republics. It was 

' For article on intcr-Anieilc.TD .system by Dana G. Munro, 
see Bulletin of Apr. 1, 1945, p. 525. 



DEPARTMENT OF STATE BULLETIN 

followed by similar general conferences : at Mexico 
City in 1901-02, at Rio de Janeiro in 1906, at 
Buenos Aires in 1910, at Santiago in 1923, at 
Habana in 1928, at Montevideo in 1933, and at 
Lima in 1938. The ninth Conference of American 
States is to be held at Bogota in 1946. After Lima 
and prior to Mexico City, there were meetings of 
emergency character at Panama in 1939, at Habana 
in 1940, and at Rio de Janeiro in 1942, concerned 
primarily with the security and defense of this 
continent. 

The Pan American Union, organ of the Ameri- 
can republics, grew out of a Bureau of the 
American Republics, originallj' authorized by the 
Washington conference of 1889-90. The original 
idea underlying the Bureau was to encourage trade 
among the American republics, but its utility soon 
extended into many fields. 

The long shadows of many great statesmen fall 
across the pages of inter- American history. One 
might almost say that the more able the statesman 
the greater was his desire to encourage friendship 
and cooperation among these republics. Thomas 
Jefferson, Henry Clay, John Quincy Adams, James 
Monroe, James G. Blaine, Elihu Root, Charles 
Evans Hughes, Cordell Hull, and Franklin D. 
Roosevelt are among the illustrious personalities of 
our own country who have addressed their atten- 
tion and their policy particularly to hemispheric 
problems of security, peace, and cooperation. I 
should add, too, the names of Edward R. Stet- 
tinius, Jr., Secretary of State, and Dr. Leo S. 
Rowe, Director General of the Pan American 
Union. All the American republics appreciated 
the great personal contribution of Secretary Stet- 
tinius to the agreements reached at Mexico City, 
and Dr. Rowe received the acclaim and tribute of 
all the delegates for his tireless labors in behalf of 
inter-American cooperation. 

The significant thing about the interest in inter 
American relations today is that it is not confined 
to governments. Millions of citizens are studying 
about the American republics, their mode of life, 
their international relations, and their progress. 
Many public-spirited organizations, such as this 
Pan American Society of Massachusetts and 
Northern New England, are making systematic 
and effective efforts to support these friendly rela- 
tions among peoples of the hemisphere. 

The delegates at Mexico City felt these tides of 
comprehension and sympathy. They formulated 
an elaborate plan for the "Reorganization, Con- 



APRIL 15, 1945 



679 



solidation and Strengthening of the Inter-Ameri- 
can System" — resohition number IX of the final 
iict.^ This will give better definition, more regu- 
larity, and more rhythm to the cooperation among 
the American republics. 

The international Conferences of American 
States will meet at four-year intervals, and meet- 
ings of the Ministers of Foreign Affairs will be 
held annually except in the years of the general 
conferences. Special meetings of the ministers 
will be held when problems of great urgency arise. 

The Pan American Union has been given po- 
litical authority on matters affecting the function- 
ing of the inter-American system and the soli- 
darity and general welfare of the American re- 
publics. Such political authority would be within 
limitations imposed by the inter- American states, 
or under special direction of the meetings of Min- 
isters of Foreign Affairs. 

The Governing Board of the Pan American 
Union, now composed of chiefs of diplomatic mis- 
sions at Washington, will in future consist of one 
delegate from each of the American republics. 
Such delegates will have the rank of ambassadors, 
but will not be a part of the diplomatic missions 
at Washington. Practically, this means that the 
Union will become more autonomous, in the sense 
that it will be detached from the routine diplo- 
matic establishments in Washington. It will be 
better able to centralize or coordinate a vaiiety of 
inter- American activities. 

Resolution IX provided for the drafting of a 
charter for the improvement and strengthening of 
the inter-American system. This will be sub- 
mitted to the governments before December 31, 
1945. It will enable a final and definitive instru- 
ment of inter- American relations to be considered 
at the next Conference of American States to be 
held at Bogota in 1946. 

The resolution also provided for the establish- 
ment of a permanent Inter- American Economic 
and Social Council subsidiary to the Governing 
Board of the Pan American Union, which was 
given various functions within the broad general 
purpose of promoting the social progress and rais- 
ing the standards of living of all the American 
peoples. 

The strengthening of the inter-American sys- 
tem was not prejudicial to a world security or- 
ganization. The preamble stated that the system 
is and has traditionally been inspired by a deep 

1 Bulletin of Mar. 4, 1945, p. 341. 



sense of universal cooperation and that it should, 
furthermore, "maintain the closest relations with 
the proposed general international Organization 
and assume the appropriate responsibilities in 
harmony with the principles and purposes of the 
general international Organization." 



I have sketched in broad outline the orientation 
of the American republics toward the world se- 
curity Organization and the strengthening of the 
inter- American system. I should like to dwell 
upon the thought that these extraordinary efforts 
relate to a security system that is directed not 
merely to safety from physical aggression, but 
which also extends into a broad range of human 
activities upon which higher standards of life and 
social progress depend. As President Roosevelt 
said when the Dumbarton Oaks Proposals were 
published, "The projected international Organiza- 
tion has for its primary purpose the maintenance 
of international peace and security and the creation 
of the conditions that make for feace." ^ 

Apart from the long-term measures for perma- 
nent economic welfare of the American republics, 
the delegates at Mexico City naturally concerned 
themselves about solution of the difficult problems 
of the transitional period after the war ends and 
before the restoration of noi-mal peacetime indus- 
try and commerce. The curtailment of United 
States jjurchases of essential commodities after 
the conclusion of hostilities was typical of the 
problems which must be solved. 

The transitional, as well as the permanent, field 
of inter-American economic relations was care- 
fully explored at Mexico City and, so far as hu- 
manly possible, principles and procedures were 
adopted which are certain to be very helpful in 
the post-war period and thereafter. 

This phase of conference activities was guided 
with great skill and patience by the Honorable 
Will Clayton, Assistant Secretary of State. In his 
own words to the delegates: "The United States 
Government is definitely committed to a postwar 
policy looking to a substantial expansion in world 
economy. We recognize the interdependence of 
nations in the political, military, and economic 
fields for the preservation of peace in the world 
and for the creation of those conditions which will 
promote higher levels of living through an ex- 

" Bulletin of Oct. 8, 1944, p. 365. The italics are Mr. 
Rockefeller's. 



680 



DEPARTMENT OF STATE BULLETIN 



pansion in production, distribution, and consump- 
tion of goods and services and through interna- 
tional cooperation in fostering the betterment of 
labor standards and healtli and social conditions 
in general." 

Apart from the resolutions related to the transi- 
tion period, the Conference considered more per- 
manent economic relationships. Among the reso- 
lutions one finds repeated assurances of coopera- 
tion between the American republics and the world 
security Organization, when formed, in economic 
and social fields. 

The Dumbarton Oaks Proposals include the 
establishment of an Economic and Social Council. 
The objective of this Council would be to create 
the conditions of stability and well-being which 
are necessary for peaceful and friendly relations 
among nations. It would facilitate solutions of 
international economic, social, and other humani- 
tarian problems, and promote respect for hmnan 
rights and fundamental freedoms. 

The American republics at Mexico City agreed 
to establish an Inter-American Economic and So- 
cial Council within the Pan American Union, and 
one of its major functions will be "To maintain 
liaison with the corresponding organ of the gen- 
eral international organization when established, 
and with existing or projected specialized inter- 
national agencies in the economic and social field." 

The Mexico City conference also adopted an 
Economic Charter of the Americas, which has been 
hailed as a milestone in the economic history of 
the world.' It defines the basic objectives of the 
American republics in war and in peace, then de- 
velops the principles which may be applied in par- 
ticular problems of commerce, industry, agricul- 
ture, or labor. 

Those major objectives are the continued mo- 
bilization of economic resources until the achieve- 
ment of total victory, an orderly transition of the 
economic life of the Americas from wartime to 
peacetime conditions, and the constructive eco- 
nomic development of the Americas through de- 
velopment of natural resources, increased indus- 
trialization, improved transportation, modernized 
agriculture, power development, private capital in- 
vestment, and improved working conditions — all 



'Bulletin of Mar. 4, 104.'), p. 347, nnd Mar. 18, 1945, 
p. 451. See nlso nrtlcle on "Economic Aspects of the 
Mexico City Conference" by H. Gerald Smith in Bulletin 
of Apr. 8, p. 624. 



leading to a rising level of living and increased 
constmiption. 

Those high purposes would be inadequate, if 
their attainment were exclusively for the benefit 
of the American republics. They were in fact 
linked with the interests and necessities of all peo- 
ple. The Charter said that an economic program 
which would enable the peoples of this hemisphere 
and of the world to achieve higher levels of living 
is an indispensable factor in preventing the recur- 
rence of war. 

The discussions at Mexico City on economic and 
social topics were widely representative of the 
combined opinion of government officials, legisla- 
tors, industry, commerce, agriculture, and labor 
groups. The delegates to the Conference were 
constantly counseled by advisers who had the 
public interest and welfare in mind. It was the 
democratic method no less than the agreements 
which created good feeling. The fact that a pains- 
taking consultation was being made on the diffi- 
cult adjustments and transitions of the post-war 
period was in itself a cause for confidence and good- 
will. No one was to get lost for lack of guideposts, 
even where the end of the journey could not be 
known. 

For the delegates at Mexico City, it was not just 
a matter of making rules for buying and selling, 
or of building factories, or making loans. There 
was the more difficult task of exploring objectives 
and giving impulse — or spirit, if j'ou will — to all 
of those beneficent social elforts which collectively 
are essential to the welfare of human society. 
There was adopted, for example, a Charter for 
Women and Children in which the American re- 
publics agreed on many steps helpful to education, 
health, the protection of children, and vocational 
aid. There were resolutions on social security, and 
against racial discrimination, and against the cruel 
racial persecution employed by Hitler against the 
Jews. In fact, there was scarcely an altruistic pur- 
pose which did not find expression in one or another 
of the 61 resolutions finally approved from the 285 
introduced at the Mexico City conference. 

VI 

The American republics have given to the world 
their message of fraternity and cooperation. 
From the historic Castle of Chapultepec went 
forth the series of agreements which newly attest 
the ability of statesmen to unite for victory in 
war and to organize progress in peace. 



APRIL IS. I94S 



681 



His Excellency Joaquin Fernandez, Foreign 
Minister of Chile, in the closing hour of the Con- 
ference said that it had perfected the good- 
neighbor policy into a program that is something 
more than a system of relations between Latin 
America and the United States. "It is the system 
of good and fruitful relations of all the nations 
of America among themselves and it is pan- 
Americanism in its highest expression." 

It was a system of "good and fruitful" relations 
to which the distinguished Minister referred. The 
relations of the American republics are to have a 
productive and expansive capacity. Their own 
spokesmen have hoped and declared that this 
utility will be in harmony with the larger pur- 
pose of world security and peace. It is the unity 
of all peace-loving nations, irrespective of geo- 
graphical location, that is the ultimate goal. 

There was no thought of hemispheric isolation 



at Mexico City. There was neither desire nor ef- 
fort to establish a "bloc" which could lend itself 
to the nefarious business of international traffick- 
ing and maneuvering fatal to hopes for world 
organization. 

The final act of the Mexico City conference has 
the imperishable strength of high purpose, the 
utility of organized cooperation, and the moral 
value of friendly spirit. I confidently believe that 
it will prove pi'ecursive to a world charter for or- 
ganized security at the San Francisco meeting. 
In the hour of that fortunate consummation of 
world aspiration, the friendship of the American 
republics will have demonstrated itself a be- 
neficent agency for the entire world. Countless 
thousands of brave men who struggle for a bet- 
ter world will know that their painful toil and 
bloody sacrifice have not been m vain. 



Adherence by Lebanon, Saudi Arabia, and Syria 
to the Declaration by United Nations 

CEREMONY ON THE OCCASION OF THE SICNING OF THE DECLARATION* 



Remarks by the Secretary of State 

[Released to the press April 12] 

The response of the peoples of the world to the 
high purposes embodied in the United Nations 
Declaration is encouraging to all who believe in 
peace and freedom. 

The United Nations formally came into being 
when 2G governments signed the historic Declara- 
tion of January 1, 1942. During the three years 
since that time, the acceptance of the principles 
of the United Nations has been so wide-spread 
that the number of members has almost doubled. 
The aims of the United Nations from the begin- 
ning have been complete victorj' over our enemies 
and the establishment of future peace and secu- 
rity. We are now making great progress in the 
fulfilment of both of these aims. AVe are winning 
impressive victories on the battle-fronts of the 
world, and at San Francisco we are determined to 
make progress toward the assurance of interna- 
tional peace and security in the future. 

Today the Declaration is being signed by repre- 
sentatives of the Kingdom of Saudi Arabia, the 
Republic of Syria, and the Republic of Lebanon, 
making a total of 47 signatories. These three 



states are making effective contributions to the 
common war effort. Tliey have long been asso- 
ciated with the United Nations in spirit and in 
fact, and it is indeed a pleasure to welcome them 
formally into our ranks. 

Remarks by the Minister of Syria* 

[Released to the press April 12] 

The formation of the United Nations and their 
adherence to the Declaration which embodies their 
ideals are evidence of their realization that war can 
be won and peace maintained only by the most 
persistent and concerted efforts of all the freedom- 
loving nations of the world. Every one of these 
nations is convinced that her very existence is 
bound up with this great common purpose. 

The Government and people of Syria share this 
conviction and recognize in it the foundation of 
their national existence. Inspired by the ideals of 
liberty and equality which lie deep in their Arab 
heritage, and moved by the zeal of their present 

' Held at the Department of State on Apr. 12, 1943. For 
exchange of communications between the United States 
and the Governments of Snudi Arabia, Syria, and Lebanon, 
see BuiXETiN of Mar. 11, 1945, p. 408, and Apr. 1, 1945, p. 575. 

' The Honorable Nazem Al-Koudsi. 



682 

rebirth, thej' are determined to exert their utmost 
for the victory of the principles of justice and 
freedom in tlie world. 

Moved by this determination, Syria has, since 
the beginning of hostilities, placed all her mate- 
rial resources at the disposal of the Allies in their 
great effort to defeat the forces of terror and op- 
pression. Then came her declaration of war 
against the aggressor nations as a further evi- 
dence of her willingness to join with all her power 
in the fight for victory and for the establishment 
of a just and durable peace. 

In adhering to this Declaration by the United 
Nations, my country is filled with the new enthu- 
siasm which the joining in such a high purpose 
brings. She is also deeply aware of the responsi- 
bilities which this adherence places upon her shoul- 
ders. I deem it a great privilege to be her repre- 
sentative in this historical moment of her existence, 
and in signing this document to give formal and 
legal expression to her unflinching stand with the 
United Nations in their struggle for the assurance 
of victory and order. 

My country is grateful to the United States, 
which is accepting this Declaration on behalf of 
the United Nations, and I am particularly happy 
that the signature is taking place in Washington. 

Remarks by the Minister Designate of Lebanon^ 

[Released to the press April 12] 

From the beginning of the present world strug- 
gle my country has never wavered in gladly plac- 
ing all its resources at the service of the Allied 
cause. This we did in the conviction that the Allies 
stood for truth, justice, and freedom, the three 
supreme values which have been in a special way 
associated with the history and very existence 
of Lebanon. 

Thousands of our children, or of their imme- 
diate descendants, have since the beginning joined 
tiie Allied armies fighting practically in every 
battlefield; and many of them have paid the high- 
est price of their lives for the common cause. 
Lebanon in fact wanted to declare war on the Axis 
nations long before we were able to formally do so 
last February. 

But we regard our greatest contribution to 
the war effort to lie in the moral and intellectual 
spheres. Imbued with that love of liberty which 
our ancient mountains and traditions have always 

* The Honorable Charles Malik. 



DEPARTMENT OF STATE BULLETIN 

fostered, and ia'^pired by the heroism of the United 
Nations, our thinkers and writers, not only within 
our borders but throughout the entire Middle East, 
and oven beyond, have during these critical years 
turned the potent weapon of ideas in the service 
of freedom and democracy. It is not easy to pic- 
ture the state of mind of the Near East during the 
present war without the intellectual agency of the 
Lebanese. 

I feel it a great honor to be asked by my Gov- 
ernment to sign on behalf of Lebanon the Declara- 
tion by United Nations. In joining today this 
great family of nations my country looks forward 
not only to the approaching moment of victory, 
but also to the great tasks of collaboration now and 
after the war for the building up of an enduring 
peace. 

Remarks by the Viceroy of the Hejaz and Min- 
ister of Foreign Affairs of Saudi Arabia^ 

[Released to the press April 12] 

I am exceedingly happy to be here today as a 
representative of my country, Saudi Arabia, in 
order to sign the Declaration by United Nations. 

The Government of Saudi Arabia believes sin- 
cerely in those lofty principles for which the 
United Nations stand and are still struggling to 
preserve, and which ultimately will prevail over 
the tyranny and oppression which the enemy has 
attempted to impose upon all mankind. 

The Government of Saudi Arabia joins with the 
other United Nations in declaring that peace, jus- 
tice, and righteousness must obtain throughout 
the world, and that international relations must 
be founded upon these principles. 

I am very glad to say that these principles are 
identical with the tenets of the Moslem faith to 
which 400 million people of the world subscribe, 
and which the Government of Saudi Arabia has 
adopted as its Constitution. It is a fundamental 
principle of the Moslem faith that righteousness, 
justice, peace, and brotherhood constitute the basis 
of relationships among men. 

At this time when we are assured of final victory 
and are about to convene at San Francisco to lay 
the foundation of lasting peace and security, the 
Government of Saudi Arabia earnestly hopes that 
the forthcoming Conference will be successful in 
attaining its objective in introducing a new era in 
which prosperity, righteousness, and happiness 
will prevail throughout the- world. 

• His Royal Highness Amir Faisal. 



APRIL 15, 1945 



683 



American Prisoners of War in Germany 

JOINT STATEMENT BY THE SECRETARY OF STATE AND THE SECRETARY OF WAR' 



[Released to the press by the War Department April 12] 

Since the beginning of this j'ear there has been 
a steadily increasing failure on the pai't of the 
German Government to provide, according to the 
standards established by the Geneva Convention, 
for American prisoners of war in German custody. 
Accordingly, the Government of the United States, 
with the cooperation of the Swiss Government as 
protecting power, the Swedish Government, the 
American Red Cross, and the International Red 
Cross, has been and is doing everything within 
its power to get food and other supplies to these 
men. 

In general, conditions under which American 
prisoners are held in Germany today are deplor- 
able. The offensives of the Allied armies on the 
east and on the west have overrun 27 of the pris- 
oner-of-war camps and hospitals out of the 78 in 
which American soldiers were known to be held. 
These military operations have resulted in the lib- 
eration of approximately 15,000 Americans on the 
eastern and western fronts. However, the German 
Government has hastily evacuated 36,000 Ameri- 
can prisoners into the interior of Germany, where 
34,000 others were already being held. 

The conditions under which many of these 70,000 
men are living today are due to a large extent to 
Germany's fanatical determination to continue a 
hopeless war, with a resultant disintegration under 
disastrous military defeat. Her transport system 
is demoralized, administrative chaos has resulted, 
and there has been a loss of effective central con- 
trol. 

The movement of these 36,000 American pris- 
oners into the interior of Germany, together with 
thousands of other Allied prisoners and millions 
of civilians, was accomplished in many cases on 
foot. The German Government made little or no 
preparation to provide food, shelter, and medical 
care for these prisoners, who were marched long 
distances under extreme weather conditions. 
Many of them arrived at their destinations ex- 
hausted and sick. Those who were unable to com- 
plete the marches were eventually transported to 
railheads, from which they were moved by freight 

640738—45 1 



trains to prisoner-of-war camps deeper in Ger- 
many. 

The constant compressing of these prisoners into 
camps in an ever-narrowing area has resulted in 
extreme hardship. Food and sanitary provisions 
have suffered, and disrupted transport facilities 
have resulted in a shortage of Red Cross supplies 
in many places. 

In an effort to relieve this situation, large cen- 
tral supply depots of Red Cross stocks were estab- 
lished in areas where there were large concen- 
trations of Allied prisoners. In northern Ger- 
many, Liibeck was the German port of entry for 
materials shipped via Sweden. Moosburg, in Ba- 
varia, was the railhead for delivery of supplies 
from Switzerland. The locations of these depots 
may be changed in accordance with changes in 
prisoner concentrations, and changes in the oper- 
ational situation. 

Ample stocks are available in Sweden and Swit- 
zerland (o keep these depots provided. At present, 
a total of 163,580 tons of Red Cross supplies, in- 
cluding millions of individual food parcels, are 
either available in Liibeck and Moosburg for trans- 
shipment into Germany or are awaiting shipment 
in Switzerland and at the ports of Toulon, Gote- 
borg, Lisbon, Marseille, and Barcelona. 

Supplies are moved constantly from Sweden to 
Liibeck in small Swedish coastal vessels. Railroad 
cars have been made available for an International 
Red Cross pool for the carriage of supplies from 
Switzerland into Germany. A total of 525 rail- 
road cars have been supplied for this service from 
non-German sources. During the first 12 days of 
March, Germany provided 44 railroad cars for the 
transport of 500 tons of Red Cross supplies from 
Switzerland. 

The principal problem is that of transporting 
these supplies to the prisoner-of-war camps after 
they have arrived in Germany. Recourse is being 
had to truck convoys. These have been furnished, 
together with fuel, from Allied governmental and 
military sources. They are operated by the Inter- 
national Red Cross. Approximately 250 trucks 

' Edward II. Stettinius, Jr., and Henry L. Stimson. 



684 

are reported to be operating at present in this serv- 
ice in southern Germany, and G8 in northern Ger- 
many. Additional trucks are being assembled and 
put into service as soon as available. 

In many cases, Allied prisoners of war are driv- 
ing the relief trucks. Military authorities report, 
with particular reference to the southern area, 
that the facilities for moving the supplies are 
improving. 

Despite chaotic conditions inside Germany, 
there is evidence that supplies are reaching some 
of the pi-isoner camps. Efforts to get supplies to 
all of the remaining camps will continue 
unremittingly. 

These facts are presented so that the American 
people may have authoritative information re- 
garding the conditions under which American 
prisoners are being held in Germany, and knowl- 
edge of the efforts being made to ameliorate those 
conditions. 

In addition to the suffering caused by the con- 
ditions here described, instances are being daily 
uncovered of deliberate neglect, indifference, and 
cruelty in the treatment of American prisoners, 
actions which have shocked the entire civilized 
world. These atrocities are documented by the 
pitiable condition of liberated American soldiers. 
The American Nation will not forget them. It is 
our relentless determination that the perpetrators 
of these heinous crimes against American citizens 
and against civilization itself will be brought to 
justice. 

Anniversary of Nazi Attack 
On Denmark and Norway 

Statement by PRESIDENT ROOSEVELT 

[Released to the press by the White House April 9] 

Today marks the anniversary of the infamous 
and ruthless attack on Denmark and Norway. For 
five long years the Danish and Norwegian peoples 
have suffered under the heel of the Nazi oppressor. 
Yet never has their courage lagged. Never have 
they ceased to resist. Very soon their period of 
martyrdom will be ended. Then, as the peoples 
of Denmark and Norway have fought as Allies 
in the common struggle against the forces of ag- 
gression, so will they work with the other like- 
minded nations to insure the maintenance of world 
peace and security. 



DEPARTMENT OF STATE BULLETIN 

Operations of UNRRA 

SECOND QUARTERLY REPORT' 

[Released to the press by the White House April 111 

The text of the President's letter of transmittal 
of the second quarterly report on UNRRA to the 
Congress follows, in part : 

To THE Congress of the United States of 
America : ... In the course of their victories 
United Nations armies have liberated millions of 
people and have done their best to provide them 
with a minimum amount of essential civilian sup- 
plies. But the needs of the liberated people can- 
not be met by the armed forces alone. Their chief 
task is to fight and to defeat the enemy. 

During the course of the war UNRRA can help 
the liberated people only to the extent that military 
considerations of operations, supply, shipping, and 
distribution make it possible. The requirements 
of the armed forces for accelerated military opera- 
tions have had the first call on our supplies, our 
shipping, and the unloading and transportation 
facilities in the liberated areas. 

Notwithstanding the exigencies of the war 
UNRRA has shipped some supplies to the liberated 
areas and UNRRA personnel has begun to aid in 
the distribution of these supplies. It has begun, 
too, to assist in the immense task of repatriating 
the millions of displaced United Nations nationals 
and to assist in preventing and controlling the 
spread of disease among the victims of war. As 
rapidly as circumstances permit, UNRRA is fur- 
nishing emergency and essential aid to the heroic 
people who fought the Nazis before the invaders 
overran their lands, who fought them later during 
the period of occupation, and who are now fighting 
side by side with the forces of the other United 
Nations. 

We in America, who have been so fortunate as 
to have the battle for the world waged beyond our 
shores, propose as participants in UNRRA to do 
all in our power to help these victims of war begin 
to regain their strength so that they can help 
themselves and assume their rightful places as 
partners in achieving victory and in building a 
lasting peace. 

Franklin D. Roosevelt 
The White House 

April 11, 191)5. 



' In accordance with the act of March 28, 1944. 



APRIL 15, 1945 



685 



Food and Agriculture Organization of the 

United Nations 

Statement by the SECRETARY OF STATE ^ 



[Released to the press April 12] 

1 REGRET \-ERT MUCH that because I am meeting 
this week in almost continuous session with the 
other members of the United States Delegation to 
the San Francisco conference it is not possible for 
me to come before j'ou in person to make this state- 
ment in behalf of United States participation in 
the Food and Agriculture Organization of the 
United Nations. 

The responsibilities which it is proposed that 
the Food and Agriculture Organization shall un- 
dertake are intimately bound up with the success 
of the world Organization which we hope to es- 
tablish as a result of our labors at San Francisco. 

Most of the discussion of the world Organization 
has centered upon its power to prevent or to sup- 
press aggression. That is, however, only half of 
the task that the world Organization must ac- 
complish if it is to be successful. 

Hunger, poverty, disease, and ignorance are con- 
ditions that give aggressors their chance. We shall 
not be able to achieve a lasting peace unless the 
nations of the world collaborate successfully to 
reduce and eventually remove the economic and 
social causes of war. We know also that without 
this collaboration it will be impossible to achieve 
and maintain an expanding economy and higher 
standards of living for the American people after 
the war. We cannot have prosperity in the United 
States if large areas of the rest of the world are 
sunk in depression. 

The proposed Food and Agriculture Organiza- 
tion will provide the means for the close collabo- 
ration that is necessary in a vitally important area 
of economic action. Its purpose is to assist the 
United States and other United Nations to achieve 
improved standards of nutrition, higher and more 
stable levels of farm income, and more efficient 
production and distribution of all food and agri- 
cultural products.'' 

The proposed Food and Agricidture Organi- 
zation is a direct outgrowth of the initiative 
originally taken in this field by the United States 
Government. In May 1943 a United Nations 
Conference on Food and Agriculture met at Hot 



Springs, Virginia, on the invitation of this Gov- 
ernment. This was the first United Nations con- 
ference. It resulted in the establishment of a 
United Nations Interim Commission on Food and 
Agriculture to carry forward the work of the 
conference and to recommend to the member gov- 
ernments a plan for a permanent organization. 

The Interim Commission drew up a report and 
a constitution for the proposed permanent organi- 
zation which were submitted to the United Na- 
tions governments for their consideration last 
August. The bill which you have before you pro- 
vides for acceptance of this constitution and for 
participation by the United States in the work 
of the Organization. 

Eighteen nations, including Great Britain, 
China, the Netherlands, Mexico, and 14 others, 
have already accepted the constitution. The Food 
and Agriculture Organization, under its constitu- 
tion, will become an established fact after 20 na- 
tions have accepted membership. It is therefore 
to be expected that the Organization will be able 
to start functioning in the very near future. 

This will not be too soon, for we know that many 
serious problems in nutrition, food, and agricul- 
ture will be pressing for solution in the years im- 
mediately following the war, and that prepara- 
tions to deal with them effectively can be under- 
taken only through the organized international 
cooperation which this Organization will make 
possible. 

It should be emphasized that under the proposed 
constitution the Food and Agriculture Organiza- 
tion will have no powers of compulsion. It will 
have powers of advice and reconmaendation only. 
Nor will the Organization have any functions con- 
cerned with relief. It can, however, have a de- 
cisive influence toward meeting successfully many 
problems of transition from wartime to peacetime 

' Read by Assistant Secretary Acheson before the Com- 
mittee on Foreign Affairs of the House of Representatives 
on Apr. 12, 1945. 

' For article on the purpose and structure of the pro- 
posed Food and Agriculture Organization, see Bulletin 
of Feb. IS, 1045, p. 225. 



686 



DEPARTMENT OF STATE BULLETIN 



agricultural production and consumption and to- 
ward developing long-range policies and programs 
of both a national and an international character 
which will raise levels of nutrition and of real 
income for agricultural producers. 

Under the Dumbarton Oaks Proposals, which 
will be the basis for the Charter of the world 
Organization that the United Nations will under- 
take to write at San Francisco, the Food and Agri- 
culture Organization would come within the 
framew'ork of the world Organization. Its rela- 
tionship to the Economic and Social Council and 
to the General Assembly of the world Organiza- 
tion would be similar to that of the International 
Labor Office, the International Monetary Fund, 
the International Bank for Reconstruction and 
Development, and other specialized agencies in the 
social and economic field. The functions of all 
these agencies are intimately interrelated with 
each other and with the over-all objectives of 
security from both depression and war. 

I look with high hope upon the results which 
can be achieved by the Food and Agriculture Or- 
ganization, provided that the United States and 
the other United Nations establish it promptly and 
give it their full support. Great advances have 



been made in recent years in the science of nutri- 
tion and in methods of agricultural production 
and conservation, which make it possible today, 
for the first time in history, to produce enough of 
the right kinds of food for everybody. We have 
yet to learn, however, how to apply this new 
knowledge so that the fear of hunger and famine 
can ultimately be banished from the earth. 

I regard it as essential to the future security and 
well-being of the United States, as well as of the 
rest of the world, that we make a beginning toward 
this objective through the Food and Agriculture 
Organization. We shall not be able to attain the 
high levels of employment in this country which 
will assure to every American child the good food 
he needs and to every American farmer the decent 
living conditions which he should have if other 
peoples in the world are so hungry and impover- 
ished that they cannot trade with us on a mutually 
profitable basis. Nor can we prevent the rise of 
some future dictator whose aggressions would 
plunge the United States and the rest of the world 
into another and disastrous war unless real prog- 
ress is made in the next decade toward advancing 
the food and agricultural standards of all peoples. 



Statement by ASSISTANT SECRETARY ACHESON 



[Released to the press April 12] 

THE Secretary's statement which I have just 
read covers the place of the FAO in our total 
foreign policy and its importance as a means of 
achieving international cooperation for the main- 
tenance of an expanding world economy in one 
of the most important segments of that economy. 
I should like to talk in somewhat greater detail 
about the structure and functions of the Organi- 
zation itself. 

How THE Organization Would Carry on Its 
Work 

At the outset I think we should all be clear that 
what is proposed, here is an organization for 
pooling the best knowledge and experience of 
all countries in the fields of nutrition, agricultural 
production and marketing, and in the efficient uti- 
lization of the land, forest, and fishery resources 
of the world. It will also afford an international 
forum for problems of mutual interest in these 

'Made before the Committee on Foreign Affairs of the 
House of Representatives on Apr. 12, 1945. 



fields and for discussion of questions of public 
policy which affect the interests of the producers 
and consumers of agricultural products and of 
their governments. 

In order to avoid constant repetition, I should 
like also to remind you at the outset that by the 
terms of the constitution of the Organization it 
will deal with problems relating not only to agri- 
culture but also to forestry and to fisheries, and 
that wherever applicable the term agriculture 
applies to these two other industries as well. 

In addition to affording a forum for discus- 
sion of problems of practice and policy, the Or- 
ganization through its permanent staff will also 
be continually engaged in the collection and dis- 
semination of statistical and teclmical informa- 
tion in order that knowledge and discovery 
wherever made may be available to enliven the 
economy of all parts of the world. 

The Organization is strictly a fact-finding re- 
search and advisory institution ; it has no powers 
or authority over the member governments; it 



APRIL 15, 1945 



687 



does not take action to put into effect by itself 
any recommendations that it may make or any of 
the scientific knowledge and techniques which it 
may disseminate. Those remain matters for in- 
dividual governments and their citizens. 

In some respects therefore this is a less spec- 
tacular type of organization than an agency in 
which governments lodge various powers of ac- 
tion. It performs its functions by the quieter but 
nonetheless effective process of adding to man's 
knowledge and to the wider dissemination of it 
and by the process of exchanging views about the 
application of that knowlei Ige. These are the proc- 
esses which have formed the foundation of all 
improvement in the material welfare of mankind. 

As expressed in the preamble of the constitution, 
the purposes to which these activities are all di- 
rected are the promotion by the member nations 
of "the common welfare by furthering separate and 
collective action on their part for the purposes of 
raising levels of nutrition and standards of liv- 
ing of the peoples under their respective jurisdic- 
tions, securing improvements in the efficiency of 
the production and distribution of all food and 
agricultural products, bettering the condition of 
rural populations, and thus contributing toward 
an expanding world economy". 

Specific Functions of the FAO 

Article I of the constitution then proceeds to 
define more precisely the functions which are to 
be performed by the Organization in the further- 
ance of these broad purposes. These include first 
the collection, analysis, interpretation, and dis' 
semination of information relating to nutrition, 
food, and agriculture. The second major function 
of the Organization is the promotion and, in ap- 
propriate cases, recommendation of national and 
international action with respect to all types of 
research relating to food and agriculture ; the im- 
provement of education and administration and 
the spread of public knowledge in these fields ; the 
conservation of natural resources and the adoption 
of improved methods of agricultural production; 
improvement of processing, mai-keting, and dis- 
tribution of agricultural products; the adoption 
of policies for the provision of adequate agricul- 
tural credit, both national and international ; and 
tlie adoption of international policies with re- 
spect to agricultural commodity arrangements. In 
all the fields in this second category of functions, 

640738 — 45 5 



it will be observed that the FAO is not itself the 
active agent for carrying its knowledge or recom- 
mendations into effect; its function is rather the 
promotion of knowledge and of desirable public 
policy in these fields, leaving individual countries 
free to determine to what extent and by what 
methods they give effect to the recommendations 
of the Organization. 

The third main function of the Organization 
is to assist in making technical assistance avail- 
able to governments which desire it, in part by 
providing, in cooperation with governments con- 
cerned, such missions as may be needed to assist 
them in realizing the purposes of the Organization. 

The raw materials for the work of tlie Organi- 
zation will be in large part the reports and infor- 
mation periodically made available by the member 
governments and such special reports as may be 
requested on the progress made toward achieving 
the purposes of the Organization as set forth iu 
the preamble. These reports and statistics will 
serve a dual function : They will enable the Organ- 
ization to serve as a research and statistical clear- 
ing-house which member nations can use to help 
them achieve better levels of living for themselves, 
and in addition they will serve as a perpetual inter- 
national reminder that facts and statistics and 
advice must find ultimate expression in human 
betterment. This two-way flow of information 
between members and the Organization will thus 
serve both to deepen and broaden the bases of 
knowledge and will cause each nation to examine 
its own experience and to determine how well it 
has applied the best knowledge and techniques 
available to it. 

Structure of the Organization 

In keeping with its character, the structure of 
the Organization is straightforward and simple. 
It consists of a representative conference, an ex- 
ecutive committee, a director general, and a per- 
manent staff. The purely fact-finding advisory 
and recommendatory nature of the Organization 
is reflected in its structure. Each nation, large or 
small, has one vote. At the outset, the 44 countries 
which were represented at the Hot Springs con- 
ference and which have worked together in the 
Interim Commission on Food and Agriculture are 
entitled to membership simply upon acceptance 
of the constitution. Provision is made for the ad- 
mission of other countries with the concurrence 
of two thirds of all members of the Organization. 



688 



DEPARTMENT OF STATE BULLETIN 



The deliberative and representative work of the 
Organization is to be carried on in a conference 
which will meet at least annually at which each 
member will have one representative who may be 
assisted by alternates, associates, and advisers. 

A small executive committee of not less than 
9 nor more than 15 members is provided to carry 
on such work of the conference as may be delegated 
to it, with the exception of certain powers, such 
as the powers of amendment of the constitution, 
of determining relationships to the general inter- 
national Organization, admission of new members, 
et cetera, which are specifically reserved to the con- 
ference itself. 

The day-to-day work of the Organization is to 
be carried on by a permanent staff under the super- 
vision of a director general, who will be the prin- 
cipal executive officer of the Organization. 

Relationship With Other Organizations 

We do not expect the FAO to work in a vacuum. 
The Organization will work closely with the mem- 
ber governments. In addition, the purposes of 
the Organization in its particular fields are identi- 
cal with the broad economic objectives of the gen- 
eral Organization to be perfected at San Fran- 
cisco, and the objectives of the other specialized 
economic and social organizations. In the consti- 
tution, provision has been made for close coopera- 
tion between the FAO and other specialized organ- 
izations with related responsibilities. Provision is 
also made for the Organization to constitute, with- 
out losing its autonomy, a part of the general inter- 
national Organization, under arrangements to be 
worked out between the two organizations. In 
particular, we envisage that this means that 
through the projected Economic and Social Coun- 
cil of the United Nations Organization the work 
of the FAO will be brought into coordination with 
the work of the Economic and Social Council and 
of the United Nations Organization generally, and 
that the work of all the specialized organizations, 
of which the FAO is one, will be kept in harmoni- 
ous relationship. 

One very special r(^lationship remains to be 
worked out. This relates to the International 
Institute of Agriculture at Rome. That Institute, 
which has in recent years been an Axis captive, has 
always had a more limited scope than is projected 
for the FAO. It obviously would be undesirable 
to maintain two organizations in the same field 
which would inevitably tend to be competitive 



wit h each other. In the view of this Government, 
prompt steps should be taken, as soon as the FAO 
is established, to absorb the functions and the 
physical resources of the International Institute 
into the FAO, and we have been giving careful 
consideration to procedures by which this might 
be brought about. Clearly, however, these steps 
cannot be taken until there is an organization to 
absorb the International Institute. As soon as 
the possibility of absorption exists, it would be 
the intent of this Government to consult with other 
members of the Rome Institute with a view to 
bringing about a prompt amalgamation. 

Obligations of Members 

Finally, I sliould like to enumerate the require- 
ments of membersliip in the FAO. They are few 
and simple. 

1. The requirement to make periodic reports 
on the experience and activities of this country 
in the fields of food and agriculture such as are 
customary with respect to any international or- 
ganization of which we are a member. This would 
entail as a matter of course making available to 
the Organization the great volume of statistical 
material which we normally produce for publica- 
tion in this country as well as occasional special 
studies desired by the FAO. 

2. The requirement, subject to the requirements 
of our constitutional procedure, to contribute a 
proportionate share of the budget of the Organi- 
zation. For the first year, provision is made for 
a total budget of 21/0 million dollars, of which the 
United States share is 25 percent, or $625,000. It 
is envisaged that in the longer run the annual 
budget may reach approximately 5 million dollars, 
and in recognition of this fact H. J. Res. 145 would 
authorize the appropriation of such sums, not to 
exceed $1,250,000 annually, as may be required 
for expenditure under the direction of the Secre- 
tary of State for the contribution of this Govern- 
ment to the expenses of the Organization. 

3. The requirement to accord to the Organiza- 
tion and its staff such diplomatic privileges as 
may be possible under our constitutional proce- 
dures. These are matters which this Government 
will need to consider in connection with other in- 
ternational organizations as well as the FAO, and 
the Congress will undoubtedly want to consider 
the subject as a whole rather than take it up with 
particular reference to any one organization. 



APRIL 15, 1945 



689 



4. Finally, the requirement to respect the inter- 
national character of the staff of the Organization, 
and not to attempt to influence any United States 
nationals who might be selected for that staff. 

These duties oi membership merely reflect the 
principles which have long motivated this Gov- 
ernment in its relations with other governments — 
namely, the sharing with them of our experience 
and technical assistance in broadening and 
strengthening the bases of their economies in the 
fields of agriculture and nutrition. Wliat is new 



and distinctive about the proposed Organization 
is that for the first time it would draw together 
into one organization consideration of both pro- 
duction and consumption aspects of agricultural, 
forest, and fishery products; it would relate re- 
ciprocally the welfare of the people who produce 
these products and of the people who consume 
them and thus contribute to the stable and expand- 
ing prosperity of two thirds of the world's pro- 
ducers and to the better nutrition of all the world's 
consumers. 



Statement by ASSISTANT SECRETARY CLAYTON 



[Released to the press April 12] 

TTt was my good fortune to be a delegate to the 
-*■ United Nations Conference on Food and 
Agriculture at Hot Springs. It did not take that 
Conference to stimulate my interest in agriculture, 
but the Conference did reinforce my firm belief 
in the necessity for international collaboration if 
we are to have a sane and prosperous agriculture 
throughout the world. 

In the years after the war, the condition of 
foreign trade will directly concern the well-being 
of all the American people. Industry, labor, agri- 
culture, the professions, and the service trades 
have a stake in a vigorous and expanding world 
commerce. If we are to have continuing pros- 
perity and full employment, we shall have to sell 
a lot more goods to other nations than we did in 
the years just before the war, and in return we 
shall have to buy a lot more goods from them. 

These basic facts have been stated many times in 
recent months. They cannot be repeated too often. 
It is very much in our national interest, first, to 
develop a larger total volume of international 
trade, and, second, to maintain for ourselves a 
fair share of the expanding total. 

I believe that establislmient of the proposed 
Food and Agriculture Organization and the par- 
ticipation of the United States as an active mem- 
ber would contribute substantially to progress to- 
ward both of those goals, even though it would 
have no executive authority over either the course 
of world trade or the farm policies of individual 
nations. 

I shall confine this statement largely to a dis- 
cussion of some of the main reasons I hold that 



'Made before the Committee on Foreign Affairs of the 
House of Representatives on Apr. 12, 1945. 



belief. In so doing I do not wish to suggest in 
any way that I underestimate the importance of 
FAO in the whole broad task of building and 
maintaining a just peace. As you know, approval 
by one more nation — which I trust will be the 
United States — is all that is needed to bring the 
Food and Agriculture Organization into being as 
a functioning mechanism for international co- 
operation. It would be the first of what I hope 
will be an integrated group of world organiza- 
tions for furthering security and prosperity. 

Such considerations are vitally important. I 
am not forgetting any of them in turning to some 
of the more specific possibilities that FAO holds 
for a healthy and growing world commerce in 
which this country will have its full share. 

Every day it grows more obvious that an ex- 
panding international trade will be the key to 
many of the important problems in the years when 
peace has been reestablished. If we are going to 
produce abundantly and make full use of what we 
turn out, for the benefit of both producers and 
consumers, there must be a constantly increasing 
exchange of goods and services among nations. 
If there is not such an exchange, the United States 
and other countries would have to choose between 
lowering levels of living through producing less 
on the one hand, and on the other hand allowing 
farmers and other basic producers to be swamped 
under unmarketable surpluses. 

Eventuallj', there is no dodging that choice. In 
the recent past, nations have tried to find ways of 
eating their cake and having it, too. They have 
sought self-sufficiency through trade barriers and 
bounties. They have tried curtailment of pro- 
duction (never, in the case of agriculture, very 
successfully over any long period). They have 



690 

tried export subsidies in a vain effort to export 
depression conditions along with the commodities 
themselves. 

Over the long pull, none of these attempts has 
worked in the past. There is no indication that 
they would be any more successful in the future. 
Greater consumption, larger, more efficient, better- 
balanced production, and greater world trade still 
offer the only real way out of the woods. 

I am convinced that the nations of the world, 
working together, can find many practical ways 
for expanding production, consumption, and 
world trade. Creation of a Food and Agriculture 
Organization can stimulate this process substan- 
tially, not only for food and agriculture products 
but for other commodities as well. 

First, as to production. Already the highly de- 
veloped agricultural countries have built up a 
great body of knowledge on how to produce food 
and agriculture products abundantly and effi- 
ciently, and they are learning more every year. 
Through the facilities of FAO this knowledge can 
be pooled and can be carried quickly to the far 
corners of the earth, including the countries that 
are not yet so far advanced. 

Even in the great producing nations there is 
plenty of room for larger, more efficient produc- 
tion, providing, of course, that the nature of the 
production is balanced against world needs and 
that ways are found to get food and other agricul- 
tural products from the producers to the people 
who need them. Many questions can be settled and 
many ideas developed around the international 
council table provided by FAO. 

More agricultural efficiency in highly developed 
countries like our own will mean that fewer peo- 
ple can turn out more products and maintain 
higher standards of living, and that other people 
can leave agriculture to produce other goods and 
services that the people of the world want. 

In the less developed countries, the first result 
of greater efficiency in agriculture will be to give 
underfed people more to eat, and the second re- 
sult to release some of the farm people for jobs 
in new industries and trades. Then the less de- 
veloped countries would begin to create wealth 
to exchange with other nations. They would for 
the first time become good customers, and world- 
wide levels of living would move up another notch. 
The second major point I have in mind con- 
cerns the way FAO could help increase total con- 
sumption of food and other agiicultural products 



DEPARTMENT OF STATE BULLETIN 

by emphasizing the need for better nutrition and 
better levels of clothing and housing. Greater 
consumption must go hand in hand with greater 
production. Otherwise, increased production 
makes no sense at all. During recent years the 
world has learned how much trouble unused pro- 
duction can cause, not only to producers but even- 
tually to consumers as well. 

The efforts of every country to seize advantage 
for itself seem especially tragic and futile now 
that we can look back and realize that all the time 
the total world market they were competing for 
was becoming smaller. World trade in agricul- 
tural products shrank more than 4 percent from 
1929 to 1937 in terms of volume and nearly 60 
percent in constant dollar value. There were times 
in the period when the dip was much gi-eater. 
During the same period, to make matters worse 
for this country's farmers, our share of the dwin- 
dling total dropped from more than 13 to between 
8 and 9 percent. As we see it now, the great need 
was for greater consumption. 

Naturally, a great part of the job of balancing 
consumption against production will need to be 
done within each nation. Even for those internal 
tasks the information gathered by FAO and its 
recommendations on the basis of pooled experi- 
ence can be extremely valuable. 

The rest of the job of establishing balance de- 
pends on the way world commerce is conducted. 
That brings me to the last of my three major 
points — the immense contribution FAO can make 
to a constructive and expanding international 
trade. 

Fundamentally, of course, healthy world com- 
merce requires an atmosphere of mutual trust and 
cooperation. As long as each nation has the fear 
that other nations are simply waiting for the time 
to attack it, the scramble for self-sufficiency in food 
and agriculture products will be repeated. FAO, 
as the first of a number of organizations all work- 
ing together for international betterment, can do 
much to create the sort of atmosphere that is 
needed. 

More specifically, information on world-wide 
supplies and requirements for fish, farm, and for- 
est products can be most helpful. Some of our 
world trade troubles in the years between the two 
great wars came from the simple fact that we 
often did not know where supplies were located, 
how great they were, and where they were needed 
throughout the world. Through FAO, the na- 



APRIL IS. J9i5 



691 



tions of the world can gather and analyze this 
information. 

Obviously, it will not be the place of FAO to 
undertake the actual job of taking the sand out 
of the wheels of world commerce. Groups of 
nations, and probably a separate international 
organization, will handle the working details of 
making trade run more smoothly and in greater 
volume. But basic information and basic recom- 
mendations will be badly needed by those who are 
actually directing the course of trade among na- 
tions. FAO will be perfectly suited to the task 
of supplying and analyzing the primary facts. 

This last point and the others I mentioned ear- 
lier add up into one great and simple truth. 



Working together, the nations of the world can 
expand world trade and raise living levels of pro- 
ducers and consumers of food and agriculture 
products. We know how to produce and we know 
the need for greater production. The need now is 
for a world-wide balancing of consumption with 
production. When nations strive for that balance 
separately their efforts cancel each other out. We 
know that from experience. Intelligent coopera- 
tion among nations is what is needed. Establish- 
ment of the Food and Agriculture Organization 
will do much to stimulate that kind of cooperation 
and make it productive of the fullest results. 

The sooner FAO can be set up, the brighter the 
outlook for world commerce in the days ahead. 



Consideration of Resumption of Exports From France to the 
United States Through Private Channels 



[Released to the press April 14] 

The interested United States Government agen- 
cies, including the Departments of State and Com- 
merce, the Treasury Department, the Foreign Eco- 
nomic Administration, and the War Shipping Ad- 
ministration, have been giving their careful con- 
sideration, in consultation with the appropriate 
French authorities, and the Allied military au- 
thorities, to the resumption of exports from 
France to the United States through private chan- 
nels.^ While it is recognized that various difficul- 
ties of a practical nature remain to be overcome, 
the French and American authorities are in agree- 
ment that only the minimum of governmental re- 
strictions required by current war conditions will 
be interposed. 

The French authorities on their part have stated 
that export permits must be obtained, primarily 
to assure compliance with existing exchange-con- 
trol regulations and in certain cases to conserve 
limited supplies of items essential to the French 
economy. 

While the critical inland-transportation situa- 
tion in France is well known, the Provisional 
French Government is confident that it will be 
able to clear the way for limited movements of 
goods from manufacturing and production cen- 
ters to ports of loading in transport facilities that 
otherwise would return empty. Arrangements are 



' BnLLBn-iN of Jan. 21, 1W5, p. 90. 



being made to designate vessels to carry westbound 
cargo where this can be arranged without caus- 
ing delay in turn-around. 

The United States Treasury Department issued 
on April 14, 1945 a general license under its freez- 
ing controls which will permit all financial trans- 
actions involved in trade with France. By virtue 
of this license transactional communications relat- 
ing to trade henceforth may be freely exchanged 
with persons or firms in France. 

It was pointed out that financial transactions 
relating to French exports may be made through 
normal banking and commercial channels. In this 
connection, it was added that a number of Ameri- 
can banks in Paris are now functioning. 

An additional detail which is receiving atten- 
tion is the reestablishment of a freight tariff sched- 
ule for westbound traffic, and it is expected that 
information on this subject can be obtained in the 
near future by interested importers from the War 
Shipping Administration, Washington, D.C., or 
local offices of shipping lines. 

It is further suggested that importers should 
carefully check the landed duty-paid cost of im- 
ports from France to ascertain the possibility of 
establishing sale prices under OPA price ceilings. 
No special import licenses will be required for im- 
ports from France into the United States unless 
articles are included in WPB order M-63 or War 
Food Administration order WFO-63. 



692 



DEPARTMENT OF STATE BULLETIN 



The facilities of the Bureau of Foreign and 
Domestic Commerce in Washington and of the 
field offices of the Department of Commerce 
throughout the United States are available for 
giving appropriate assistance to United States im- 
porters and for obtaining specific data from the 
American Embassy and Consulates in France. 

Also, the services of the U. S. Commercial 
Company are offered to import trades in the 
United States on an entirely optional basis 
with a view to facilitating their proposed trans- 
actions. A fee to cover the cost of its services is 
charged by the U. S. Commercial Company. A 
representative of the U. S. Commercial Company 
is now in Paris. 

The French authorities are assembling data on 
articles expected to be available for export from 
France, including details of quantities, prices, et 
cetera, which will be made available to interested 
firms and individuals, through the Department of 
Commerce and its field offices. 

In making this announcement the interested 
Government agencies wish to avoid giving rise 
to undue optimism on the part of American im- 
porters of French products. Aside from the prob- 
lems mentioned it is obvious that the early resump- 
tion of imports in volume from France must be 
subordinated to major considerations involved in 
the prosecution of the war. 

With regard to exports from the United States 
to France, it is pointed out that for the time being 
the Provisional French Government will continue 
to handle all transactions on a governmental basis. 

Visit of Colombian Educator 

[Released to the press April 12] 

Dr. Hernan Posada Gonzalez, Director of the 
University of Antioquia, Medellin, Colombia, is 
a guest of the Department of State on a three 
months' tour of universities and medical centers 
in this country. He is especially interested in con- 
ferring with American colleagues in the field of 
internal medicine. 

Dr. Posada received his medical education at 
the Faculte de Medicine in Paris and at the Uni- 
versity of Antioquia. In 1930 he became chief of 
the Medical Clinic of the University of Antioquia, 
in 1936 professor of clinical semeiology, and sub- 



sequently dean of the Faculty of Medicine. In 
194-1 Dr. Posada was named director of tlie Uni- 
versity. Dr. Posada served as Director of Public 
Education, Department of Antioquia. from 1936 
to 1937 and again from 1938 to 1939. He is a mem- 
ber of the Academy of Medicine in Medellin and 
is the author of various works on clinical surgery. 
This is Dr. Posada's first trip to the United 
States. His tentative plans for travel in this coun- 
try include visits to New York, Boston, Baltimore, 
New Orleans, Rochester, Chicago, Ann Arbor, Co- 
lumbus, and the West Coast. 

Visit of the Director of the 
Haitian Red Cross 

[Released to the press April 12] 

Dr. Joseph P. Buteau, of Port-au-Prince, direc- 
tor of the Haitian Red Cross, has arrived at Wash- 
ington as the first stop on a tour of typical Red 
Cross centers in this country. Dr. Buteau, who is 
guest of the Department of State, is interested es- 
pecially in observing administration and hospitals. 
He has had long experience in the public-health 
service of Haiti. 

Statement Concerning the 
"Awa Maru" 

[Released to the press April 11] 

The Navy Department has informed the Depart- 
ment of State that, about midnight April 1 east- 
longitude date, a ship was sunk by submarine ac- 
tion at a position approximately 40 miles from 
the estimated scheduled position of the Awa Maru, 
a Japanese vessel which was traveling under Al- 
lied safe-conduct. No lights or special illumina- 
tion were visible at any time. The ship sank al- 
most immediately. One survivor has stated that 
the ship was the Awa Mam. The Awa Mai'u was 
given an Allied safe-conduct because it had de- 
livered as part of its cargo relief supplies to Allied 
nationals held by the Japanese and was returning 
to Japan. 

The United States Government is now in com- 
munication with the Swiss Government about this 
matter and the Department of State is sending an 
appropriate communication to the Japanese Gov- 
ernment through the Swiss authorities. 



APRIL 15, 1945 



693 



The Americas Look Ahead 



Address by ASSISTANT SECRETARY ROCKEFELLER' 



[Released to the press April 12] 

IT IS A GREAT PLEASTTRE to be With you today, -with 
our many friends of the Diplomatic Corps and 
the members of the Rotary Club who have done so 
much to further the program of active inter- 
American cooperation. Both the New York 
Kotary Club and Rotary International have made 
an important contribution not only to the neces- 
sities of war but also the broader hopes for the 
future. 

I believe in tomorrow. I believe in tomorrow, 
because I am convinced that during these testing 
wartime days most of us have learned lessons that 
have given us broader vision, more understanding, 
and greater wisdom. Those qualities will be 
needed to travel the long, hard road from a world 
that lies in ruins toward a world that is rebuilt, 
that is functioning effectively, that is enjoying 
peace and security. They will be amply needed 
to help us move toward a world in which the people 
are free, self-governing, with expanding econo- 
mies, higher wages, rising standards of living, and 
education for all, with the people holding a deep 
sense of responsibility for the acts of their respec- 
tive governments in domestic and world affairs. 

Last month in Mexico City was held the Inter- 
American Conference on Problems of War and 
Peace. Here were gathered representatives of the 
peoples of 20 American nations — men who believe 
in the future. They are men who believe that by 
mutual consultation, candid discussion, hard work, 
and cooperation the problems of the present can 
be solved in the best interests of all and that plans 
to meet the problems of the future can be worked 
out and gradually made effective in meeting the 
serious political, social, and economic trials that 
are ahead of us. 

There was much to be done and much was done 
as the delegates toiled without thought of time or 
fatigue to solve the most pressing problems that 
face the hemisphere and the world today. They 
outlawed aggression in the American hemisphere 
and thus gave a new sense of security to the people 
of the Americas. They advocated a world Organ- 
ization for the maintenance of peace and security. 
They reorganized and strengthened the inter- 



American system through the Pan American 
Union. They agreed to continue with vigor their 
drive against subversive activities, and to arrest 
war criminals. They unanimously addressed a 
message to Argentina. They agreed to the prin- 
ciples under which they could minimize the eco- 
nomic perils of the transition period, and by which 
all nations in the Americas may strengthen their 
economies, may build their importance in world 
trade, and may give their people the resulting 
economic and social benefits. 

Let me give you some of the background under- 
lying the declarations and their main accomplish- 
ments : ^ 

First, the Act of Chapulfepec, which outlawed 
aggression in the Western Hemisphere: At the 
beginning of the war, the nations of the Americas 
joined together to resist aggression from abroad. 
This was formally declared at the meeting of 
Foreign Ministers at Habana in 1940, when it was 
stated that any act of aggression against an Ameri- 
can nation by a non-American nation was aggres- 
sion against all 21 American nations. At Rio de 
Janeiro in 1942, the economic and military re- 
sources of the Western Hemisphere were mobi- 
lized ; and the peoples of the Americas have stood 
shoulder to shoulder against the common enemy. 

But with the growth of armaments and mili- 
tary expenditures there had crept into the hearts 
of the peoples of many nations the fear that some 
day these materials of war might be used against 
them by their neighbors. Instead of these expendi- 
tures being reduced as the threat of armed in- 
vasion moved away from the Western Hemisphere, 
almost without exception they had been growing. 
Most of the countries could ill afford to carry such 
a heavy burden for military purposes. In some 
countries, these expenditures for arms were run- 
nintr as high as one third of the national income — 



'Delivered before the New York Rotary Club in New 
York, N.Y., on Apr. 12, 1945 and broadcast over the net- 
work of the National Broadcasting Company. 

' For references to the texts of the Act of Chapultepec 
and other resolutions of the final act of the Inter-Ameri- 
can Conference on Problems of War and Peace, see Mr. 
Rockefeller's address on p. 675 of this issue. 



694 



DEPARTMENT OF STATE BULLETIN 



funds which were desperately needed for public 
health, education, and the development of the 
economic resources of the country — forces which 
are basic to the prosperity of the people and the 
growth of democracy. 

Recognizing this situation, the representatives 
of the Governments of Colombia, Brazil, and 
Uruguay introduced resolutions calling for mutual 
guaranty against aggression from within the 
hemisphere as well as from without. These resolu- 
tions were merged into what has since become 
known as the "Act of Chapultepec". It is one of 
the great steps forward in the progress of the peace 
and security of the world. It paves the way for 
drastic reductions in armaments within the hemi- 
sphere. No single act that has ever been taken 
by the American nations has received such en- 
thusiastic support of the people. The provisions 
of the act become effective immediately under the 
existing wartime powers of the various govern- 
ments, and it was recommended that the act ulti- 
mately be made permanent by treaty. 

The act adds the use of joint military force, as 
a final guaranty of peace, to the policies of the 
American nations for the settlement of differences 
by mutual consultation, arbitration, and concilia- 
tion. However, to avoid any possible conflict with 
the ultimate powers of a general international 
Organization for peace and security to be set up 
at the San Francisco conference, the act provided 
that "The said arrangements and the pertinent 
activities and procedures shall be consistent with 
the purposes and principles of the general inter- 
national organization, when established." 

Second, the World Organization: One of the 
questions which has often been raised is whether, 
with the growing strength and unity which exists 
in the Western Hemisphere, there was danger 
that a regional bloc was being developed among 
the Americas which might limit the freedom of 
action of the American nations within the gen- 
eral world Organization for peace and security. 
The eyes of the world were on the Conference at 
Mexico City to see what position would be taken 
there with respect to the proposed world 
Organization. 

The Conference discussed fully the Dumbarton 
Oaks Proposals. At the conclusion of these dis- 
cussions, the Conference unanimously passed a 
declaration endorsing the establishment of a gen- 
eral international organization. In this docu- 
ment they recognize the vital need and desirability 



of an organization built along the lines of the 
Proposals of Dumbarton Oaks, but with full real- 
ism proposed certain suggestions which the Con- 
ference believed would strengthen the proposed 
plan and permit it to accomplish its objectives 
more easily. 

Thus, by the passage of this declaration, every 
American nation represented there affirmed its 
recognition of its responsibilities to the world 
effort and will be pulling first of all for a work- 
able international organization. The results of 
the Mexico City conference have given all the 
American nations a sense of security which will 
permit each one to take part in world affairs as 
individual, free, sovereign nations. 

Third, Reorganization and Strengthening of 
the Inter-American System: The inter-American 
system is unique in the history of the world. Al- 
most a hundred and fifty years ago the countries 
of the Western Hemisphere started thinking to- 
gether, working together, planning together, and 
consulting with each other on the problems of the 
Americas. The Congress of American Nations 
called by Simon Bolivar, the great liberator, which 
met at Panama in 1826, was the first of the inter- 
American conferences. Since 1889 these meet- 
ings have been called repeatedly, especially at 
times of common emergency when the Western 
Hemisphere was faced with political and econo- 
mic difficulties or the threat of invasion. 

Immediately after the last war, because of pre- 
occupation with internal problems, the United 
States slackened its interest in inter-American 
as well as world affairs. Not only did we fail 
to participate in the League of Nations, but also 
withdrew our active cooperation with the other 
Americas in meeting the difficult problems which 
grew out of the transition from war to peace. 
In recent months there had been a growing con- 
cern throughout the Americas that we might 
repeat what happened after the last war and that 
each nation alone would be left to meet the drastic 
economic and social problems of the post-war. All 
of them realize that today no nation, large or 
small, can solve its problems alone and that as 
never before the unity of the Americas is vital to 
the future security and well-being of the peoples 
of this hemisphere. 

However, the truth of the matter was that for 
some years the United States had realized that 
its future security was rooted in the unity of the 
Americas. Because of this fact and to dispel the 



APRIL 15. 1945 



695 



growing fear we, ourselves, introduced a reso- 
lution to reorganize and strengthen the Pan 
American Union. Other nations introduced res- 
olutions with similar objectives, and the outcome 
was an act which materially expands the 
powers and responsibilities of the Pan Ameri- 
can Union and its Governing Board. It pro- 
vides for a meeting of the Governing Board once 
a week in Washington, a meeting of the Ministers 
of Foreign Affairs of all the American nations once 
a j'ear, and an international conference of Ameri- 
can states every four years. The inter-American 
system is thus operating on political, economic, 
social, and cultural problems at all times. 

Among the new powers assigned to the Govern- 
ing Board are jurisdiction over any questions af- 
fecting the imity or solidarity of the American 
republics and the power to act on matters of com- 
mon military, economic, political, and cultural in- 
terests. The Pan American Union will also draw 
up a charter further strengthening the inter- 
American system, and set up an Inter-American 
Economic and Social Council. 

Fourth, the Message to Argentina:^ At the end 
of the Conference, after passing the Act of 
Chapultepec, to provide security against aggres- 
sion from within this hemisphere, after strength- 
ening the inter- American system through the Pan 
American Union, after taking steps to continue 
the control of subversive activities and the im- 
prisonment of war criminals, and after laying the 
groundwork for the joint solution of the serious 
economic problems ahead of us, the members of 
the Conference were prepared to consult on the 
Argentine situation. 

They unanimously agreed on a message to Ar- 
gentina. This message made three points: That 
unity of the peoples of the Americas is indivisible 
and that the "Ai-gentine nation is and always has 
been an integral part of the union of the American 
Republics"; it expressed the hope that Argentina 
( might put herself in a position to conform to the 
prmciples and declarations of the conference of 
Mexico and to sign the United Nations documents ; 
and finally, it expressed the hope that Argentina 
might develop a policy of cooperative action with 
the other American nations and identify herself 
with the policy which those nations are following. 

Argentina's response was prompt. First, she 
declared war on Japan and Germany. Second, she 
declared her adherence to the principles and dec- 



larations of the Inter-American Conference on 
Problems of War and Peace. Third, she took 
steps to control German agents and interned 
Japanese diplomatic and consular officials. 
Fourth, she required registration of enemy aliens 
and restricted their activities. Fifth, she froze 
Axis funds, which might have accumulated over a 
period of years, thus preventing their use by Axis 
agents. 

As you know, only a few days ago the 20 Ameri- 
can republics which were represented at the Con- 
ference decided unanimously, after consultation, 
to resume noi-mal diplomatic relations with 
Argentina. 

Fifth, Joint Action in the Transition Period and 
for the Future Economic Develop-ment of the 
Americas: Gradually over a period of years the 
American nations have evolved a political struc- 
ture, which has taken form and grown stronger 
through experience and use. The test of its 
strength came with the outbreak of the war in 
Europe. The Foreign Ministers of the American 
nations met in Panama just after the Nazis in- 
vaded Poland and agreed on a common policy of 
neutrality. They met again in Habana when 
France fell and pledged the Americas to the policy 
that an attack against one would constitute an at- 
tack against all. Two years later, just after Pearl 
Harbor, they convened again at Rio de Janeiro, 
and there the political unity of the Americas pro- 
vided the basis for joint military and economic 
action. 

During these past years of war the Americas 
have made great strides in working out together, 
on a cooperative basis, the problems of the rapid 
production of strategic raw materials, the develop- 
ment and maintenance of transportation, and the 
distribution of essential goods and food supplies 
under the most difficult conditions. This coop- 
eration has made possible the unparalleled pro- 
duction of war materials, materials which have 
supplied the fighting men of the United Nations 
on the battle-fronts throughout the world. In 
addition, this cooperation has made it possible to 
maintain the necessary economic stability on the 
home front throughout the hemisphere. Thus, to 
the political structure of the hemisphere the Amer- 
icas have added, through the experience of these 
war years, the knowledge of how to work together, 
in dealing with economic and social problems. 

' Bulletin of Mar. 18, 1945, p. 450. 



696 

One of the major questions before us at Mexico 
City was whether this cooperation in meeting eco- 
nomic and social problems would continue after 
the war, whether we would be able to face and 
meet through joint action the difficulties of the 
transition period and the opportunities for eco- 
nomic development and a rising standard of living 
in the future. However, as the war reached its 
peak of fury, and although ultimate victory for 
the United Nations seemed assured, a new fear 
was gradually spreading through the Americas, 
the fear of economic collapse, unemployment, and 
hunger when hostilities cease and war production 
closes down. 

Many of the nations of the other Americas re- 
ceive a large part of their national income through 
the exportation of metals and materials vital to 
the production of manufactured goods in peace- 
time, and indispensable in the production of ma- 
terials and machines of war. These nations need 
to sell their exports in order to be able to import 
many of the necessities of life. Europe, one of 
their most important markets for export and im- 
port, was cut off when France fell in 1940. At 
that time, however, we began our heavy con- 
centration on the production of war material for 
the defense of the hemisphere, for our own armed 
forces and lend-lease. 

It is recognized by economists that if these na- 
tions, whose economies depend so largely on the 
export of these products, are left to themselves to 
solve the problems of the transition period from 
•war to peacetime trade, their economies might col- 
lapse, leaving large numbers of their people un- 
employed, and create political unrest, which would 
affect the economic, social, and political stability 
of all nations in this hemisphere. 

Therefore, of utmost importance were the plans 
agreed upon to continue the economic coopera- 
tion of the Americas in order to minimize the 
problems of the transition period. It was decided 
to protect these nations through this period by 
joint action along the following lines: First— na- 
tions supplying vital resources no longer needed 
for war, but on the export of which depends a 
large part of their national income, will through 
mutual consultation and bilateral agreements 
work out measures to maintain basic economic 
stability ; second — that all nations would cooperate 
in reestablishing normal commercial trade as 
quickly as possible; third — under the restrictions 
of war uncertainties, the United States would 



DEPARTMENT OF STATE BULLETIN 

give as much notice as possible of any large reduc- 
tion in purchases of these products, so that coun- 
tries providing them would have maximum time 
for readjustment ; fourth — it was agreed to elimi- 
nate economic discrimination so that all nations 
will enjoy access on equal terms to the sources of 
these materials. 

By the passage of this plan for the transition 
period the apprehension and fears of the people 
of the other Americas were greatly relieved. 

Sixth, Economic Charter of the Americas: 
The war has conclusively proven that the United 
States is no longer economically self-sufficient, and 
that we are increasingly dependent on the impor- 
tation from the other American republics of large 
amounts of raw materials essential not only for 
wartime military production but essential as well 
to maintain the great industries of this country, 
upon which our peacetime prosperity depends. 
Not only do we need to import from these markets, 
but after this war the United States is going to 
need foreign markets for export more than ever 
before in the history of our country. Our national 
income has gone from 85 billion dollars in 1938 to 
the annual rate of approximately 150 billion dol- 
lars at the present time. If we are to maintain a 
hiah rate of income after the war — a level of in- 
come which will provide the opportunity for 
jobs for war workers and the millions of men and 
women in the armed forces who have sacri- 
ficed everything for their country during these 
past years — we will have to look abroad for 
the opportunity to sell more of the production 
of our heavy industries, as well as the products 
of our manufacturing concerns. We can no longer 
think in terms of trying to gain a larger percentage 
of existing markets abroad; it would simply lead 
us into disastrous competition and economic con- 
flict with our Allies. We must think in positive 
terms of the rapid development and industrializa- 
tion of great areas of the world leading to expand- 
ing economies, rising standards of living, and tre- 
mendously increased buying power in the hands 
of all people, thus providing expanding marketsJ 
for the benefit of the people of all nations. No| 
countries of the world are in such a favorable posi- 
tion for such development as the other American 
republics with their great peoples and their vast 
natural resources. 

However, there has been a traditional fear of 
industrialization in other nations. It's fear of 
competition. Yet history has proven this fear 



APRIL 15, 1945 



697 



to be unfounded. A good example is seen in our 
relations with Canada, which, with a population 
of 10 million people, buys more from the United 
States every year than the 130 million people of the 
other 20 American republics put together. The 
reason for this is simple; industrialization has 
brought to Canada a high standard of living and 
great buying power. Industrialization and de- 
velopment leading to a rising standard of living 
throughout the Americas is not only to our self- 
interest but of primary importance to the other 
Americas. This was a subject which received 
major attention at the Conference in Mexico City. 

In order to facilitate the accomplishment of 
these common objectives, the Conference adopted 
the Economic Charter of the Americas. It con- 
stitutes a set of principles commonly agreed to as 
a basis for accomplishing these objectives. The 
Economic Charter declares its object to be collabo- 
ration in a program for the mobilization of eco- 
nomic resources. Its objectives are: Winning the 
war ; raising standards of living ; reduction of bar- 
riers detrimental to trade between nations; pre- 
vention of cartels or similar arrangements; elimi- 
nation of excesses of economic nationalism; equi- 
table treatment for foreign enterprise and capital ; 
establishmentof the International Monetary Fund, 
the International Bank for Keconstruction and 
Development, and the Food and Agriculture Or- 
ganization of the United Nations; promotion of 
the system of private enterprise; international co- 
operation to reduce in an orderly fashion any 
burdensome surpluses that develop; and improve- 
ment of labor standards and working conditions, 
including collective bargaining. 

To forward these ends, there has been growing 
cooperation among business, labor, agricultural, 
and financial leaders throughout the Americas, and 
increased exchange between scientific and educa- 
tional organizations, as well as military coopera- 
tion in the prosecution of the war. 

All these problems and our success in their solu- 
tion affect the future of every country in the Amer- 
ican hemisphere and in the world. It is vital, if 
we are to build a firm foundation under our world 
Organization for peace and security, that we work 
toward the realization of expanding economies, 
expanding world trade, increased earnings for the 
people, better standards of living, opportunities 
for education, programs for health, sanitation, 
and proper food, all of wbicli will carry forward 
the development of self-government in the spirit 



of true democracy. Let's adhere to the principle 
of self-interest, let's remember our duty to our 
own people to provide the opportunity for jobs 
for those who are working in war plants and for 
the men and women who will be returning from 
the armed forces. When we consider all matters, 
political, economic, financial, and commercial, in 
the light of self-interest, we find that they are 
closely and eternally allied to the best interests of 
the peoples of the other nations of the world. We 
cannot maintain an economy calling for a high 
rate of national income by ourselves alone. This 
means we alone cannot provide by our own efforts 
the opportunity for jobs for all those who deserve 
them. No nation today, large or small, can solve 
all its problems alone. Yet united we face the 
possibility of an era of great productivity, pros- 
perity, welfare, and peace if we work together. 
That is the purpose of civilization. 

That was also the purpose of the Inter-Ameri- 
can Conference on Problems of War and Peace : to 
promote security and peace through the Act of 
Chapultepec and the Declaration of a World Or- 
ganization; to strengthen the unity of the Ameri- 
cas through strengthening the inter-American 
system and the message to Argentina; to protect 
the peoples of the Americas from the dangers and 
privations of the transition period; and to offer 
new opportunities and a new and better life 
through the Economic Charter of the Ajnericas. 
By so ordering our own lives in the Western 
Hemisphere we are contributing to the security, 
the peace, and the better living of all the peoples of 
the world. 



Inquiries on American 
Citizens in Rumania 

[Released to the press April 10] 

The Department of State announces that the 
American Mission at Bucharest now is prepared 
to receive inquiries regarding the welfare and 
whereabouts of American citizens believed to be 
residing in Rumania. All such inquiries should 
be addressed to the Department. 

For the time being this service is restricted to 
inquiries which concern American citizens only. 
Inquiries submitted in behalf of aliens or persons 
who are not believed to be in Rumania will not 
be accepted. 



698 



DEPARTMENT OF STATE BULLETIN 



Questions Concerning the Problems of 
American Small Business 

Statement by ASSISTANT SECRETARY CLAYTON* 



[Released to the press April 10) 

Mr. CHAiRiiAN, Members of tue Comjiittee: 
In letters under date of March 27 and March 29, 
1945, your chairman has addressed to me certain 
questions concerning the circumstances surround- 
ing the agreement made by the Metals Reserve 
Company with the Aluminum Company of Can- 
ada for purchasing aluminum ingot. I am pleased 
to appear before the committee and to make avail- 
able to you such information as I may have. I 
should like to present the information desired in 
the form of specific answers to the questions of 
your chairman. It is probable that other ques- 
tions will arise as these answers are being con- 
sidered. If I can, I shall be glad to answer them. 
If I do not have the information, I shall under- 
take to obtain it as promptly as possible. 

1. How and loith whom did the idea of the Ca- 
nadian agreement originate f 

The idea of an agreement to purchase Canadian 
aluminum originated with the officials of the Of- 
fice of Production Management in consequence of 
the shortage of aluminum production capacity and 
expanding defense requirements in the spring of 
1941. At the request of the Office of Production 
Management, I, as Deputy Federal Loan Admin- 
istrator acting on behalf of the Metals Reserve 
Company, began negotiations on April 25, 1941 
with the Aluminum Company of Canada, Ltd. 

2. Who were the persons who conducted the ne- 
gotiations? 

The negotiations for the purchase of Canadian 
aluminum were conducted on behalf of the Alumi- 
num Company of Canada by Mr. Edward K. 
Davis, President of Aluminum, Limited (the 
parent company), Mr. R. E. Powell, President 
of the Aluminum Company of Canada, and Mr. 
E. G. MacDowell, a director of Aluminum Lim- 
ited. For the Government the negotiations were 
carried on by the Honorable Jesse H. Jones, the 



'Delivered before the Senate Special Committee To 
Study Problems of American Small Business, Apr. 10, 
1945. 



Federal Loan Administrator, by me as Deputy 
Federal Loan Administrator, and by Mr. Simon 
D. Strauss, then my assistant. The original con- 
tracts were drafted by Mr. Edgar P. Baker of 
the New York law firm, Milbank, Tweed and Hope, 
counsel for the Aluminum Company of Canada, 
and Mr. Robert G. Wilson, then counsel for Metals 
Reserve Company. 

3. Why was the arrangement made with Canada 
before any government study or -program' was in- 
augurated to enlarge United States producing 
capacity? 

The arrangement with Canada was not made 
prior to a Government study to enlarge the United 
States producing capacity. Prior to the outbreak 
of the European war, the domestic capacity to 
produce aluminum was approximately 400,000,000 
pounds a year. During 1940 the Aluminum Com- 
pany of America and the Reynolds Metals Com- 
pany had taken steps to increase capacity to a 
maximum of 800,000,000 pounds a year by the end 
of 1941. Simultaneously with the negotiation in 
1941 of arrangements with Canada for aluminum 
at a rate of 200,000,000 pounds per year plans were 
made by the Office of Production Management for 
an increase in domestic capacity of 600,000,000 
pounds per year. 

i. What part, if any, did officials or representa- 
tives of the Aluminmn Company of America have 
in suggesting the making of a deal with the Cana- 
dian company? 

The records of the Federal Loan Agency and 
the Metals Reserve Company do not show that 
the Aluminum Company of America had any part 
in the suggestion of a contract for Canadian alum- 
inum. The only suggestion for the Canadian pro- 
gram received by the Federal Loan Agency came 
from the Office of Production Management. Of- 
ficials of that agency may be able to answer 
Senator Murray's question in more detail. 

6. Was preference given to installation of hy- 



APRIL 15. 1945 



699 



droelectric-power facilities in Canada, instead of 
in the United States? 

The Federal Loan Agency and Metals Reserve 
Company had no part in the arrangement for 
installing hydroelectric-power facilities to pro- 
duce aluminmn in Canada. 

6. Why did the United States Government lend 
money, without security, at S percent interest, to 
the Canadian company, make advance payments 
on aluminum, and pay, in addition to the hose price 
of aluminum, a premium of several cents a pourul 
to cover increased lahor and raw-material-trans- 
portation expenses, and later require a competing 
company in the United States, the Reynolds Metal 
Company, to give security for the loans made to 
it, pay a 4 percent rate of interest, and sell the 
aluminum at the base price without any premium 
for increased raw-material and lahor costs? 

At the time the recommendation was made the 
entire available capacity in Canada was engaged 
in filling existing orders placed by the British Gov- 
ernment, and the building of new facilities in 
Canada was therefore required to comply with the 
request of the Office of Production Management, 
the predecessor of the War Production Board. It 
was necessary to deal directly with the Aluminum 
Company of Canada, which was the only agency 
in a position to build the facilities and deliver 
aluminum promptly. In our negotiations with 
the Aluminum Company of Canada we made the 
best deal we could. 

The position which the company took in the 
negotiations was that its facilities prior to the 
war had been adequate for the production of a 
maximum of 100,000,000 pounds of aluminum an- 
nually ; that it had already expanded that capacity 
to 500,000,000 pounds annually; and that, while 
anxious to assist in the war effort, it would have 
no post-war interest in a still greater capacity than 
500,000,000 pounds. Therefore, the company felt 
that any facilities which might be added for the 
purpose of meeting war demand would have to 
be paid for out of the proceeds of the aluminum 
sold. Further, the company indicated that it was 
not in a position fully to finance the additional 
capacity required. 

The negotiations were necessarily conducted un- 
der the pressure of war requirements. Tliere was 
give and take on both sides. The result of the 
negotiations was that the Metals Eeserve Com- 
pany made advance payments for aluminum of 



$68,500,000. The escalator clause, which was in- 
cluded, was the only basis on which the company 
v.'as willing to negotiate because of the uncertainty 
involved in bringing bauxite from abroad. 

The committee's letter refers to a "premium" of 
several cents a pound. It is true that the opera- 
tion of the escalator clause has resulted in pay- 
ment of an average of slightly over 3 cents a pound 
in excess of the base price. However, had costs 
of producing aluminum in Canada been reduced 
rather than increased (by virtue of the termina- 
tion of the war or other reasons), it is only fair 
to point out that the price at which the aluminum 
would then have been delivered would likewise 
have been reduced. 

The committee asks why a competing company 
in the United States was later required to give 
security for the loans made to it, to pay a 4-per- 
cent rate of interest, and to sell aluminimi at the 
base price. I would prefer that someone else be 
asked to testify on this question since my responsi- 
bility was in the foreign field and I had very little 
to do with the an-angements concluded with the 
Reynolds Metals Company. 

Reynolds did have protection against increased 
raw-materials costs in that it purchased imported 
bauxite from the Metals Reserve Company at a 
price substantially below the market. To that ex- 
tent Reynolds was protected against increased raw- 
materials costs sustained by the Aluminum Com- 
pany of Canada. 

7. Were the revised contracts of March and 
April 19Jt2, agreeing upon a reduction in the base 
price from 17 cents to 15 cents per pound, prompted 
by the hearings before the Truvfian committee in 
WJfl, which pointed out that the United States base 
price had been reduced to lo cents per pound, or did 
the United States Government agencies take this 
matter up with the Canadian company and obtain 
the price reduction without any suggestion from 
the Truman committee, or did the Canadian com- 
pany voluntarily reduce the price, without pressure 
from the United States? Why was interest on the 
advance payments xoaived at the time the price re- 
duction was made? 

The question of a reduction in the base price of 
aluminum was taken up by Metals Reserve Com- 
pany with the Aluminum Company of Canada in 
late 1941 following the reduction in the domestic 
base price. This action was not prompted by the 
hearings before the Truman committee nor was 



700 



DEPARTMENT OF STATE BULLETIN 



it a voluntary action on the part of the Canadian 
company. Tlie Canadian company resisted the 
reduction for tlie reason that it liad commitments 
with the British Government at the higher price 
and felt that it could not properly chai-ge less for 
aluminum sold to us than that sold to the British 
Government. As a result of the reduction in price 
which Metals Reserve Company negotiated, it is 
understood that a similar reduction was subse- 
quently made in the price charged the British. 

The committee wishes to know why interest on 
the advance payment was waived at the time that 
the price reduction was made in early 1942. The 
reduction in price of 2 cents a pound on 80 per- 
cent of the 740,000,000 pounds of aluminum under 
the first two contracts represented a saving of 
$11,840,000. As against this the interest on the 
previously existing loans and advances, then 
amounting to $50,000,000, represented a maximum 
of $1,250,000 a year or less than $3,000,000 over 
the life of the contract. The Canadian company 
indicated it would agree to the lower price only 
if the interest charges were waived. In dollars 
and cents, this seemed an advantageous trade to 
us at the time, and it was made. 

8. At ivhat time and at whose instance was the 
payment of interest on advance payments restored? 

In October 1943, agreement was reached as to 
the restoration of intei'est payments on the ad- 
vance at the rate of 3 percent per annum for the 
entire period during which the advances were 
outstanding. The request for the restoration of 
interest payments was made by Metals Reserve 
Company through the Secretary of Commerce. It 
was felt then tliat the deliveries under the con- 
tract had sufficiently progressed so that many of 
the risk elements which had been present when the 
contracts were first negotiated were no longer 
present. Consequently, the company was in a po- 
sition to absorb a reduction in profits through 
these interest payments. 

9. ^Yho was responsible for giving priorities to 
the Canadian company in installation of turbines, 
shaftings, or other electric-power facilities in Can- 
ada, in preference to such installations in the 
Grand Coulee Dam or other hydroelectric poicer 
sites in the United States? 

The War Production Board was responsible for 
priorities with respect to equipment required for 
power facilities. This question should be an- 



swered by the officials of the War Production 
Board. 

JO. Was the United States Government advised 
of the loans, tax excrnptions, accelerated deprecia- 
tion, or other aid granted by the Canadian, Biitish, 
or Australian Government to the Canadian com- 
pany? Can you give the details of those aids? 

At the time of the original negotiation of the 
contracts in 1941, the Aluminum Company of 
Canada informed Metals Reserve Company of the 
existing arrangements with the United Kingdom 
Government under which the Aluminum Com- 
pany of Canada had obtained loans totalling ap- 
proximately $55,000,000 on 20-year notes at 3-per- 
cent interest. We were further informed that tliese 
loans contained provision that the principal 
amounts payable on the loans were payable only 
to the extent that the capacity of the new plant 
was utilized. For example, in the event the new 
plant operated at 50 percent of capacity, 50 percent 
of the principal payments due in tliat year would 
be payable and the balance would be forgiven. 
During the negotiations, Metals Reserve was in- 
formed only in a general way as to the tax exemp- 
tions or accelerated depreciation granted the com- 
pany by the Canadian Government. However, 
full details with respect to such tax exemptions and 
accelerated depreciation are available in the report 
of the Special Committee on War Expenditures 
of the Canadian House of Commons published 
under the date of January 26, 1944. In general, 
it may be said that these arrangements are similar 
to the accelerated depreciation arrangements made 
by the Treasury Department under so-called cer- 
tificates of necessity for privately owned facilities 
required in the war effort in the United States. 

11. Was it realized by the United States Gov- 
ernment agencies that the result of the arrange- 
ments entered into ^oith the Canadian company 
would be to establish in Canada a tremendous 
aluminum production, with costs lower than those 
of United States producers? 

It was, of course, realized by the United States 
Government agencies, including the Metals Re- 
serve Company, that the arrangements with the 
Aluminum Company of Canada had the effect of 
establishing a very large additional capacity for 
the production of aluminum in Canada. As to the 
costs of producing aluminum in Canada, it was 

(Continued on page 714) 



APRIL 15, 194S 



fot 



International Aviation Problems 

Address by STOKELEY W. MORGAN > 



[Released to the press April 11] 

HPhe International Civil Aviation Confer- 
■'■ ENCE which met at Chicago hist fall was called 
primarily for the purpose of working out arrange- 
ments which would permit international airlines 
to inaugurate operations as soon as the military 
situation will permit, thus enabling commercial 
air transport to perform with the least possible 
delay its proper function of assuring rapid com- 
munication between nations and peoples and re- 
newing world trade and commerce after the period 
of stagnation due to the war.' 

The situation which will confront the air-trans- 
port industry after the war will be totally different 
from that which existed before the war, and the 
international machinery which served then will 
be wholly inadequate to meet these new conditions. 
There is a universally recognized need for a new 
international convention covering air navigation 
and air transport to replace the outmoded Paris 
convention of 1919 and Habana convention of 
1928. There is need for a new set of technical 
standards to reflect the great strides which have 
been made in aviation practice and technique dui"- 
ing the war years; and, in order that these im- 
provements may be put into effect with the least 
possible delay, the need was recognized for some 
form of provisional interim arrangements to serve 
until more permanent arrangements and new 
standards could be worked out and adopted by all 
the nations. The Conference was seeking a means 
to enable aircraft to start flying the minute the 
green light replaces the red on the commercial 
airways of the world. 

During the Conference a small group of nations, 
led by Canada and Great Britain, favored the 
establishment of a sort of international civil aero- 
nautics authority which would have complete con- 
trol over the allocation of routes throughout the 
world, frequencies operated, types of aircraft used, 
and rates charged by the operators. Their desire 
for such control was based in large part on a fear 



'Delivered before the National Association of Jlanii- 
facturers. Committee on Aviation and Communications, in 
New Yorl<, X. Y., on Apr. 11, 1045. 

' Bulletin of Nov. 5, 1044, p. 529. For article on the 
Conference, see Bulletin of Dec. 31, 1944, p. 843. 



that without it international services would be put 
into operation greatly in excess of the actual traffic 
demands, and that such services, motivated in large 
part by nationalistic considerations, would inevit- 
ably seek support from their Governments with 
resulting subsidy races and rate wars. Although 
not stressed in the open discussions there, it was 
quite evident that their thinking was based to a 
great extent on the fear lest, without some form 
of international control, the United States, 
through its undisputed leadership in air transport 
and with its present advantage in the possession of 
long-range transport planes, might monopolize the 
world air transport of the immediate future, with 
the result that other nations wjien ready and able 
to enter the competitive race would find the field 
preempted. 

The United States Delegation opposed the estab- 
lishment of any international authority with arbi- 
trary regulatory powers. It felt that the forma- 
tion of such a body at this time would be prema- 
ture since it must work largely without experience, 
in a new field under unforeseeable conditions. 
The United States Delegation felt, however, that 
an international civil aviation council acting as a 
purely technical and advisory group would be a 
valuable instrument for solving many of the prob- 
lems which will confront international aviation in 
the post-war era. In this position the United 
States was supported by a majority of the coun- 
tries represented at Chicago. 

The International Civil Aviation Convention, 
drawn up at Chicago and signed by 38 nations, 
covers the air transport, air navigation, and tech- 
nical phases of aviation and establishes a basis 
for common air practice throughout the world.^ 

The Convention also provides for the establish- 
ment of an International Civil Aviation Organi- 
zation comprising both a Council and an Assem- 
bly, with representation in the Assembly of all the 
contracting states, while the Council is composed 
of 21 states elected on the basis of their importance 
in international air transport, their contribution 



' Fur articie on comparison of tlie Chicago aviation con- 
vention witli the I'aris and Habana conventions see Bulle- 
tin of Mar. 11, 1945, p. 411. 



702 



DEPARTMENT OF STATE BULLETIN 



of air-navigation facilities, or because of geo- 
graphical position. It is worthwhile to note the 
objectives of the new organization. They are : 

1. To insure the safe and orderly growth of in- 
ternational civil aviation throughout the world 

2. To encourage the arts of aircraft design and 
operation for peaceful purposes 

3. To encourage the development of airways, 
airports, and air-navigation facilities for interna- 
tional civil aviation 

4. To meet the needs of the peoples of the world 
for safe, regular, efiicient, and economic air 
transport 

5. To prevent economic waste caused by un- 
reasonable coniiJetition 

G. To insure that the rights of contracting states 
are fully respected and that every contracting state 
has a fair opportunity to operate international 
airlines 

7. To avoid discrimination between contracting 
states 

8. To promote safety of flight in international 
air navigation 

9. To promote generally the development of 
all aspects of international civil aeronautics 

In the technical field 12 subcommittees of the 
Conference produced draft technical annexes to 
the international convention, which were accepted 
by the Conference for further study by the Interim 
Council. The completeness with which the field 
was covered is shown by the titles of these an- 
nexes, viz : 

1. Airways Systems 

2. Communications Procedures and Systems 

3. Rules of the Air 

4. Air Traffic Control Practices 

5. Standards Governing the Licensing of Op- 
erating and Mechanical Personnel 

6. Log Book Requirements 

7. Airworthiness Requirements for Civil Air- 
craft Engaging in International Air Navigation 

8. Aircraft Registration and Identification 
Marks 

9. Meterological Protection of International 
Aeronautics 

10. Aeronautical Map.s and Charts 

11. Customs Procedures and Manifests 

12. Search and Rescue, and Investigation of Ac- 
cidents 

It should be noted that the technical annexes, 
even when formally adopted by the organization 



and made a part of the proposed new convention, 
will not be absolutely binding upon the member 
states. They are to be recommended practices, but, 
if for reasons of its own any state feels that it 
must deviate in some particular from these stand- 
ards, it is permitted to do so, although in such 
case it must notify the Council of the manner in 
which its standards deviate from the recommended 
standard practices. However, it is hoped and ex- 
pected that the nations of the world will volun- 
tarily adopt these technical standards and prac- 
tices as their own laws and regulations. Thus 
we may very shortly achieve the desirable end 
that aircraft flying in all parts of the world will 
comply with the same standards, follow the same 
procedures, give and recognize the same signals 
everywhere. 

The proposed Convention on International Civil 
Aviation is now before the Senate of the United 
States for advice and consent as to its ratification 
by this Government. 

However, it was not the most difficult problem 
of the Conference to agree upon the principles 
of air navigation and technical matters. As Mayor 
LaGuardia said on one occasion, "Everybody is 
against bad weather". The problem of getting 
the transport planes into the air and providing 
for air commerce between the nations was not 
solved by the Convention. This problem had been 
side-stepped by both the Paris and Habana con- 
ventions, which specified that matters relating to 
international air transport should be arranged 
between the nations by direct agreement. The 
result had been thoroughly unsatisfactory. Every 
air-transport line necessitated a series of bargains, 
one with each nation through which it passed. 
Thus a nation holding a strategic position on the 
route was in a position to exercise hold-up tactics; 
and in many cases this was done. Special deals 
were worked out under which certain nations were 
favored at the expense of others. 

The United States Delegation at Chicago pro- 
pounded the doctrine that aircraft should be per- 
mitted to go wherever there was a legitimate traf- 
fic need, providing only that they should fly rea- 
sonably full and that air lines should be free to fly 
such types of aircraft and such frequencies as 
sound business judgment might dictate and that 
there should be no discriminatory practices favor- 
ing the aircraft of one nation operating in a given 
country over the aircraft of any other nation. 
Canada was responsible for suggesting what 



APRIL 15, 1945 



703 



came to be known as the doctrine of the "free- 
doms". This provided that each nation should 
grant to the others the following limited free- 
doms of the air with respect to scheduled interna- 
tional air services: 

"(1) The privilege to fly across its territory 
without landing; 

"(2) The privilege to land for non-traffic pur- 
poses ; 

"(3) The privilege to put down passengers, 
mail and cargo taken on in the territory of the 
State whose nationality the aircraft possesses; 

"(4) The privilege to take on passengers, mail 
and cargo destined for the territory of the State 
whose nationality the aircraft possesses." 

This, as can readily be seen, contains one seri- 
ous omission. It makes no provision for interme- 
diate, so-called "pick-up" traffic. An airline oper- 
ating a long route under this Canadian formula 
would fly with a constantly growing number of 
empty seats. For example, a plane from New York 
to Cairo, via London, Paris, Geneva, and Rome 
would drop off at each city the passengers booked 
to that point, and take on none, thus probably 
arriving at Cairo with perhaps only two or three 
seats occupied. Between New York and Buenos 
Aires, for instance, only 15 percent of the traffic 
is "through traffic", and we should be able to oper- 
ate only about one plane a week on that trade 
route. Such a restriction would strangle the trunk 
lines of every country except those operated for 
political reasons with heavy government sub- 
sidies. 

However, this doctrine was favored by certain 
nations who felt that if American planes were 
permitted to pick up traffic as they went along 
over extensive world routes the local airlines would 
find it impossible to compete with through lines 
which would take all the traffic. The United 
States viewpoint, supported with equal vigor by 
a number of other nations, was that in the post- 
war world there would be plenty of room for 
all and that local traffic, including that between 
neighboring nations, would for the most part 
logically travel on the local airlines and would 
not seek accommodations on the trunk lines. How- 
ever, through lines could not possibly operate and 
develop on terminal traffic alone, as provided un- 
der the Canadian formula. In effect, if adopted, 
the formula of the four freedoms would probably 



have stopped American operations at the western 
gateway of Europe. 

Therefore, the United States Delegation pro- 
posed what came to be designated as the "fifth 
freedom", namely : 

"(5) The privilege to take on passengers, mail 
and cargo destined for the territory of any other 
contracting State and the privilege to put down 
passengers, mail and cargo coming from any such 
territory." 

It should be noted that this freedom was not, 
as has been alleged, a new doctrine. It was, in 
fact, only the preservation of the system upon 
which air routes had been set up and had operated 
all over the world. No question had ever been 
raised of the right of an airline, once an operating 
concession had been granted, to pick up and set 
down traffic to and from all points on the line. 
It was the Canadians who propounded the new 
doctrine in trying to limit the traffic carried to 
that described under the third and fourth free- 
doms. It should be noted that the proposed grant 
of freedoms three, four, and five is to apply only 
to through services on a reasonably direct route 
out from and back to the homeland of the state 
whose nationality the aircraft possesses. The 
granting of these freedoms does not in any way 
impair the state's exclusive sovereignty and com- 
plete control over the airspace above its territory. 
Furthermore, each nation retains the right to re- 
serve for its own carriers traffic wholly between 
points within its own territory, so-called "cabo- 
tage". 

In the end, since unanimity could not be achieved 
with respect to agreement on the so-called "free- 
doms", it was decided that they should be provided 
for in agreements separate from the aviation con- 
vention, which agreements could be signed by such 
nations as were willing to grant and receive some 
or all of these freedoms. A good many nations, 
it appears, are willing to grant the two freedoms 
which provide for freedom of transit and tech- 
nical stop but have still not made up their minds 
with respect to their willingness to grant com- 
mercial rights on a multilateral basis. Others are 
willing to grant the third and fourth freedoms, 
which provide for carrying traffic between ter- 
minals, but are still doubtful about the effect of 
granting the fifth freedom, namely, the right to 
pick up and put down traffic to and from all points. 
However, the granting of the two freedoms by the 



70i 

30 nations which have already signed that docu- 
ment would be in itself a great achievement. It 
would get the planes into the air at once, not after 
prolonged bilateral negotiations and bargaining 
with each nation separately. It would permit 
American commercial aircraft to fly to virtually 
all parts of the world as soon as they are ready 
to do so. 

Some people may say that the United States 
gives up more than it receives by such a grant. 
I do not think so. Under the system of bilateral 
agreements you may obtain commercial rights to 
operate and do business in a certain country and be 
wholly unable to get there. You must at least have 
transit riglits in all the intervening countries. It 
does us no good to have commercial rights in mid- 
continental Europe and the Near and Middle East 
if we cannot cross the Atlantic and go through the 
intervening countries; and to cross the Atlantic 
on a practicable route we must have transit rights 
granted by Canada, Newfoundland, and, if pos- 
sible, Iceland, Bermuda, and the Azores. In the 
present development of transport aircraft it is im- 
possible to fly economically from the United States 
to European territory nonstop. As a result of the 
agreement prepared at Chicago, we are now rea- 
sonably sure of obtaining these transit rights. 

But what good are these transit rights if com- 
mercial rights do not go with them? They would 
be no good at all if we had no commercial rights 
anywhere. Their value depends on their use to 
us in getting to countries with which we exchange 
commercial rights. It is true that only 19 nations 
have signed the live-freedoms document, and most 
of these are Latin American nations to and 
through which we are already operating air-trans- 
port services, but that will not be the final score. 
For some time it will still be necessary to conclude 
special agreements with the countries which, while 
not ready to extend these commercial freedoms 
on a multilateral basis, are yet ready and willing 
to welcome United States air carriers into their 
territory. In each case where a new nation is 
added to our list of customers, the right of access 
to that nation will exist based on the general grant 
of the first two freedoms. At the same time, in 
the case of those nations, and it is hoped there will 
be many, which are willing to grant these freedoms 
on a multilateral basis, the necessity for special 
agreements is eliminated, which makes for simpli- 
fication of procedure and a clearer and more uni- 
form world pattern. 



DEPARTMENT OF STATE BULLETIN 

The United States has shown the way towards a 
sound, reasonable but not excessive freedom of the 
air. I realize that in some quarters fear has been 
expressed lest the willingness of the United States 
to grant commercial rights on a multilateral basis 
may lead to the entry of airlines from 54 different 
nations into this country, tapping our traffic and, 
if the worst forebodings are realized, putting 
American international aviation practically out of 
business. We do not feel that these fears are 
justified. It is unlikely that very many of the 54 
nations involved will actually seek to operate air- 
lines under the freedoms agreements providing for 
a direct route from the homeland out and back 
between those countries and the United States; 
and if more airlines than are expected do seek to 
enter this field, we feel that the American opera- 
tors will be well able to maintain themselves in 
the face of that competition and obtain their fair 
share of the traffic. 

But those who profess alarm over the possible 
results of permitting this much freedom of the 
air are overlooking the fact that if the United 
States wishes to operate, as it does, to practically 
all countries in the world, it must be prepared to 
grant reciprocal rights to the carriers of the other 
nations. It is true that before the war American 
flag carriers operated a network through the West- 
ern Hemisphere without the carriers of those na- 
tions operating reciprocal services to this country, 
but that was simply because they were not ready 
or desirous of instituting such operations. Those 
were the pioneering days when potential competi- 
tors were willing to wait and see how things would 
turn out and were not in any hurry to rush in. 
Those days are passed. In fact, as soon as the 
United States carriers were ready to fly the Atlan- 
tic early in 1939, reciprocal rights were demanded 
by the United Kingdom and France, and such 
rights were granted. Even in those days no nation 
which had permitted an American carrier to op- 
erate in its territory would admit that it was not 
entitled to reciprocal rights as soon as its carriers 
were ready to take advantage of them. 

The theory that by some form of shrewd bar- 
gaining we can obtain rights of commercial entry 
for our carriers while denying them to the nations 
which grant them to us is unrealistic in the ex- 
treme. Nor would it be in our best interests nor 
in the interests of the world in which we live to 
have such principles prevail. 

Freedom of transit, freedom of commercial in- 



APRIL 15, 1945 



705 



tercourse, unrestricted voyaging in furtherance of 
legitimate interests are fundamental American 
principles. Now what is the effect if we adopt a 
more restricted policy? In the first place, there 
is no possibility of our having a monopoly of world 
air transport. Nobody can deny that we must 
grant reciprocal rights to the large nations com- 
parable in size and importance to our own, who 
will expect and insist upon the right to share the 
air commerce of the world. Now, where would we 
draw the line? Are we going to refuse rights to 
the somewhat smaller nations — I must refrain 
from mentioning names because that leads so often 
to misinterpretation or misunderstanding, but you 
will know perfectly well to what nations I refer — 
those somewhat smaller nations which also have a 
keen desire to participate in air commerce and 
have a perfect right to achieve that ambition? 
Shall we say to them, "No, we will come to your 
country, but you will not come to ours because we 
feel that you will take some of our traffic" ? I feel 
sure that we would not only fail in many cases to 
obtain the rights we seek for ourselves, but we 
would probably provoke retaliation and blocs 
organized against us which would seriously ham- 
per the development of our own international 
services. 

Then again if we grant rights to all the nations 
in these first two categories, where do we draw 
the line? Are we going to exclude from our air 
small nations simply because they are not in a 
position to assert themselves vigorously? I am 
sure that would not be a sound approach to a better 
understanding and world economy. Most of the 
small nations will not wish to enter the expensive 
and difficult field of international commercial avi- 
ation. It is true that in some of these countries 
groups will be established using foreign capital, 
American or other, to operate under the flags of 
these nations and their reciprocal rights to Amer- 
ican territory; but that danger would be equally 
real under the principle of bilateral bargaining 
unless we stipulated in every case that the airline 
exercising this reciprocal right must be owned and 
controlled by nationals of one of the two countries 
parties to the agreement. It would hardly seem 
just in such case to say to a very small country 
that, while we demand the right to operate into 
its territory, it cannot operate an airline into ours 
unless it is owned and controlled by nationals 
of that small country, a condition which would 
probably preclude such an operation ever taking 



place. This would be looked upon simply as a 
subterfuge by the United States to deprive that 
nation of the possibility of exercising its reciprocal 
rights of participating in air commerce. Through 
such a course we would simply breed enmity and 
create a lot of sore spots throughout the world 
in an endeavor to protect ourselves from what may 
be a purely imaginative danger. 

It seems to me that the advantages we gain by 
a more liberal attitude far outweigh the compara- 
tively smaller risks which we run. The idea that 
American aviation must be protected against for- 
eign competition by closing the doors to foreign 
operators while forcing them open to our own will 
have, I am confident, little support among the 
people of this country. 

Now a word or two about the so-called "single 
instrument" doctrine or all- American flag com- 
pany, which has been mentioned here today. The 
Department of State, as well as the War and Navy 
Departments, the Department of Conamerce, and 
the Civil Aeronautics Board, have all formally 
gone on record as opposed to this bill, as opposed 
to monopoly in the international air-transport 
field and in favor of regulated competition be- 
tween American operators. 

The statement has been made that we shall be 
faced with a group of so-called "chosen instru- 
ments", the arms of foreign governments, and that 
unless we ourselves adopt this policy we shall be 
helpless in the face of foreign competition. For 
a number of reasons, we do not believe this to be 
the case. 

First, let us dispose of the theory that all the 
foreign nations adopted or are going to adopt 
the single-instrument policy. The fact is that the 
United Kingdom and France, the two largest na- 
tions outside of Germany (no longer a factor) 
which operated internationally in the pre-war era, 
experimented with several airlines and with one 
airline, with competition and with a so-called 
"zoning system", and never reached any final de- 
cision as to which was the most desirable. In the 
Wliite Paper submitted on March 13, 1945 to Par- 
liament, the British Government has definitely 
adopted a plan of having three large airlines in 
the field: First, British Overseas Airways Corpo- 
ration to operate the so-called "Empire routes" 
connecting the various countries of the British 
Commonwealth and the trans- Atlantic services to 
the United States ; second, another group made up 
of the British railways and short-sea shippers with 



706 



DEPARTMENT OF STATE BULLETIN 



a minority i:)articipation by BOAC to operate the 
routes between the British Isles and Europe; and 
third, a group made up of steamship lines with a 
somewhat smaller participation by BOAC to 
operate a line from the United Kingdom to South 
America. 

It is true that there will presumably be no direct 
competition between these three groups, all of 
which will be under Government control with Gov- 
ernment directors on the boards; and BOAC 
is, of course, completely government-owned and 
controlled. 

In submitting this report to the House of Com- 
mons, Sir Stafford Cripps, speaker for the Govern- 
ment, definitely disposed of the single instrument 
as British policy in the following statement : "In 
the view of the Government, a single corporation 
could not economically and efficiently carry out the 
entire task that lies before British civil aviation. 
To suggest that such a thing was possible would 
be to underestimate greatly the possibilities of the 
future of British aviation. There is too, I believe, 
a further benefit in having several instruments, 
as this multiplicity provides an opportunity for 
testing our different transport techniques and air- 
craft and thus avoids the danger of a too rigid 
uniformity of idea, which may well detract from 
the value of a single chosen instrument. We have, 
therefore, elected for three chosen instruments 
to begin with, each one constituted in the way that 
seems most likely to mobilize the maximum range 
of experience and knowledge for the carrying out 
of its particular job. As the tasks vary greatly, 
so the constitution of the three corporations wliich 
have been chosen will also vary." 

It is worthy of note that all the nations which 
adopted the single-instrument policy or a policy 
of having several instruments operating in dif- 
ferent zones without direct competition between 
them fell into three distinct categories: (1) those 
which had adopted a totalitarian form of govern- 
ment, which naturally and inevitably lends itself 
to the operation of a chosen instrument; (2) na- 
tions whose primary concern was the connection 
of wide-spread colonial possessions with the 
mother country; and (3) small nations whose fi- 
nancial resources did not in any case permit them 
to support more than one enterprise. The United 
States obviously does not fit into any of these 
groups. In the case of the first and third, this fact 
is obvious. With respect to the second, I will point 
out that our primary objective is not to connect 



the American homeland with American terri- 
torial possessions abroad, but to carry American 
passengers and American products under our own 
flag to all parts of the world. 

Moreover, and this I believe should be given 
closest attention, in practically every instance 
where there has been a single-instrument company 
it has been either government-owned or so much 
government-controlled as to have all the qualities 
of government ownership; this is true with the 
minor exceptions of Switzerland, Norway, and 
Denmark. The conclusion seems to be inevitable, 
therefoi'e, that any airline assured of a monopoly 
of international air transport under the Ameri- 
can flag would sooner or later conform to the 
government-ownership pattern. W^e can retain 
the benefits of our characteristically American 
methods and deal effectively with other countries, 
without adopting their patterns of economic life. 

Furthermore, a single company carrying all the 
American foreign air commerce to all parts of the 
world must inevitably become a tremendously 
powerful factor in foreign relations. It would 
be very difficult for the Government to control the 
political activities of such a companj' as long as it 
was privately owned; it would be in a position 
to make its own arrangements with foreign com- 
panies and with foreign governments, which in 
many cases might not be in the interests of the 
United States as a whole or in the best interests 
of the American traveling public. It is possible 
that it would achieve such power and wield so 
much influence that instead of the Government's 
regulating the company the company might well 
be found to be regulating the Government. The 
result would in the end be that the Government 
would have to take over the all-American flag 
airline. We do not think that the American 
people want Government ownership of the airlines 
any more than they want Government ownership 
of other forms of transportation. 

Proponents of the single-instrument plan have 
based their case in part upon the assumption that 
there will be a limited amount of traffic to be car- 
ried on the world airways, with special reference 
to the trans-Atlantic route, and it would be uneco- 
nomic to divide the anticipated American share of 
such traffic between two or more companies. We 
believe that any attempt to forecast at this time 
the probable size of this post-war m^arket is of 
little value. Everything points to the fact that 
there will be a tremendous increase when facili- 



APRIL 15, 1945 



707 



ties are available for people to travel rapidly and 
at reasonably cheap rates to all parts of the ■world. 
We have only to look back upon the ridiculously 
low forecasts which were made some 20 years ago 
of the potential market for automobiles in this 
country. I have not the figures before me, but I 
think I am safe in saying that figures as low as one, 
three, and five million cars were advanced as being 
the maximum number which the American market 
could absorb. We all know how far out of line 
such forecasts were. One official, in commenting 
upon the fallacy of attempting to gage post-war 
aviation traffic by pre-war steamship traffic, has 
compared it with an attempt a hundred odd years 
ago to forecast the volume of rail traffic which 
would be carried in this country by basing it on the 
figures for stagecoach traffic. 

We believe that our policy should be based not 
upon an attempt to estimate post-war traffic and 
decide how it shall be split up but upon the as- 
sumption that there will be a great growth of 
traflic if facilities to handle it are available and 
that we should put into service as soon as possible 
the aircraft needed to handle this traffic, make full 
provision for rapid expansion. We should let the 
brains and initiative of our airline operators be 
devoted to selling the desire for more and more 
air transportation to the peoples of the world. 
We deplore any policy based upon an assumption 
that the amount of traffic which will be available 
is only such as to justify the operation of a limited 
number of j^lanes. 

It may well be that in the early days of the post- 
war aviation era there will not be enough traffic 
to justify the operation of a large number of air- 
craft and participation by many competing air- 
lines; but to adopt the single-instrument policy 
in anticipation of such a situation in the near fu- 
ture would be to freeze our international aviation 
policy at the very time when it should be most 
flexible. A single instrument is easier to put to- 
gether than it is to take apart. It can hardly be 
denied that if a single instrument were created 
by law and proved unsatisfactory, it would, as a 
practical matter, prove exceedingly difficult to 
break up, if it turned out to be a mistaken policy. 
On the other hand, if later developments show the 
desirability of merging existing carriers into one, 
this would not be too difficult of accomplishment. 
We should not base a long-range policy on a 
short-range possibility. 

We do not believe that the American people 



want monopoly except in very special cases. 
Analogies between international air transport and 
the postal service and public utilities are not, in 
our opinion, valid. The closer analogy seems 
to be between air and rail and water transporta- 
tion. Where competition is economically feasible 
and in the public interest it is desirable; but mo- 
nopoly should be confined to cases where it is un- 
avoidable. 

The suggestion has been made that foreign air- 
lines will provide the competition needed to assure 
efficiency of operation, reasonable rates, and tech- 
nical progress; but experience shows that this is 
not the case. There is always a tendency to belittle 
or to ignore improvements and developments in- 
augurated by a foreign competitor. On the other 
hand, improvements in service, efficiency, and de- 
creased costs by a competitor of the same nation- 
ality are immediately effective in stimulating the 
progress and develoj^ment of every competitor 
flying the same flag. It is this keen competition 
between the management and operating person- 
nel of airlines of the same nationality that pro- 
vides the stimulus which makes for progress and 
which is immediately reflected in better service and 
cheaper rates for the traveling public. In the case 
of monopoly the tendency is inevitably to resist 
change and to postpone improvement. The travel- 
ing public are the sufferers. 

Another important consideration is that in the 
absence of competition between American car- 
riers there is no proper yardstick by which to judge 
of the operating costs and the efficiency of opera- 
tion of a single American carrier. Comparison 
with foreign companies is inadequate and unsatis- 
factory because of the different conditions affect- 
ing the management of the two lines. A compari- 
son of the operating costs and economy of two 
American companies even if not operating over 
exactly the same route would show which company 
is operating more efficiently and economically and 
which, if either, is drawing unduly on Government 
sujjport. 

One of the chief advantages which will be de- 
rived fi-om competition is the technical progress 
which will be made in the design and development 
of new types of aircraft, engines, facilities, and 
operating teclmiques resulting from the rivalry 
between different companies operating in compe- 
tition with each other. Under a monopoly sys- 
tem the tendency would be to be satisfied with 
(Continued on page 714) 



708 



DEPARTMENT OF STATE BULLETIN 



Security and Inter-American Relations 



Address by PIERRE DE L. BOAL" 



[Released to the prcBS April 9] 

YOU HAVE ASKED ME to talk to jou aboiit our 
relations with Latin America. Let us begin 
-with an effort to situate the other American peo- 
ples and ourselves in the world picture. 

We are a nation of about 140 million people in 
a world of over 2 billions. More than half of 
the world's people are Asiatics. Europe's popu- 
lation outnumbers us three to one. There are 
more people in the world who have been educated 
from cliildhood to believe in authoritarian ide- 
ologies than are numbered in our present popula- 
tion of this country. On the basis of numbers alone 
peoples who live under effective forms of repre- 
sentative government and with individual freedom 
of choice seem to be in a minority. 

Relatively speaking, this hemisphere is sparsely 
populated. There are about 125 millions in Latin 
America, 11 million Canadians and 140 millions in 
the United States. That makes less than 300 mil- 
lions in this hemisphere of the world's population 
of over 2 billions. That is less than 15 percent. 
The population of Latin America is increasing 
more rapidly than that of other parts of this hemi- 
sphere but no faster than in some other parts of 
the world. 

This hemisphere is relatively much better off in 
the matter of resources. A rough guess will be 
that it must have from 30 percent to 50 percent 
of the essential raw materials. 

It seems to me that tliere are three interdepend- 
ent primary factors governing security through 
the use of effective power. 

You must have people. These people must have 
access to natural resources and they must have the 
ability to turn those resources into effective physi- 
cal means of defense. The less than 300 million 
people in this hemisphere have extensive resources. 
Something over-half of these people have devel- 
oped, to a very high degree, the ability and facili- 
ties to use those resources. The rest have the abil- 
ity but it is mostly latent ; it has not been developed. 

Does this mean that some 8 percent or 10 percent 
of the world's population situated in this hemi- 

' Delivered before the Foreign Policy Association In Bal- 
timore, Md., on Apr. 9, 1945. Ambassador Boal is in the 
Office of American Kepublic Affairs, Department of State. 



sphere is relying mainly for its effective defense on 
being able to keep a wide lead in ability to turn 
resources into means of defense at a high rate 
per capita? If so, how does that relate to the 
rest of the world's population ? 

Obviousl}', resources themselves are in a sense 
a fixed quantity which cannot be increased beyond 
what is actually in the ground or can be produced 
from the ground. Population is limited by its 
possible rate of increase. The rate of increase of 
the 8 percent or 10 percent which I have men- 
tioned is not very rapid; not as rapid as that of 
large populations in other parts of the world. 

However optimistic we may be regarding our 
ability to retain our lead, it would be unrealistic 
not to recognize that other people, already much 
more numerous and increasing more rapidly, may 
well develop that ability themselves. Great groups 
of the world's population in the Eastern Hemi- 
sphere may be expected, in the coining years, to in- 
crease their ability to produce more things with 
less hands. Then they may catch up with us in 
effective power because they have more hands 
than we do. 

This in itself may be a war-preventing factor! 
so far as it raises standards of living and oppor- j 
tunity, provided it is accompanied by sufiicient 
understanding and by sufficient tolerance and will- 
ingness to "live and let live"'. However, if w( 
should attempt to stand alone solely on the basis 
of force while other peoples increase their abilitj 
to make things, it could be a danger. 

The world is shrinking with increasing rapidityJ 
In 1912 London was physically no closer to Ger-i 
many than New York is today. If another war 
comes, New York and many of our inland cities! 
as well will be as exposed as London has been ii 
this war. 

The concentration of population, communica-| 
tions, and services in this country means that we 
are increasingly dependent on a network of nerve 
centers for our food, light, heat, power, and abilitj 
to move about. 

In another war the first attack would be onj 
these nerve centers. Missiles faster than sound 
would be rained on them in an effort to paralyzel 
us in a few hours or days. The front would be asj 



APRIL IS, 194S 



709 



broad as the sky, and there would be no quarter 
for civilians who would probably suffer more 
casualties than the armed forces. 

This is the gloomy side of the picture. 

On the brighter side we may note a number of 
favorable factors. 

The present approach of the peace-loving na- 
tions to the problem of security seems to be based 
on two premises. It is a two-wheeled cart. On 
the one hand a method to prevent teonflicts and 
consequent wars, by force if necessary. On the 
other hand, a method to destroy the causes of 
war by positive adjustments and improvements. 
It is not viable without both wheels. 

The organization of security in this hemisphere 
has progressed favorably. The inter-American 
system which sustains and develops security in its 
broadest sense — military, economic, and social — 
is a construction, not a growth. It has been 
achieved by the painstaking efforts of many minds 
and hands in many countries. It is founded on 
an increasing degree of understanding between the 
peoples of those countries themselves. 

Our relations with Canada are sucli that they 
could well be used as a yardstick of what should 
be attained as a relationship between the peoples 
of the world. Even if the leaders of the peoples of 
Canada and the United States wanted to develop 
causes of war and war between their peoples they 
could not do so. Here at last, we have in existence, 
to be seen and studied, a war-proof relationship. 

If we turn to and work on them, standards of 
living and economic interchange can be raised 
throughout this hemisphere to buttress its security. 

Three hundred million people capable of making 
the maximum out of nature's resources with the 
minimum of hands will be safer than if they are 
not so prepared. If they can live in harmony, 
democratically, exercising freedom of choice as 
individuals, they will be even safer. 

Finally, throughout the world, more people than 
ever before are thinking about ways of preventing 
war. If their realization of the need — if their 
energies — can be liarnessed to a common endeavor, 
we will move forward. 

There are peoples in the Eastern Hemisphere 
whose attitude toward individual rights and free- 
doms and government through the representation 
of the individual are similar to ours. There are 
people who are peace-loving, although their ideas 
of government may be different from ours. 
Speaking, for the moment, of power alone, if they 



remain in harmony and unity of purpose with us, 
they and their productive ability can be added to 
ours for defense purposes. There is a corollary 
to this, however: their problems vitally concern 
our welfare. If their security and ours are inter- 
dependent this tends to interlock their regional 
systems with our regional inter- American system. 
An attack upon them which would eliminate their 
power from the list of assets for the defense of 
this hemisphere would therefore be of concern to 
everybody in this hemisphere. We must remem- 
ber with elephantlike tenacity through the many 
years of post-war adjustment that the Germans 
and the Japanese are very numerous, that they are 
not peace-loving, and that they have partisans of 
fascism all over the world who will work to create 
division among the peoples of the United Nations 
and their governments. There are weak seams 
where different concepts and ways of life meet or 
overlap. We must maintain unity for the post- 
war fight against fascist revivals, and we must 
weave to strengthen the bond of understanding 
between peoples as fast as it is humanly possible to 
do so. 

This, in very general and approximate and in- 
complete terms, is the picture. I have purposely 
outlined it largely in terms of force because I want 
to make the point that force alone will not protect 
us. If world security were planned only to 
take account of relative physical power our situa- 
tion might eventually become desperate. 

We must have force; the peace-loving peoples 
of the world must be willing to join in using it, 
if necessary, to prevent wars. But force cannot 
protect the peace indefinitely. It is a temporary 
means to be relied on while the world's peoples 
develop the real, basic protection, a degree of un- 
derstanding between themselves which will make 
it possible to eliminate the causes of war. 

If this picture is at all accurate it must be clear 
that both the rapid material development of Latin 
America and the intensive development of under- 
standing between the inhabitants of the Americas 
are essential to the security and welfare of all con- 
cerned. Unless our people can work together with 
increasing effectiveness with the peoples of Latin 
America, both our security and our welfare are 
jeopardized and so is theirs. 

Sometimes we hear it said that our relations 
with Latin America are deteriorating. Usually 
this is attributed toward what is called "policy'' 
or "lack" of it. 



710 



DEPARTMENT OF STATE BULLETIN 



Let me express what seems to me to have been 
happening. Up to the time of the beginning of 
this war the development of our compatibility 
with the other American republics, achieved 
largely through the development of the inter- 
American system, roughly corresponded to the 
gradual increase of contact between our people 
and the people of those countries. Wlien the war 
came it intensified some of our contacts with Latin 
America and discouraged others. We became al- 
most the only buyers of the produce of some of the 
countries. We became almost the only source of 
machinery and equipment. The flow of tourists 
to and from Latin America ceased. 

As the only buyers of many products, the prices 
for these were set without the influence of com- 
petition. This sometimes put us in an arbitrary 
liffht even though we tried to be fair and also 
tried to help develop the industries from which we 
were buying, not only for the critical needs of a 
long war but so that they might be viable after 
that war. 

War needs made it necessary for us to ration 
our exports to Latin America. While our reasons 
for priority restriction are understood, while it 
is generally realized that what we can't send to 
Latin America goes to defend the whole hemi- 
sphere, a man who could afford to buy a truck but 
can't get one to take his crop to the market never- 
theless feels thwarted. A newspaper editor weigh- 
ing his 4-page daily in one hand and one of our 
20-page metropolitan newspapers in the other may 
feel some sense of frustration even though ship- 
ping and newsprint shortages are explained. 

Latin American businessmen, administrators, 
and agriculturalists have had to come to our Amer- 
ican representatives as suppliants. One asks, 
"Can't I get a motor for my flour mill to feed our 
people?" Another says, "My costs of production 
have gone up because the scarcity of imports has 
raised the cost of living and of production. Can't 
you pay more for my product?" 

Sometimes our people have had to say "No"; 
sometimes there have been long delays. Our repre- 
sentatives haven't liked refusing any more than 
the Latin American has enjoyed asking. The very 
fact that he has had to do more of the asking, 
however, has been adverse to the development of 
compatibility, and so most of our recent contacts 
have been on a rather one-sided business basis 
without sufficient accompanying non-business con- 
tacts, such as those of tourists, students, and 



teachers. Books and magazines and technical pe- 
riodicals are not widely enough exchanged to have 
a sufficient counteracting influence either in Latin 
America or here. 

To put it briefly, contact has outstripped com- 
patibility. Now we need to restore the balance. 
The importance of doing so, like that of helping 
the other American republics to develop their 
productive power, seems to me to be evident. 

The /orai, of international relations is, as a prac- 
tical matter and of necessity, between the spokes- 
men of the peoples involved, but the substance of 
international relations is between the peoples 
themselves; the degree of their misunderstanding 
or understanding, fear or confidence witli one an- 
other is the real measure of their ability to work 
together for any purpose.^ 

It has taken 50 years for the peoples of the 
American republics to develop their present good 
relationship. It is not perfect but it is good ; far 
better than the relationship between peoples in 
many other parts of the world. However, it will 
not only fail to go forward but it will recede if it 
is not worked on constantly and with determina- 
tion by every individual of this hemisphere who is 
able to do so. 

The inter-American sj-stem itself draws its 
reality from the state of mind of the individuals it 
protects. It consists of a series of agreements and 
of organizations set up to work on inter- American 
problems. 

The agreements, reached at periodical meetings 
of the spokesmen of the peoples, include provisions 
for common action to prevent aggression and in- 
filtration for subversive purposes from outside 
this hemisphere and provisions for action to dis- 
courage and, if necessary, put down by force ag- 
gressive movements within this hemisphere. 

The organizations, the largest of which is the 
Pan American Union, which acts as a secretariat 
for all of the American republics, are geared to 
the agreements and meetings. They work on im- 
proving economic and social conditions and elimi- 
nating the causes of conflict and therefore of war. 
In addition to the multilateral understandings be- 
tween the American republics, there are many bi- 
lateral agreements entered into for the purpose of 
developing standards of living and economic in- 
terchange. The system is not static. It is made 
for the purpose of achieving progress as experience 
and understanding make it possible. The periodic 

' Bulletin of Feb. 18, 1945, p. 243. 



APRIL 15, 1945 



711 



meetings provide a forum where conditions pro- 
ductive of conflict can be examined and changes 
and solutions can be brought about as they are 
made possible by increasing understanding and 
confidence. 

Under the inter-American system all of the 
American jDCoples regardless of their numbers, or 
the extent of their territory, are considered as 
equals. Of course their power to implement their 
security or to contribute to their own development 
or those of others, varies according to their effec- 
tive resources. Their varying circumstances must 
be taken into account because they are a matter of 
reality. However, the system is based on the idea 
that all efforts are mutual, reciprocal and informed 
by equal desire for progress and security. 

Documents alone will never protect this hemi- 
sphere. Even organizations formed to work out 
the purposes of the documents will not do so. Un- 
der the democratic concept, the source of authority 
goes back to the individual as a unit. His rights 
and freedoms of choice are jeopardized wherever, 
as an individual, he does not also undertake his 
duties. That individual is you and me — not some 
third person. 

If you and I do not find a means of exercising 
not only our rights and our freedoms but our 
responsibilities, we will face another war. 

Our first task should be to perfect our under- 
standing with the other peoples of this hemisphere. 
Our second is to perfect it with the other peoples 
of the world who think as we do. Our third is to 
develop it with peoples who think differently from 
us but who are or can be peace-loving peoples. 

These three tasks cannot be undertaken succes- 
sively; time will not permit that, for while we 
worked only on our understanding with one group, 
the others would drift dangerously away from 
us. We must strive for understanding on many 
fronts at once just as we strive for victory on 
many fronts at once. 

Our effort to make our relations with other 
peoples safe is an integral part of our effort to 
achieve security by achieving military victory. 
War is part of international relations the way 
bankruptcy is part of finance. No firm could 
avoid bankruptcy by disregarding finance. 

In the past, isolated and protected by oceans 
and by our own wealth and abilities, we have 
tended to relegate our effort on foreign relations 
to a secondary place. 

Now the oceans, for security purposes, are 



shrinking to the former dimensions of the English 
Channel. 

Let us see, for a moment, the relative propor- 
tions of our efforts to achieve security through 
understanding between the peoples and our efforts 
to achieve security through the means of physical 
defense. 

How many people do we use on the effort to 
achieve security through understanding? A few 
thousands. 

More of our armed forces were killed or 
wounded in a few days in the battle for the small 
island of Iwo Jima than are employed in all of 
our non-military governmental relationships with 
all the rest of the world. 

How much money do we use to achieve security 
through understanding? 

We have never spent as much as 100 million 
dollars a year in all of our government's relations 
with the rest of the world. Even if we include 
the amounts spent in private endeavors to develop 
understanding, we might not exceed 100 million 
dollars a year. This war costs 250 millon dollai's a 
day ! If there should be another war, it would 
be more expensive. 

Can we expect to buy good security insurance, to 
develop understanding as a preventive of the use 
of force — at a rate of less than one tenth of one 
percent ? 

These two factors, personnel and money, are 
essential. They will not be effective unless cou- 
pled with the best form of organization. To get 
that each of us must have a determination — a fixity 
of purpose — to insure that the organization de- 
signed to achieve understanding between peoples 
excludes all considerations extraneous to the exe- 
cution of that purpose. This spirit enters into 
the attitude of each individual in this country with 
respect to the winning of the war. The peace will 
not be won without a similar interest in intentness 
on our part as individuals. 

Now, what are the effective means of achieving 
understanding between peoples of this hemisphere 
and of the world ? How can each of us make an 
individual contribution to this purpose? 

In the first place, I should say that each of us 
needs to follow not only the surface events but 
the states of mind that exist among one people 
with regard to another. Our security depends on 
the attitudes of other peoples toward us and ours 
toward them. Thus our foreign relations are our 
first line of defense. Its bulwarks are far beyond 



722 



DEPARTMENT OF STATE BULLETIN 



our shores in the minds and hearts of other peo- 
ples. Its arsenals are in our own. 

So each of us must be aware of the state of our 
relations with other peoples, of what they think 
of us and why ; we must seek to form our own opin- 
ions of the means through which we can succeed 
in understanding and tolerating them and getting 
them to understand and tolerate us. 

As we determine those means we, as individuals, 
must try to see to it that those means are made 
fully available and are fully used. We have two 
examples to indicate to us what those means may 
be and how they can be used. 

I have mentioned our relations with Canada as 
a sort of yardstick of what we should try to 
achieve with the rest of the world. Our relations 
with Canada were developed and consolidated by 
personal acquaintance and relationships. Millions 
of people in Canada and the United States have 
traveled to each other's countries, lived in each 
other's homes and learned to understand each 
other's problems and ways of life. The prevalence 
of a common language has helped although ahuost 
half of the population of Canada is not basically 
English speaking. Proximity has helped just as 
it helped in the development of a similar rela- 
tionship with Mexico and with other American 
republics. 

The development of people-to-people relations 
with Latin America has been more of an organized 
effort within the framework of the inter- American 
system. We did not merely let nature and prox- 
imity take their course. We added a specific gov- 
ernmental effort to bring about exchanges of ideas 
and information through exchanges of books and 
periodicals, translations, movies, and radio pro- 
grams, learning each other's languages and the 
establishment of library cultural centers. We also 
began to foster and to assist exchanges of people, 
sending some of our people to work in Latin Amer- 
ica for a number of years and bringing Latin 
Americans to work or study in this country. 

Compared to the need, the extent of this posi- 
tive effort was small. However, it was all that 
war conditions and the state of our public opinion 
made practicable. 

The positive effort for these purposes now needs 
to be amplified manyfold. Nothing that we could 
ever spend on it in terms of men and money would, 
even remotely, approach the number of people and 
dollars we spend on war. 

Sometimes when something positive is to be done 



in a democracy like ours, it is desirable and per- 
haps even essential that our own individual citi- 
zens should themselves take the lead in action. 

Here is a suggestion that I wish to put forward 
for your consideration and discussion. It has to 
do with each of us who, as individuals, can act 
to develop understanding. 

Suppose m every district, of every big city, in 
every community throughout this country, the citi- 
zens got together and bought enough war bonds 
to finance part of the cost — at least half — of bring- 
ing one person from Latin America to work or 
study in their community and of sending one per- 
son from their community to perform some kind 
of useful, objective work in Latin America? Sup- 
pose we take as a basis for such exchanges a two- 
year period. A fellowship or a teaching grant, or 
a grant for professional or business work, to be 
practical, must carry with it a sufficient amount 
of money to provide living expenses for two years 
and the cost of travel to the United States and 
back to the country of origin and vice versa. Thus, 
if you wish to bring a Latin American to your 
community for a two-year fellowship at the post- 
graduate level, which we have usually found to 
be the most productive level, you need to figure on 
about $2,400 for living expenses and about $800 to J 
cover travel ; a total of $3,200. If you should send " 
one of your people to Latin America for that same 
two-year period, let us say as a vocational teacher 
in a normal school to teach teachers — carpentry, 
electric wiring, the working of sheet iron, or some 
similar subject, which they can then import to 
raise the standard of living and productive abili- 
ties of their people — j^ou would need to figure for 
that expense about $5,000, because a teacher has 
to be paid more than the bare living expenses for 
a fellowship to this country. That makes a total 
for the exchange of $8,200. 

Suppose you got together half or a little more 
than half that sum, say $4,500, putting the money 
into war bonds until you had the whole amount 
in war bonds ; that would help win the present war. 
Suppose you then went to the Division of Cul- 
tural Cooperation, Department of State, and 
sought help to make this exchange — financial help, 
help to select your person to send out and to find 
the proper person from Latin America to come 
and work with you. 

The Slate Department has some funds and has 
agreements for such exchanges with various Latin 
American countries which pro^^de some further 



APRIL 15, 1945 



713 



resources. When the State Department helped to 
realize this project and got the people exchanged, 
would not this personal effort of yours through 
your purchase and use of these war bonds also help 
to prevent another war? Would it not work for 
your own personal security, present and future ? 

I have spoken of teachers and postgraduate stu- 
dents. There are of course other kinds of ex- 
change. Men and women from Latin America 
can come here to work for a time on newspapers 
or for industrial or agricultural training. Our 
people can go abroad to help develop better agri- 
cultural methods or necessary small industries. 

Wherever a Latin American country can raise 
its standard of living by providing more of its 
own basic things out of its own resources, making 
cheaper window glass locally, rather than import- 
ing it, working its own woods rather than import- 
ing wood, in fact improving its ability to use what 
it has, it raises its purchasing power and ulti- 
mately buys more from us in other moi'e compli- 
cated articles. That increases our own manufac- 
ture of such articles, as electrical equipment, tools 
and machinery, for instance. The man who pre- 
viously sold glass or Oregon lumber to Latin 
America does not lose his market or have it cut 
down, because he sells these primary articles, the 
glass and the lumber, to our own people because 
they can build more factories and more houses 
since they have more work to do. 

I have tried to put before you what seemed to 
me to be essential basic pictures. I have not dis- 
cussed the current details of evolving political re- 
lations between Latin American governments. I 
could not deal with both aspects of relations in 
the allotted time, but I shall be glad to attempt to 
answer such questions on political or other con- 
ditions as you may wish to put. 

Political relations seem to me to be an end- 
result arising from causes which are economic or 
social, or derived from what people think of each 
other. Our budding effort to develop understand- 
ing bore real fruit at the Mexico City conference 
and in so doing attenuated some of the political 
tensions. Those tensions exist, and they have to 
be dealt with from day to day ; they involve con- 
stant and difi'ering methods of adjustment: but if 
the basic relations between peoples can be im- 
proved so that fairness and confidence will be the 
order of the day, political tensions will slacken 
and have no chance of causing armed conflict be- 
tween any of the peoples of this hemisphere. 



Statements of Cargo Availability 

FEDERAL REGULATIONS: TITLE 32 NATION- 
AL DEFENSE 

The following amendment has been made to 
Chapter VIII — Foreign Economic Administration, 
Subchapter B— Export Control, Part 808— Pro- 
cedure Relating to Shipments of Licensed Exports 
to the Other American Republics : ^ 

Paragi-aph (b) of § 808.3 Shipments not re- 
quiring statements of cargo availability is hereby 
amended to read as follows : 

(b) Shipments of any commodity licensed for 
export to Argentina, weighing less than 2240 
pounds (even though it is a partial shipment of a 
larger licensed quantity) may be booked by the 
exporter or his agent directly with the steamship 
company without the submission of a statement 
of cargo availability or compliance with the pro- 
cedure set forth in §§ 808.4 to 808.7 except that the 
provisions of this paragi-aph shall not apply to 
shipments of newsprint. 

Paragraph (b) of § 808.4 Shipments requiring 
statements of cargo availability is hereby amended 
to read as follows : 

(b) No shipment of newsprint, regardless of 
weight, and no shipment weighing 2240 pounds or 
more of any other commodity or commodities for 
which a license has been issued permitting the ex- 
portation thereof may be booked for shipment 
by or with a steamship company or exported by 
sea fi'eight to Argentina unless the provisions of 
subparagi-aphs (1) through (4), inclusive, of par- 
agraph (a) of this section have been complied 
with by the exporter or his agent. No shipment 
of newsprint, regardless of weight, may be booked 
for shipment by or with a steamship company or 
exported by sea freight to any of the destinations 
specified in paragraph (b) of § 808.1 unless the 
provisions of subparagraphs (1) through (4), in- 
clusive, of paragraph (a) of this section have been 
complied with by the exporter or his agent. 

This amendment shall become effective imme- 
diately except that shipments of newsprint weigh- 
ing 2240 pounds or less for wliich a firm booking 
was made with a steamship company and wMch 
were on dock, on lighter or in transit to a port of 
exit prior to the effective date of this amendment 
may be exported without the submission of a state- 
ment of cargo availability. 



' 10 Federal Register 3799. 



714 



DEPARTMENT OF STATE BULLETIN 



Selection of Chinese Biologist 
To Visit United States 

[Released to tbc press April 12] 

Professor Tso-hsin Cheng, biologist, has been 
selected by Fukien Christian University for a 
year's visit in the United States at the invitation 
of the Department of State. Dr. Cheng received 
his M.S. from the University of Michigan in 1928, 
and his Sc.D. from the same university in 1930. 
Since his return to China in 1930 he has been 
head of the biology department at Fukien Chris- 
tian University. In addition to writing many 
scientific papers on embryological research in am- 
phibians and birds, he is the author of eight text- 
books on biology, zoology, and embryology and 
has served as editor of the Chinese Science Jour- 
nal and the Biological Bulletin. Like the other 
five Chinese educators coming to this country un- 
der the same program, whose names were an- 
nounced by the Department on January 9, 1945,^ 
Dr. Cheng will visit various American educa- 
tional centers, give public lectures, and take part 
in conferences. Letters, invitations, or inquiries 
should be addressed to the Division of Cultural 
Cooperation, Department of State, Washington 
25, D.C. 

AVIATION PROBLEMS— Co»fi»»ed from page 707 

existing models and established conditions. It is 
rivalry which makes for progress and which forces 
improvement and development because of the 
alertness and resourcefulness which is required 
under competitive conditions. Competition is as 
essential to technical and scientific development 
as it is to efficiency of operation. 

Wliile we recognize the fact that international 
traffic available to American flag carriers will be 
reduced through competition by foreign flag oper- 
ators, we believe that American carriers, by their 
proved efficiency of operation, will be able to ob- 
tain and retain their fair share of this international 
traffic, and it does not follow that that share should 
be turned over to a single monopoly company. 

Let me make it very plain that this does not 
mean that in opposing monopoly we want unre- 
stricted, unregulated competition. Under the pres- 
ent law an American air carrier wishing to engage 
in international air commerce must obtain a cer- 
tificate from the Civil Aeronautics Board. We 



' Bulletin of Jan. 14, 1945, p. 65. 



are quite content to leave it to the discretion of that 
Board to see that there are not too many Amer- 
ican carriers on any route in the international 
field at any time. We would be quite content to 
see only one American company operating over a 
route when the traffic did not justify operation 
by more than one, but we do feel that the way 
should be left open so that the Civil Aeronautics 
Board at such time as circumstances might justify 
the certification of two American companies over 
a route or between terminal points on diverging 
routes could permit the entry of a second company. 
Tliis would, of course, be impossible if the pro- 
posed single-instrument bill is enacted into law. 

PROBLEMS OF SMALL BUSINESS — Continued from 
page "100 

not then possible to estimate whether such costs 
would be lower than or higher than existing 
United States production costs. As a matter 
of fact, the cost of production in Canada during 
the war period has apparently been somewhat 
higher than in most U.S. plants due to the greater 
cost of delivery of bauxite to the Canadian plants. 
This condition could not have been foreseen in 
tlie spring of 1941, prior to the entry of the United 
States into the war, since the principal factor in 
the increase of bauxite transportation costs was 
the effectiveness of German submarine warfare 
along the Atlantic Coast of the United States and 
the stringency in shipping. It is not possible to 
make a definite statement as to comjaetitive costs 
in the post-war period. 

12. Can you suggest v^/iat can and should he 
done now hy the United States Govermment to 
place United States producers on a competitive 
basis icith the Canadian company in domestic and 
foreign markets? 

This question deals with a very complicated sub- 
ject to which I have not had the opportunity to 
give adequate study. I should prefer not to ex- 
pi'ess an opinion. 

Aviation Agreements 

(Released to the press April 9] 

Belgium 

Viscount Alain du Pare, Chairman of the Bel- 
gian Delegation to the International Civil Avia- 
tion Conference, signed on April 9 the following 
documents concluded at the Conference in Chi- 
cago on December 7, 1944 : 



APRIL 15, 1945 



715 



Interim Agreement on International Civil 

Aviation 
International Air Services Transit Agreement 
Convention on International Civil Aviation 

Including Belgium, 44 countries have signed 
the interim agreement, 37 countries the transit 
agreement, and 41 countries the convention. 

Foreign Aviation Experts ' 

Purpose. This instruction is issued to inform 
the personnel of the Department concerned of the 
Departmental procedure established for collabora- 
tion with the Civil Aeronautics Administration 
in rendering tecluaical assistance to foreign avia- 
tion experts who come to this country to observe 
American civilian aviation techniques, equipment, 
and installations. 

Background. In accordance with an under- 
standing between the Department of State and the 
Department of Commerce, the Department of 
State and the Civil Aeronautics Administration 
will collaborate in making the necessary provi- 
sions for the clearance of visits of foreign avia- 
tion experts to the United States. Since the re- 
sponsibilities of the Department involve several 
divisions it is essential that the respective func- 
tions of these divisions be clearly defined. 

1 ResponsibUities of the Aviation Division in 
securing info-nnation. The Aviation Division 
shall be informed when a division receives a re- 
quest, either through American missions abroad 
or through foreign missions in Washington, for a 
visit to the United States by foreign technical 
personnel to inspect American civilian aviation 
techniques, equipment, and installations. The 
Aviation Division .shall then undertake imme- 
diately to procure the following information: 

(a) Names and positions of the proposed 
visitors. 

(b) Proposed date of arrival and departure. 

(c) Objective of visit, including specific in- 
formation as to the types of installations they 
wish to examine, with particular locations indi- 
cated by name wherever possible. 

(d) Expenses which the visitors are prepared 
to assume. 

2 Transmission of information to the Civil 
Aeronautics Administration hy the Aviation Divi- 
sion. 

(a) The above information shall be transmitted 



by the Aviation Division of the Department to the 
Civil Aeronautics Administration with an inquiry 
as to whether the proposed visit is agreeable to the 
Civil Aeronautics Administration and whether the 
Civil Aeronautics Administration is ready and 
able to make technical arrangements within the 
United States for it. 

(b) Tlie Civil Aeronautics Administration shall 
be furnished by the Aviation Division with any 
available information concerning the participa- 
tion of foreign sources in the expenses of such a 
mission of technical visitors, for its guidance in 
formulating plans for the mission. (In cases 
where foreign sources do not underwrite the en- 
tire expenses of the mission, the Civil Aeronautics 
Administration will not undertake to receive such 
a mission unless any additional necessary fluids 
are available to the Civil Aeronautics Administra- 
tion.) 

3. Formal Clearance from War and Navy De- 
partments to he obtained iy the Division of Pro- 
tocol of the Department. Upon notification to the 
Deiaartment by the Civil Aeronautics Administra- 
tion of its readiness, willingness, and ability to 
make technical arrangements within the United 
States for the proposed visit and of the date upon 
which it will be prepared to receive the visitors, 
together with a scheduled itinerary for them and 
any other pertinent details, the Division of Pro- 
tocol shall endeavor to obtain formal clearance 
from the War and Navy Departments. TVlien 
such clearance is obtained, the Division of Pro- 
tocol shall so notify the foreign government con- 
cerned and transmit copies of such notification to 
the Aviation Division of the Department of State. 

4 Procedur^e on arrival of foreign visitors in 
this country. On arrival in this country, the 
foreign visitors shall call on the Aviation Divi- 
sion of the Department of State, which shall turn 
them over to the Civil Aeronautics Administra- 
tion. (The Civil Aeronautics Administration will, 
after discussion with the visitors, clear through 
the Department of State, any further details with 
respect to these visits.) 

5 Arrangement hy the Civil Aeronautics Ad- 
ministration for cooperation of the aeronautical 
industry. The Civil Aeronautics Administration 
will make the arrangements for such cooperation 
as may be desired from tlie aeronautical industry. 



' Administrative Instruction, General Administration 
22, issued and effective Mar. 30, 1945. 



776 



DEPARTMENT OF STATE BULLETIN 



' ^ THE DEPARTMENT =^ 



Appointment of Officers 

Charles P. Tuft as Director of the Office of 
Transportation and Communications, effective 
April 1, 1945. 

Philip W. Ireland as Special Assistant to the 
Director of the Office of Near Eastern and African 
Affairs, effective April 1, 1945. 

Chauncey L. Simering as Acting Executive Sec- 
retary of the United States Section of the Anglo- 
American Caribbean Commission, effective April 
9, 1945. 



^ THE CONGRESS 



Cotton : Hearings before the Subcommittee of the Com- 
mittee on Agriculture, House of Representatives, Seventy- 
eighth Congress, Second Session, December 4 to 9, 1944. 
V, 850 pp. [Department of State, pp. 211-220.] 

Lend-Lease : Hearings before the Committee on Foreign 
Relations, United States Senate, Seventy-ninth Congress, 
First Session, on H.R. 2013, an act to extend for one year 
the provisions of an act to promote the defense of the 
United States, approved March 11, 1941, as amended. 
March 28 and April 4, 1945. ii, 40 pp. 

Post-War Economic Policy and Planning: Hearings 
before the Subcommittee on Foreign Trade and Shipping, 
Special Committee on Post-War Economic Policy and 
Planning, House of Representatives, Seventy-eighth Con- 
gress, Second session, and Seventy-ninth Congress, First 
session, pursuant to H. Res. 408 and H. Res. 60, resolutions 
creating a siieeial committee on post-war economic policy 
and planning; Part 4, September 25-29; October 24-27; 
November 29-30 ; December 1, 1944 ; and January 11, 1945, 
Problems of Foreign Trade and Shipping, iv, 620 pp. 
[Department of State, pp. 1071-1098.] 



Safeguarding Military Information. S. Rept 161, 79th 
Cong., to accompany S. 805. 2 pp. [Favorable report.] 

Extension of Lend-Lease Act (H.R. 2013). S. Rept. 178, 
79th Cong., to accompany H.R. 2013. 6 pp. [Favorable 
report.] 

Investigation of Petroleum Resources in Relation to the 
National Welfare. Intermediate Report of the Special 
Committee Investigating Petroleum Resources pursuant 
to S. Res. 36 (Extending S. Res. 253.— 78th Congress), 
authorizing and directing a special committee of eleven 
Senators to make a full and complete study and investiga- 
tion with respect to petroleum resources, and the produc- 
tion and consumption of petroleum and petroleum products, 
both within and outside the United States, in their rela- 
tion to our national welfare and security, and to report 
to the Senate at the earliest practicable date the results of 
Buch study and investigation, together with its recom- 
mendations for the formulation of a national petroleum 
policy. S. Rept. 179, 79th Cong, ii, 5 pp. 

Relating to Escapes of Prisoners of War and Interned 
Enemy Aliens. S. Rept. ISO, 79th Cong., to accompany 
H. R. 1525. 2 pp. [Favorable report.] 

Promotion of Certain American Prisoners of War. S. 
Rept. 182, 79th Cong., to accompany S. 421. 3 pp. [Favor- 
able report] 

Annual Report of the American Historical Association, 
1942, in three volumes ; volume I, Proceedings and List of 
Members. H. Doc. '12, 78th Cong, xxii, 137 pp. 

Joint Resolution relative to determination and pay- 
ment of certain claims against the Government of Mexico. 
Approved April 3, 1945. H. J. Res. 115. Public Law 29, 
79th Cong. 2 pp. 



PUBLICATIONS 



Department of State 

Anthropological Research and Investigation : Agreement 
Between the United States of America and Peru — Effected 
by exchange of notes signed at Lima March 9 and August 
4, 1944. Executive Agreement Series 438. Publication 
2307. pp. 5(*. 

Post-War Disposition of Defense Installations and Facil- 
ities: Agreement Between the United States of America 
and Canada Amending the Agreement of January 27, 
1943 — Effected by exchange of notes signed at Washington 
November 22 and December 20, 1944. Executive Agree- 
ment Series 444. Publication 2308. 6 pp. 5(i. 

Foreign Commerce Weekly 

The articles listed below will be found in the April 14 
issue of the Department of Commerce publication entitled 
Foreign Commerce Weekly, copies of which may be ob- 
tained from the Superintendent of Documents, Govern- 
ment Printing Office, for 10 cents each : 

"Switzerland's Program of New Highway Construction", 
by Robert T. Cowan, vice consul, American Consulate, 
Casablanca, Morocco. 

"Chilean Import and Exchange Controls", by Norrls S. 
Haselton, second secretary and vice consul, American Em- 
bassy, Santiago, ChUe. 



APRIL 15, 1945 jjy 



Contents continued 



Post-Wae Matteks — Continued Page 

Meeting of tiie Committee of Jurists: 
First Plenary Session: 

Address by the Secretary of State 672 

Address by the Representative of China 673 

Address by the Representative of New Zealand . . . 673 

First Meeting of the Committee 674 

Food and Agriculture Organization of the United Nations: 

Statement by the Secretary of State 685 

Statement by Assistant Secretary Acheson 686 

Statement by Assistant Secretary Clayton 689 

International Aviation Problems. Address by Stokeley W. 

Morgan 701 

Treaty Information 

Adherence by Lebanon, Saudi Arabia, and Syria to the 
Declaration by United Nations: 
Ceremony on the Occasion of the Signing of the Declara- 
tion: 

Remarks by the Secretary of State 681 

Remarks by the Minister of Syria 681 

Remarks by the Minister Designate of Lebanon . . . 682 
Remarks by the Viceroy of the Hejaz and Minister of 

Foreign Affairs of Saudi Arabia 682 

Aviation Agreements. Belgium 714 

The Department 

Foreign Aviation Experts 715 

Appointment of Officers 716 

Publications 716 

The Congress 716 



0. S. 60VERNMENT PRINTIN6 OFFICEi It4l 



THE DEPARTMENT OF STATE 




A^ 



J 





VOL. XII, NO. 304 



APRIL 22, 1945 



In this issue 



MESSAGE OF THE PRESIDENT TO THE CONGRESS 

RENEWAL OF TRADE AGREEMENTS 

Statement by the Secretary of State 

"THE CLIMATE OF PEACE" 
By Marion Parks 

OKINAWA AND THE LIUCHIUS 

By Paul S. Amos 



For complete contaUs 
tee inside cover 



^©NT O^ 




^■*xes o^ 



%J, \t\J} L.I till I Uli 



MAY' 8 1945 



THE DEPARTMENT OF STATE 



BULLETIN 



Vol. XII • No. 304 




PoBUCATIOn 2321 



The Department of State BULLETIN, 
a weekly publication compiled and 
edited in the Division of Research and 
Publication, Office of Public Affairs, 
provide* the public and interested 
agencies of the Government tcith 
information on developments in the 
field of foreign relation* and on the 
work of the Department of State and 
the Foreign Service. The BULLETIN 
includes press releases on foreign 
policy issued by the White House and 
the Department, and statement* and 
addresses made by the President and 
by the Secretary of State and other 
officers of the Department, as tcell as 
special articles on various phases of 
international affairs and the functions 
of the Department. Information con- 
cerning treaties and international 
agreements to which the United States 
is or may become a party and treaties 
of general international interest i* 
included. 

Publication* of the Department, 
cumulative lists of ivhich are published 
at the end of each quarter, as well as 
legislative material in the field of inter- 
national relatioru, are listed currently. 

The BULLETIN, published with the 
approval of the Director of the Bureau 
of the Budget, is for sale by the Super- 
intendent of Documents, United State* 
Government Printing Office, Washing- 
ton 25, D. C, to whom all purchase 
orders, with accompanying remittance, 
should be sent. The subscription price 
it $3.50 a year; a single copy is 10 
cents. 







ontents 



American Republics pag, 

"The Climate of Peace". By Marion Parks 732 

Europe 

Notification by Germany Concerning Exchange of Sick and 

Wounded Prisoners of War 737 

Far East 

Okinawa and the Liuchius. Bj' Paul S. Amos 743 

Near East 

Presentation of Letters of Credence: 

Ambassador of the Turkish Republic 775 

Minister of Lebanon 776 

Cultural Cooperation 

Visit of Mexican Ethnographer 784 

Economic Affairs 

Bretton Woods: A Monetary Basis for Trade. Address by 

Assistant Secretary Acheson 738 

Relations Between Foreign Trade and the Welfare of Small 

Business. Statement by Assistant Secretary Clayton. 760 

Fourth Meeting of the International Cotton Advisory Com- 
mittee: 
Final Action: Resolution 772 

Motion by the Committee . . • 772 

Establishment of Facts Regarding Current World Cotton 

Supplies and Requirements 773 

Post-War IMatters 

Message of the President to the Congress 721 

United Nations Conference on International Organization: 
Meeting of the United States Delegation. Statement by 

the Secretary of State 724 

Designation of Consultants to the United States Dele- 
gation 724 

Soviet Request To Invite Provisional Government in 
Warsaw to Conference. Statement by the Depart- 
ment of State 725 

Exchange of Letters Between Cordell Hull and the Secre- 
tary of State 726 

The San Francisco Conference. Address by Assistant 

Secretary Holmes 727 

Announcement of Various Foreign Delegations 729 

Meeting of the Committee of Jurists: Drafting of Statute 

for an International Court of Justice 769 

(Continued on p. 786) 



Message of the President to the Congress 



[Released to the press by the White House April 16] 

Mr. Speaker, Mr. President, Members of Con- 
gress : It is with heavy heart that I stand before 
you, my friends and colleagues, in the Congress of 
the United States. 

Only yesterday, we laid to rest the mortal re- 
mains of our beloved President, Franklin Delano 
Roosevelt. At a time like this, words are inade- 
quate. The most eloquent tribute would be a rev- 
erent silence. 

Yet, in this decisive hour, when world events are 
moving so rapidly, our silence might be misunder- 
stood and might give comfort to our enemies. 

In His infinite wisdom. Almighty God has seen 
fit to take from us a great man who loved, and was 
beloved by, all humanity. 

No man could possibly fill the tremendous void 
left by the passing of that noble soul. No words 
can ease the aching hearts of untold millions of 
every race, creed, and color. The world knows it 
has lost a heroic champion of justice and freedom. 

Tragic fate has thrust upon us grave responsi- 
bilities. We must carry on. Our departed leader 
never looked backward. He looked forward and 
moved forward. That is what he would want us 
to do. That is what America will do. 

So much blood has already been shed for the 
ideals which we cherish, and for which Franklin 
Delano Roosevelt lived and died, that we dare not 
permit even a momentary pause in the hard fight 
for victory. 

Today, the entire world is looking to America 
for enlightened leadership to peace and progress. 
Such a leadership requires vision, courage, and 
tolerance. It can be provided only by a united 
nation deeply devoted to the highest ideals. 

I call upon all Americans to help me keep our 
Nation united in defense of those ideals which have 
been so eloquently proclaimed by Franklin Roose- 
velt. 

I want in turn to assure my fellow Americans 
and all of those who love peace and liberty 
throughout the world that I will support and de- 
fend those ideals with all my strength and with 
all my heart. That is my duty and I shall not 
shirk it. 



So that there can be no possible misunderstand- 
ing, both Germany and Japan can be certain, be- 
yond any shadow of doubt, America will continue 
to fight for freedom until no vestige of resistance 
remains ! 

We are deeply conscious of the fact that much 
hard fighting is still ahead of us. 

Having to pay such a heavy price to make com- 
plete victory certain, America will never become 
a party to any plan for partial victory ! 

To settle for merely another temporary respite 
would surely jeopardize the future security of all 
the world. 

Our demand has been, and it remains, uncondi- 
tional surrender ! 

We will not traffic with the breakers of the peace 
on the terms of the peace. 

The responsibility for the making of the peace — 
and it is a very grave responsibility — must rest 
with the defenders of the peace, the United Na- 
tions. We are not unconscious of the dictates of 
humanity. We do not wish to see unnecessary or 
unjustified suffering. But the laws of God and of 
man have been violated and the guilty must not go 
unpunished. Nothing shall shake our determina- 
tion to punish the war criminals even though we 
must pursue them to the end of the earth. 

Lasting peace can never be secured if we permit 
our dangerous opponents to plot future wars with 
impunity at any mountain retreat — ^liowever dis- 
tant. 

In this shrinking world, it is futile to seek safety 
behind geographical barriers. Real security will 
be found only in law and in justice. 

Here in America, we have labored long and 
hard to achieve a social order worthy of our great 
heritage. In our time, tremendous progress has 
been made toward a really democratic way of life. 
Let me assure the forward-looking people of 
America that there will be no relaxation in our 
efforts to improve the lot of the conamon people. 

In the difficult days ahead, imquestionably we 
shall face problems of staggering proportions. 
However, with the faith of our fathers in our 
hearts, we fear no future. 

On the battlefields, we have frequently faced 

721 



722 



DEPARTMENT OF STATE BULLETIN 



overwhelming odds — and won ! At home, Ameri- 
cans will not be less resolute ! 

We shall never cease our struggle to preserve 
and maintain our American way of life. 

At this very moment, America, along with her 
brave Allies, is paying again a heavy price for the 
defense of our freedom. With characteristic en- 
ergy, we are assisting in the liberation of entire 
nations. Gradually, tlie shackles of slavery are 
being broken by the forces of freedom. 

All of us are praying for a speedy victory. 
Every day peace is delayed costs a terrible toll. 

The armies of liberation today are bringing to 
an end Hitler's ghastly threat to dominate the 
world. Tokyo rocks under the weight of our 
bombs. 

The grand strategy of a United Nations' war has 
been determined — due in no small measure to the 
vision of our departed Commander in Chief. We 
are now carrying out our part of that strategy un- 
der the able direction of Admiral Leahy, General 
Marshall, Admiral King, General Arnold, General 
Eisenhower, Admiral Nimitz, and General Mac- 
Arthur. 

I want the entire world to know that this direc- 
tion must and will remain — unchanged and un- 
hampered! 

Our debt to the heroic men and valiant women 
in the service of our country can never be repaid. 
They have earned our undying gratitude. Amer- 
ica will never forget their sacrifices. Because of 
these sacrifices, the da^vn of justice and freedom 
throughout the world slowly casts its gleam across 
the horizon. 

Our forefathers came to our rugged shores in 
search of religious tolerance, political freedom, and 
economic opportunity. For those fundamental 
rights, they risked their lives. We know today 
that such rights can be preserved only by constant 
vigilance, the eternal price of liberty ! 

Within an hour after I took the oath of office, I 
announced that the San Francisco conference 
would proceed. We will face the problems of 
peace with the same courage that we have faced 
and mastered the problems of war. 

Li the memory of those who have made the su- 
preme sacrifice — in the memory of our fallen Pres- 
ident — ice shall not fail! 

It is not enough to yearn for peace. We must 
work and, if necessary, fight for it. The task of 
creating a sound international organization is 
complicated and difficult, Yet, without such or- 



ganization, the rights of man on earth cannot be 
protected. Machinery for the just settlement of 
international differences must be found. Without 
such machinery, the entire world will have to re- 
main an armed camp. The world will be doomed 
to deadly conflict, devoid of hope for real peace. 

Fortunately, people have retained hope for a 
durable peace. Thoughtful people have always 
hnd faith that ultimately justice mu.S!t triumph. 
Past experience surely indicates that, without jus- 
tice, an enduring peace becomes impossible. 

In bitter despair, some people have come to be- 
lieve that wars are inevitable. With tragic fatal- 
ism, they insist that, as wars have always been, 
of necessity wars will always be. To such defeat- 
ism, men and women of good-will must not and 
cannot yield. The outlook for humanity is not so 
hopeless. 

During the darkest hours of this horrible war, 
entire nations were kept going by something in- 
tangible — hope ! When warned that abject sub- 
mission offered the only salvation against over- 
wli"Iming power, hope showed the way to victory. 

Hope has become the secret weapon of the forces 
of liberation I 

Aggressors could not dominate the human mind. 
As long as hope remains, the spirit of man will 
nevtr be crushed. 

But hope alone was not and is not sufficient to 
avert war. We must not only have hope but we 
must have faith enough to work with other peace- 
loving nations to maintain the peace. Hope was 
not enough to beat back the aggressors as long as 
the peace-loving nations were unwilling to come 
to each other's defense. The aggressors were 
beaten back only when the peace-loving nations 
united to defend themselves. 

If wars in the future are to be prevented, the 
peace-loving nations must be united in their de- 
termination to keep the peace under law. The 
breaking of the peace anywhere is the concern of 
peace-loving nations everywhere. 

Nothing is more essential to the future peace of 
the world than continued cooperation of the na- 
tions which had to muster the force necessary to 
defeat the conspiracy of the Fascist powers to 
dominate the world. 

While these great states have a special respon- 
sibility to enforce the peace, their responsibility is 
based upon the obligations resting upon all states, 
large and small, not to use force in international 
relations except in the defense of law. The re- 



APRIL 22, 1945 



723 



sponsibility of the great states is to serve and not 
dominate the peoples of the world. 

To build the foundation of enduring peace we 
must not only work in harmony with our friends 
abroad but we must have tlie united support of our 
own people. 

Even the most experienced pilot cannot bring a 
ship safely into harbor unless he has the full co- 
operation of the crew. For the benefit of all, 
every individual must do his duty. 

I appeal to every American, regardless of party, 
race, creed, or color, to support our efforts to build 
a strong and lasting United Nations Organization. 

You, the members of Congress, surely Imow how 
I feel. Only with your help can I hope to com- 
plete one of the greatest tasks ever assigned to a 
public servant. With Divine guidance, and your 
help, we will find the new passage to a far better 
world, a kindly and friendly world, with just and 
lasting peace. 

With confidence, I am depending upon all of 
you. 

To destroy greedy tyrants with plans of world 
domination, we cannot continue in successive gen- 
erations to sacrifice our finest j'outh. 

In the name of human decency and civilization, 
a more rational method of deciding national dif- 
ferences 7mtst and will be found ! 

An^erica must assist suffering hiunanity back 
along the path of peaceful progress. This will 
require time and tolerance. We shall need also 



an abiding faith in the people, the kind of faith 
and coui'age which Franklin Delano Roosevelt 
always had ! 

Today, America has become one of the most 
powerful forces for good on earth. We must keep 
it so. We have achieved a world leadership which 
does not depend solely upon our military and 
naval might. 

We have learned to figlit with other nations 
in common defense of our freedom. We must now 
learn to live with other nations for our mutual 
good. We must learn to trade more with other 
nations so that there may be — for our mutual 
advantage — increased production, increased em- 
ployment, and better standards of living through- 
out the world. 

May we Americans live up to our glorious 
heritage. 

In that way, America may well lead the world 
to peace and prosperity. 

At this moment, I have in my heart a prayer. 
As I assume my heavy duties, I humbly pray to 
Almighty God, in the words of Solomon : 

"Give therefore thj' servant an understanding 
heart to judge thy people, that I may discern be- 
tween good and bad : for who is able to judge this 
thy so great a people?" 

I ask only to be a good and faithful servant of 
my Lord and my people. 



Signing of Fourth Protocol With Soviet Government 



[Released to the press April 21] 

Representatives of the Governments of the 
United States, the United Kingdom, Canada, and 
the Union of Soviet Socialist Republics signed on 
April 17, 1945 in Ottawa an agreement known as 
the Fourth Protocol covering the provision of sup- 
plies to the Soviet Government in furtherance of 
the war against the common enemy. The period 
covered by the protocol is July 1, 19-14 to June 30, 
1945, but, although the formal signing took place 
on April 17, 1945, the provisions of the agreement 
have been effective since the thirtieth of June last, 
and the flow of supplies of all kinds needed for the 
prosecution of the war has contmued without 
interruption. 

In the protocol the Soviet Government reaffirms 
its determination to furnish the other parties to 



the agreement with such raw materials, other sup- 
plies and services required for war use as can be 
made available. 

Three former agreements of this kind have been 
signed : The first in Moscow, October 4, 1941, the 
second in Washington in October 1942, and the 
third in London in October 1943. The agreement 
just concluded in Ottawa was signed by the United 
States Ambassador to Canada on behalf of the 
United States, by the United Kingdom High Com- 
missioner to Canada on behalf of the United King- 
dom, by the Prime Minister and the Minister of 
Finance on behalf of Canada, and by the Soviet 
Ambassador to Canada on behalf of the Union of 
Soviet Socialist Republics. 
Ottawa, April 20, 19^6. 



724 



DEPARTMENT OF STATE BULLETIN 



United Nations Conference on International 

Organization 



Meeting of the United States 
Delegation 

Statement by THE SECRETARY OF STATE 

[Released to the press April 18] 

The United States Delegation ' to the San Fran- 
cisco conference completed this morning its review 
and examination of the Dumbarton Oaks Pro- 
posals. 

The members of the Delegation had a full and 
frank exchange of views on each chapter and para- 
graph of the Proposals. Various suggestions by 
members of the Delegation were considered as 
well as suggestions made by other governments 
and by various groups and individuals in the 
United States. The Delegation is in agreement 
on all major points and is going to San Francisco 
confident that the conference will be able to agree 
upon a charter for an effective international organ- 
ization for peace and security which will fulfil the 
high hopes of the millions of peace-loving peoples 
of this coimtry and the world. 

Designation of Consultants to 
The United States Delegation 

[Released to the press April 21] 

The Secretary of State announced on April 21 
that the following persons would serve as con- 
sultants to the United States Delegation to the 
United Nations Conference on International Or- 
ganization in San Francisco, each having been 
named by one of the 42 national organizations 
which were invited by the Secretary of State to 
designate a consultant. The names of persons who 
have been designated as associates of the consult- 
ants are also given. The list follows : 

American Association for the United Nations: 
Sir. Clarlt M. liiclielberger, consultant 
Dr. Plillip Nash, associate 
Miss Margaret Olson, assot-iate 



' BtJLixTiN of Feb. 18, 1&15, p. 217. 



American Association of University Women: 

Dr. Helen D. Reld, consultant 

Mrs. Malbone W. Graham, associate 

Dr. Aurella Henry Reinhardt, associate 
Amer-ican Bar Association: 

Mr. David A. Simmons, consultant 

Mr. Mitchell B. Carroll, associate 

Mr. William L. Ransom, associate 
American Council on Education: 

Dr. Herman B. Wells, consultant 

Dr. Howard Wilson, associate 

Miss Helen C. Hurley, associate 
American Farm Bureau Federation: 

Mr. Edward A. O'Neal, consultant 

Mrs. Charles W. Sewell, associate 
American Federation of Labor: 

Mr. Robert J. Watt, consultant 

Mr. Robert Byron, associate 

Mr. David Beck, associate 
American Jewish Committee: 

Mr. Joseph M. Proskauer, consultant 

Mr. Jacob Blaustein, associate 

Mr. George Z. Medalie, associate 
American Jeicish Conference: 

Mr. Henry Monsky, consultant 

Mr. Louis Lipsky, associate 

Mr. Israel Goldstein, associate 
American Legion: 

Commander Edward N. Scheiberling, consultant 

Mr. David Camelon, associate 
American Section — International Oliamher of Commerce: 

Mr. Philip B. Reed, consultant 

Mr. Marshall Dill, associate 
Americans United for World Organization, Inc.: 

Mr. Hugh Moore, consultant 

Mr.s. Doris Warner Leroy, associate 

Mr. Ulrie Bell, associate 
American Veterans Committee: 

Mr. Charles G. Bolt§, consultant 

Mr. Alfred Lilienthal, associate 

Mr. Arthur W. Coats, associate 
Curticgie Endowment for International Peace: 

Dr. James T. Shotwell, consultant 

Mr. George A. Finch, associate 
Catholic Association for International Peace: 

Mr. Thomas H. Mahony, consultant 

Miss Catherine Schaeffer, associate 

Father R. A. McGowan, associate 
Chamber of Commerce of the United States: 

Mtu Harper Sibley, consultant 

Mr. Benjamin H. Namm, associate 



APRIL 22, 1945 



725 



Church Peace Union: 

Mr. Henry Atkinson, consultant 

Miss Margaret Forsyth, associate 

Miss Dorottiy McConnell, associate 
Congress of Industrial Organization*: 

Mr. Pliilip Murray, consultant 

Mr. James Carey, associate 

Miss Molly Lynch, associate 
Council on Foreign Relations: 

Mr. Thomas K. Finletter, consultant 
Disabled American Veterans of the M'orld War: 

Mr. Milton D. Cohn, consultant 

Mr. Vivian D. Corbley, associate 
Fanners Union: 

Mr. James G. Patton, consultant 
Federal Council of Churches of Christ in Aynerica: 

Dr. Walter Van Kirk, consultant 

Mr. O. Frederick Nolde, associate 

Bishop James C. Baker, associate 
Foreign Policy Association: 

General Frank McCoy, consultant 

Mrs. Vera M. Dean, associate 

Mr. W. W. Lancaster, associate 
General Federation of Women's Clubs: 

Mrs. LaFell Dickinson, consultant 

Mrs. William Dick Sporborg, associate 

Mrs. Earl Shoesmith, associate 
Kiwanis International: 

Mr. Donald B. Rice, consultant 

Mr. Harley Magee, associate 
Lions International: 

Mr. D. A. Skeen, consultant 

Mr. Melvin Jones, associate. 

Mr. Fred Smith, associate 
National Association for the Advancement of Colored 
People: 

Mr. Walter White, con.sultant 

Mr. "W. E. B. DuBois, associate 

Mrs. Mary McLeod Bethune, associate 
National Association of Manufacturers: 

Mr. Robert M. Gaylord, con.sultant 

Mr. Hugh O'Connor, associate 

Mr. W. W. Cumberland, associate 
National Catholic Welfare Conference: 

Mr. Richard Pattee, consultant 
National Congress of Parents and Teachers: 

Mrs. William A. Hastings, consultant 
National Council of Farmer Cooperatives: 

Mr. Homer L. Brinkley, consultant 

Mr. Earl W. Benjamin, associate 

Mr. C. O. Teague, associate 
National Education Association: 

Dr. William G. Carr, consultant 

Mr. Ben Cherrington, associate 
National Exchange Clui: 

Mr. A. Brooks Berlin, consultant 
National Federation of Business and Professional Women'* 
Clubs, Inc.: 

Miss Margaret Hickey, consultant 

Miss Josephine Schain, associate 
National Foreign Trade Council: 

Mr. Eugene P. Thomas, consultant 



Mr. Henry P. Grady, associate 

Mr. John Abbink, as.sociate 
National Orange: 

Mr. Albert Goss, consultant 

Mr. George Sehlmeyer, associate 
National Laio'jers Ouild: 

Mr. Robert W. Kenny, consultant 

Mr. Martin Popper, associate 
National League of Women Voter*: 

Mrs. William Johnson, consultant 

Mrs. George H. Engels, associate 

Mrs. Anne Hartwell Johnstone, associate 
National Peace Conference: 

Miss Jane Evans, consultant 

Dr. John Paul Jones, associate 

Mr. Richard Wood, associate 
Railioay Labor Executives Association: 

Mr. Charles J. MacGowan, consultant 
Rotary International: 

Mr. Richard H. Wells, consultant 

Mr. Philip Lovejoy, associate 
Women's Action Committee for Victory and Lasting 
Peace: 

Miss Lillian M. Phillips, consultant 

Mrs. Arthur Brin, associate 

Mrs. George Fielding Eliot, associate 
Veterans of Foreign Wars of the United States: 

Mr. Louis G. Starr, consultant 

Mr. L. G. Taggart, associate 

Judge Frederick M. Miller, associate 



Soviet Request To Invite 
Provisional Government in 
Warsaw to Conference 

Statement by THE DEPARTMENT OF STATE 

[Released to the press April 19] 

The note which has been received from the So- 
viet Government reiterates the Soviet request that 
the present Provisional Government now function- 
ing in Warsaw be invited to send representatives 
to tlie Conference at San Francisco. Poland is a 
member of the United Nations and of right should 
be at San Francisco. However, the view of the 
United States Govermnent remains that an invita- 
tion to the Conference at San Francisco should be 
extended only to a new Provisional Government 
of National Unity formed in accordance with the 
Crimea agreement.^ 



• BuixETiN of Dec. 24, 1944, p. 836 ; Feb. 18, 1945, p. 215; 
and Apr. S, 1945, p. 606. 



726 



DEPARTMENT OF STATE BULLETIN 



Exchange of Letters Between Cordell Hull' and the 

Secretary of State 



[Released to the press April 22] 

United States Naval Hospital, 

Bethesda, Maryland, 
ApHl 20, 191,5. 
Mt Dear Mr. Secbetart : 

With utmost regret, I find it necessary to in- 
form you thiit, in the opiniou of my physicians, it 
will be inadvisable for me to be present in San 
Francisco at the opening of the United Nations 
Conference on International Organization. I 
hope, however, that my health may in the near 
future permit a trip to San Francisco and my at- 
tendance at a later stage of the Conference. 

I regard this meeting of the United Nations as 
one of the great turning points in history. The 
decisions made there will guide the destinies of the 
human race for generations to come. 

Grim memories of three tragic decades will 
hover over the San Francisco Conference. There 
will be memories of a world in flames in 1914-18 
and of high hopes, on the morrow of that holo- 
caust, for an enduring peace and for a revitaliza- 
tion of human freedom. There will be memories 
of those hopes all too soon betrayed and shattered 
by selfishness and blindness and a disastrous low- 
ering of moral standards in relations among na- 
tions. There will be memories of the rise of new 
tyrants aspiring to world conquest and domina- 
tion, and of supine inaction of peace-loving na- 
tions in the face of new mortal dangers to liberty 
and peace. And there will be memories of a world 
again in flames, more intense, more widespread, 
more sweepingly destructive than ever before of 
every precious heritage of civilized man. 

Out of all these searing memories there must be 
forged in each and every one of us a new resolve 
that such things must not again come to pass. AVe 
of this day and age are offered an opportunity 
which, once lost, may never recur. It is an op- 
portunity to build for ourselves and for the future 
generations a structure of international relations 
that will, at long last, give humanity a tangible 



'Mr. Hull Is member of and senior adviser to the 
United States Delegation to the Conference. 



hope of enduring peace, of confidence born of se- 
curity, of material and spiritual advancement un- 
interrupted by barbaric eruptions of ever more 
destructive wars. 

That structure must be built upon the founda- 
tions of law, justice and fair dealing, of constant 
alertness to danger, of cooperative effort in sup- 
port of peace and securit}' and freedom and 
progress, of willingness to compose differences by 
jieaceful adjustment, of readiness to use force, if 
necessary, for the maintenance of peace. Only as 
that structure is built now, only as it is tended and 
strengthened through the years to come, will the 
tragic memories of the past be eliaced, the untold 
sacrifices of two world wars be vindicated, and 
hope for the future be kindled in triumph. 

The creation of that structure is a common in- 
terest of all peace-loving nations, fundamental to 
their very survival as free nations. There are no 
differences or difficulties between and among them 
that cannot be resolved within its framework. 

What happens at San Francisco will be an acid 
test of whether mankind has suffered enough and 
has learned enough to have acquired the vision 
and the resolution to build a structure of organized 
international relations, through which order under 
law can be established and maintained. 

I have profound faith that, whatever the dif- 
ficulties, the labors of the Conference will be 
crowned with success. I shall follow its work 
from afar with absorbing interest. So far as my 
strength may permit, I shall endeavor to make 
whatever contribution I can to its successful out- 
come. 

I shall be most grateful if you would be kind 
enough to convey to my colleagues on the United 
States Delegation and to the delegations of all par- 
ticipating nations my best wishes and my fervent 
hope that I may still be able to join their ranks in 
person as I shall ever be in spirit. 
Sincerely yours, 

Cordell Hull 

The Honorable 
Edward R. Stettinius, Jr., 
Secretary of State 



APRIL 22, 1945 



727 



April 21, 1945 
Dear Mr. Huij., 

On behalf of the United States Delegation to 
the United Nations Conference on International 
Organization I wish to thank yon for your inspir- 
ing letter of April 20 and to express to you our 
great disaiDpointment that you will not be with us 
in San Francisco at the opening of the Conference. 
All of us have every hope that you will be able to 
join us at San Francisco later on. 

In the meantime I shall keep in constant touch 
with you and will be counting on your guidance 
throughout these important deliberations. I know 



I am speaking for each United States delegate in 
saying that we approach with great humility our 
tasks at this Conference of United Nations, which 
you so justly describe as "one of the great turning 
points in history". I believe that all of the dele- 
gates from the United Nations, who are already as- 
sembling in San Francisco, feel this deep sense of 
responsibility and I share your faith that we will 
be successful in this great undertaking. 
Faithfully yours, 

Edward R. Stettinius, Jr. 
The Honorable 

CORDELL HCTLL 



The San Francisco Conference 



Address by ASSISTANT SECRETARY HOLMES' 



[Released to the press April 20] 

Meeting with you here tonight has a double 
significance for me. The first is that this is my 
part of the country. I feel that I'm coming home 
when I get back to the Middle West. And feeling 
at home here, it is easy for me to speak in the 
direct terms that I prefer, and with the frankness 
that is characteristic of our people of this part 
of the country. 

The second significant point transcends any 
personal satisfaction. It is the fact that this 
meeting tonight climaxes the observance of Dum- 
barton Oaks Week in Milwaukee. For the past 
days you have concentrated your attention on the 
Dumbarton Oaks Proposals for an international 
organization to promote world peace and security. 
The fact that you have done so means, above all 
else, that you realize how great is our stake in in- 
ternational affairs, how completely our ^Jeace and 
prosperity is interwoven with the peace and pros- 
perity of other nations. 

Ladies and gentlemen, I do not hesitate to say 
to you that it is high time we all realize this fact. 
Two wars are ample proof that we cannot remain 
apart from the rest of the world. 

This second World War which we are still fight- 
ing today has been and is terrible beyond man's 
worst imaginings of warfare. As we come closer 
and closer to final victory, we gain increasing 
knowledge of the price we and the world must 
pay for that victory. I have myself seen a part 
of that price paid in Tunisia, in Sicily and Italy, 

641410 — 45 2 



and in France, during my 27 months overseas as 
a member of General Eisenhower's staff. If there 
ever was any glamor to war, there is none today. 
It is a hellish, soul-searing business. It is full of 
pain and suffering and death. It brings destruc- 
tion and ruin to the peoples who dwell in its path. 
If wars continue in the future, they will mean the 
end of civilization as we know it. 

And so, when I was called back from the Army 
to take my present place as an Assistant Secretary 
of State, I did so not as a civilian, but as would any 
soldier given another wartime assignment. And 
it is as that soldier that I speak to you tonight. 
Your duty, and my duty, now is to see to it that 
we build a peace that will last, and one that will 
justify the incredible sacrifices made by the men 
at close grips with the enemy. I can tell you 
categorically and from my own exjierience that 
our men overseas are determined that it shall not 
happen again. They have fought, and many of 
them have died, in the belief that in winning this 
war we shall also ^vin the peace to follow. They 
are busy winning the war. They look to you and 
me to take the first steps to gain that other goal 
of a lasting peace. 

Tonight many nations of the world still mourn 
with us the recent and tragic death of our great 



' Delivered before the Milwaukee Joint Committee on 
Dumbarton Oalis Week, sponsored b.v the Council for a 
Lasting Peace and the United Nations Committee, in Mil- 
waukee, Wis., on Apr. 20, 1945. The address was broad- 
ca.st from Milwaukee. 



728 

leader and friend, President Roosevelt. We could 
pay no more fitting tribute to his memory than by 
bringing complete unity of purpose to these pri- 
mary aims for which he had so worked and 
planned — winning the war and building the peace. 

The very fact that you are meeting here tonight 
shows how deeply you are aware of your responsi- 
bilities in this job of building the peace. For it is 
not the job of the President alone, nor of the Sec- 
retary of State, nor of those of us who work 
directly with them. It is the job of all of us, and 
your job and your neighbors'. It is the job of all 
nations and all peoples who know, as we know, 
that victory in this war will mean nothing but loss 
and heartbreak and continued turmoil unless we 
band ourselves together to work for peace and 
security as we have fought for freedom from 
tyranny and aggression. 

The people of America have indicated in an 
overwhelming majority their desire for an inter- 
national organization designed to secure for us, 
and our children, the kind of decent world we all 
desire. With few dissenting voices, they have 
stated their determination that this Nation shall 
adhere to the underlying principles so ably ex- 
pressed by President Roosevelt in his last, unde- 
livered speech, written only the night before he 
died: 

"We seek peace — enduring peace. More than 
an end to war, we want an end to the beginnings of 
all war— yes, an end to these brutal, inhuman, and 
thoroughly impractical methods of settling the 
differences between governments. . . . But the 
mere conquest of our enemies is not enough. We 
must go on to do all in our power to conquer the 
doubts and the fears, the ignorance and the gi-eed, 
which made this horror possible. . . . Today, we 
are faced with the preeminent fact that, if civiliza- 
tion is to survive, we must cultivate the science of 
human relationships— the ability of all peoples, of 
all kinds, to live together and work together, in 
the same world, at peace. . . . The only limit 
to our realization .of tomorrow will be our doubts 
of today. Let us move forward with strong and 
active faith." 

We have lost a great leader, but in his successor 
we have a man who stands firmly behind the prin- 
ciples of international cooperation enunciated by 
Franklin D. Roosevelt. In his foreign-policy talk 
to Congress on April 16, President Truman said: 
"If wars in the future are to be prevented, the 



DEPARTMENT OF STATE BULLETIN 

peace-loving nations must be united in their de- 
termination to keep the peace under law. The 
breaking of the peace anywhere is the concern of 
peace-loving nations everywhere. 

"Xothing is more essential to the future peace 
of the world than continued cooperation of the 
nations which had to muster the force necessary 
to defeat the conspiracy of the Fascist powei-s to 
dominate the world." 

That is a crystal-clear statement of our beliefs 
and our wishes. The outlines of what we want are 
simple. We want an organization of the peace- 
loving nations of the world, pledged to stamp out 
aggression at its source, and to work together to 
promote social, economic, and humanitarian prog- 
ress. The Dumbarton Oaks Proposals offer us a 
starting-point, in my opinion an amazingly good 
starting-point. I do not propose to give you an- 
other explanation of them tonight. Able speak- 
ers have already done so. You yourselves have 
read the Proposals. You know the kind of inter- 
national organization machinery they outline. 

But now we are ready to go a long step farther. 
In less than a week, we face the opening date of 
one of the greatest and most significant confer- 
ences in world history — the United Nations Con- 
ference in San Francisco. The delegates to that 
Conference will come together to draw up the ac- 
tual charter for an international organization 
along the general lines of the Dumbarton Oaks 
Proposals. 

We know what we want, and the delegates of the 
other United Nations know what they want. The 
only differences are in degree and in execution. 
But we must not delude ourselves into believing 
that the Conference will have all smooth sailing. 
It must of necessity run into snags — divergences 
of viewpoint, and national interest and even dif- 
ferences of temperament among the delegates must 
be reckoned with. All these things are natural; 
nothing else could be expected with representa- 
tives of 46 different nations attending. What we 
must not do is to let any temporary set-back throw 
us off our main course. The differences will be 
ironed out; adjustments and compromise will be 
made, for every nation attending has the same 
"passion for peace" that we have. 

So there is one question that is of primary im- 
portance now, today, as it will be in San Francisco : 
Are we going to work toward the large aim, or are 
we going to hold out for the small points? We 
can't afford to slough off that question. It may 



APRIL 22. 1945 



729 



mean the success or the failure of all our efforts 
towards international organization. Now above 
all times we cannot afford to look so closely at the 
trees that we fail to see the forest. 

Drafting that charter at San Francisco is a 
tremendous order of business. No one nation is 
going to "carry the meeting". If we or any other 
nation were to go to San Francisco with that idea, 
the Conference would be doomed from the start. 
We might as well, in that event, start preparing 
for the next war before our victory is final in the 
war we are fighting today. 

I spoke a moment ago of the fact that we Ameri- 
cans have indicated in overwhelming majority 
that we want this kind of international organiza- 
tion. The Dei^artment of State receives several 
thousand letters a week from American citizens in 
all walks of life, the majority of them concerned 
with the Dumbarton Oaks Proposals and the com- 
ing Conference. I would like to read to you a few 
pai'agraphs of one of these letters — one that I re- 
ceived last week from an old f i"iend in Kansas. 

"Because I feel that I know you, I am going 
to take the liberty of urging that the State De- 
partment continue and expand its policy of taking 
the people — us folks at the grass roots — into its 
confidence — as far as compatible with common 
sense. . . . 

"The time is short. Keconstruction is already on 
us. There is much confusion, much idealism, but 
little realism about foreign affairs. As you have 
said, American foreign policy to be vital must 
have the backing of the people. . . . We are 
deluged with the printed page and the spoken 
words of commentators speaking from second or 
third hand — or from no hand at all. We want to 



hear from you people in the State Department 
who are at grips first hand with international 
reality. The sooner we hear, the better." 

Well, that's exactly what we intend to do — what 
we are trying to do — to let the people know. There 
must be nothing hush-hush about this Nation's for- 
eign policy. From all over the country men and 
women have asked us for information on matters 
of foreign affairs and international relations. We 
have tried to fill those requests to the limit of our 
ability. 

Certainly closet diplomacy is not necessary or 
even practical when it comes to this vital question 
of intei'national organization. Your groups and 
organizations, and you individual citizens of the 
United States, have asked us to talk to you about it. 
We have answered thousands of requests for 
printed material on the subject. We have gone be- 
foi-e the microphone to give you frank and open 
discussions of this question and other matters re- 
lated to it. The people of this country have lis- 
tened, and asked for more. 

We are going to keep this up because we believe 
that it is right, because we believe in your interest 
and your concern. We are going to keep it up 
because the foreign policy of the United States is 
not just of this Government: it is of the people. 
We are going to keep it up because participation 
by this country in an international organization 
to promote peace and security will be — remember 
our heritage of democracy — participation by the 
American people themselves. 

And we are not going to stop doing it unless the 
people of the United States themselves tell us to 
stop ! 



Announcement of Various Foreign Delegations' 



[Released to the press April 18] 

Canadian Delegation 

Prime Minister W. L. MacKenzie King has an- 
nounced that he will head the Canadian Delega- 
tion to the United Nations Conference on Inter- 
national Organization at San Francisco on April 
25 and that other delegates will be Senator James 
H. King. Liberal ; L. S. St. Laurent, Minister of 
Justice ; Gordon Graydon, Progressive Conserva- 



tive (Opposition) ; M. J. Coldwell, Cooperative 
Commonwealth Federation Leader; Mrs. Cora 
Casselman, Liberal ; and Senator Lucien Moraud, 
Conservative. In addition there are seven senior 
advisers to the Delegation: Norman Kobertson, 
Under Secretary of State for External Affairs; 
Hume Wrong, Associate Under Secretary of State 

" For other foreign delegations, see Bttllbtin of Apr. 
8, 1945, p. 609. 



730 



DEPARTMENT OF STATE BULLETIN 



for External Affairs; and the following Canadian 
Ambassadors: L. B. Pearson, Washington; Jean 
Desy, Rio de Janeiro; Dana Wilgress, Moscow; 
Warwick Chipman, Santiago, Chile; and General 
Maurice Pope, Military Adviser to the Prime Min- 
ister. 

Chilean Delegation 

Joaquin Fernandez Fernandez, Minister of For- 
eign Affairs of Chile, will be chairman of his coun- 
try's Delegation. The Chilean Ambassador to the 
United States, Marcial Mora, will be a member of 
the Delegation. 

Costa Rican Delegation 

The Costa Rican Delegation will be headed by 
Foreign Minister Julio Acosta Garcia and the 
following will be delegates: Alvaro Bonillalara, 
Minister of Finance and Commerce ; Francisco de 
P. Gutierrez, Ambassador to the United States; 
Luis Demetrio Tinoco Castro, ex-Minister of For- 
eign Affairs; Luis Anderson Morua, ex-Minister 
of Foreign Affairs ; Jose Rafael Oreamuno Flores ; 
Manuel Francisco Jimenez Ortiz; Julio Peiia 
Morua; Fabio Fournier Jimenez, Firet Secretary 
and Legal Adviser; and Fernando Soto Guardia, 
Second Secretary. 

CzechoslovaJc Delegation 

Jan Masaryk, Foreign Minister of Czechoslo- 
vakia, will head his country's Delegation, which in- 
cludes Jan Papanek, Ivan Krno, Josef Hanc, and 
Vaclav Benes. 

Ecuadoran Delegation 

Minister for Foreign Relations Camilo Ponce 
Enriquez will be president of the Ecuadoran 
Delegation. The following are delegates: Luis 
Eduardo Lasso, Minister of Economy ; Galo Plaza, 
Ambassador at Washington; Gonzalo Escudero 
Moscoso, Technical Adviser in the Foreign Office ; 
Neptali Ponce, Minister Counselor of Embassy at 
Washington; Carlos Tobar y Zeldumbide, Under 
Secretary of Foreign Relations. 

Salvadoran Delegation 

The Delegation of El Salvador will include Dr. 
Hector David Castro, Ambassador Designate to 
the United States, president of Delegation; Jose 
Antonio Quiros, second delegate ; and Carlos Leiva, 
third delegate. 



Iraq Delegation 

Iraq's Delegation will include Arshadal-Umri, 
Minister for Foreign Affairs; Xuri Pasha as-Said, 
Senator and ex-Prime Minister; Towfiqas-Su- 
waidi, Deputy and ex-Prime Minister; Ali Jawdat 
al-Ayubi, Minister to the United States and ex- 
Prime Minister; Nasratal-Farisi, Deputy and ex- 
Minister for Foreign Affairs; Fadhil Jamali, Di- 
rector General, Foreign Affairs, with rank of 
Minister. 

Luxembourg Delegation 

The Luxembourg Delegation will be headed by 
Minister of Foreign Affairs Joseph Bech, who will 
be joined by the Luxembourg Minister at Washing- 
ton, Hugues Le Gallais. 

Netherlands Delegation 

Dr. Eelco van Kleffens, Minister of Foreign 
Affairs, will be chairman of the Netherlands Dele- 
gation to S:in Francisco. Other members include 
Alexander Loudon, vice chairman of the Delega- 
tion and Netherlands Ambassador at Washington ; 
Leo Josephus Cornelis Beaufort, Father Didymus, 
O.F.]\I. ; Vice Admiral Conrad Emil Lambert 
Helfrich, Commander in Chief of all Netherlands 
forces in the Far East; Hubertus J. van Mook, 
Lieutenant Governor General of the Netherlands 
East Indies; Major General H. E. van Tricht, 
Military Attache to the Netherlands Legation at 
Bern, Switzerland. Assistant Delegates will be 
Adrian Pelt, head of the Netherlands Government 
Information Service in London ; J. H. van Royen, 
Special Assistant to the Minister of Foreign Af- 
fairs; Jonkheer H. L. F. K. van Vredenburch; 
Raden Mohamed Moesa Soerianatadjoemena, Per- 
sonal Assistant to the chairman; B. J. Slingen- 
berg, Attache of the Netherlands Embassy at 
Washington, secretary of the Delegation; Miss 
E. S. F. Vanalphen, Private Secretary to the For- 
eign Minister and assistant secretary of the Dele- 
gation. 

Nicaraguan Delegation 

The Nicaraguan Delegation will be headed by 
Dr. Mariano Argiiello Vargas, Foreign Minister, 
and includes Guillermo Sevilla Sacasa, Ambassa- 
dor at Washington, delegate; and Colonel Dr. 
Luis Manuel Debayle, Director General of Public 
Health, delegate. Colonel Guillermo Rivas 
Cuadra, Chief of the Nicaraguan Air Force, will 
accompany the Delegation as attache. Marcel 



APRIL 22, 1945 



731 



Jover will be press attache, and Alonso S. Peroles, 
Consul General, San Antonio, will also accom- 
pany the Delegation. 

Panamanian Deleffation 

The chairman of the Delegation from Panama 
will be Roberto Jimenez, Minister for Foreign 
Relations. The delegates will be Octavio Mendez 
Pereira, rector, Inter-American University, Pan- 
ama City; Juan R. Morales, lawyer, member of 
Renovador Political Party ; Abdiel J. Aries, con- 
sul, Pasadena, California ; and Ricardo J. Alf aro, 
former Ambassador to the United States. The 
technical adviser will be Mario de Diego, Chief of 
Protocol, Foreign Office. Gerardo L. Diaz, pub- 
lisher of Hechos, and Maximiliano Fabrega will 
be secretaries of the Delegation. 

Saudi Arabian Delegation 

His Royal Highness, Amir Faisal ibn Abdul 
Aziz al Saud, Viceroy of the Hejaz and Foreign 
Minister of Saudi Arabia will be chief of his 
Delegation, assisted by Shaikh Hafiz Wahba, Min- 
ister at London ; Shaikh Assad al Faqih, Minister 
at Baghdad ; Shaikh Ibrahim Suleiman, Chief of 
Amir Faisal's Personal Cabinet; and Shaikh 
Salih al Abbad will be assistant and accountant. 

South Afncan Delegation 

The Department announced on March 30^ that 
Field Marshal Jan Christian Smuts would head 
the South African Delegation to the San Francisco 
conference. Other members of the Delegation 
include D. D. Forsyth, Secretary for External 
Affairs; H. T. Andrews, Chief of the South Afri- 
can Government Supply Mission, Washington; 
R. Jones, Acting Accredited Representative for 
the Union of South Africa, Ottawa; J. R. Jor- 
daan. Secretary to the Union Legation, Washing- 
ton; D. L. Smit, Secretary for Native Ailairs; 
L. E. Orkin, official of the Labor Department. 
H. M. Moolman, Director of the South African 
Government Information Office, Washington, will 
be pi'ess-relations officer, and T. Hewitson, Vice 
Consul, New York, will be secretary. 

Turkish Delegation 

The Turkish Delegation will be headed by 
Hasan Saka, Minister for Foreign Affairs, and the 
secretary general of the Delegation will be Sureyya 
Anderiman, Columbia University graduate and 
Confidential Secretary to the President. Dele- 
gates include Huseyin Ragip Baydur, Ambassador 



Designate at Washington ; Feridun Cemal Erkin, 
Assistant Secretary General of the Foreign Office ; 
and Hni Zamettin Erenel, First Secretary of Em- 
bassy. Advisers to the Delegation will be Cemil 
Bilsel, former director of the University of Istan- 
bul and Deputy from Samsun ; A. Sukrru Esmer, 
Columbia University graduate, journalist and 
Deputy from Istanbul; H. Atif Kuyucak, Secre- 
tary General of the Bureau of Coordination and 
Deputy from Zonguldak; Sinasi Devrin, graduate 
of the School of Political Science in Paris and 
Deputy from Zonguldak; Nihad Erim, professor 
of the School of Political Science and Adminis- 
tration in Ankara and Legal Adviser to the For- 
eign Office; A. Zeke Polaw, Director General of 
the Fii-st Department of the Foreign Office; Sadi 
Kavur, Confidential Secretary to Minister for For- 
eign Affairs. The head of press will be Falih 
Bifki Atay, publisher and editor of TJlus and 
Deputy from Ankara. In addition, the Delega- 
tion will include Hasa Nurelgin, Assistant Di- 
rector General of the First Department of the 
Foreign Office ; Nizamoddin Erenel, Assistant Di- 
rector General of the Department of Commerce 
and Economy of the Foreign Office; Oi'han Tah- 
sinn Gunden, Director of Section of the Foreign 
Office; Sinasizsiber, editor and translator in the 
Foreign Office; Lt. Col. Huseyin Ataman and Lt. 
Col. Tekin Ariburun, former Air Attache in Wash- 
ington, the latter two being representatives of the 
Mmister of National Defense on behalf of the 
General Staff. 

Uruguayan Delegation 

The Uruguayan Delegation is as follows : chair- 
man, Foreign Minister Jose Serrato ; delegate and 
alternate chairman, Jacobo D. Varela; delegates, 
Ambassador Juan Carlos Blanco, Ambassador Ro- 
berto E. MacEachen, Senator Cesar Charlone, 
Senator Cyro Giambruno, Senator Dardo Regules, 
Deputy Juan F. Guichon, and Deputy Hector 
Payese Reyes; Minister attached to Delegation, 
Luis Guillot; advisers, Minister Jose A. Mora 
Otero, Minister Alfredo Carbonell Debali. The 
secretary general will be Vicente Mora Rodriguez; 
Jorge Barreiro will be secretary. 

Venezuelan Delegation 

Minister of Foreign Relations Caracciolo Parra 
Pei-ez will be chairman of the Venezuelan Delega- 
tion. 



'■ Bulletin of Apr. 1, 1945, p. 577. 



732 



DEPARTMENT OF STATE BULLETIN 



^The Climate of Peace'' 



By 
RIARION PARKS 1 



AMONG MANT NOTEWORTHY Espects of the Inter- 
American Conference on Problems of "War 
and Peace, held in Mexico City February 21 to 
March 8, 1945, none was more striking than the 
emphasis placed on matters of social welfare and 
human liberty as factors in the prevention of war 
and the preservation of peace. 

Social questions have been the subject of resolu- 
tions in one form or another in every inter- Ameri- 
can meeting since the first was held in 1889, but in 
no other conference have these considerations 
loomed so large as they did at Mexico City. This 
unusual emphasis is significant of the course that 
our international relations have taken during re- 
cent years, and it can be expected to be a factor of 
major importance in the future development of 
American foreign policy. An examination of the 
Mexico City pronouncements on social matters 
shows that the American republics believe that the 
preservation of peace will depend in great measure 
upon achieving social stability through economic 
justice. It also reveals what the countries of this 
hemisphere will expect and will ask of the United 
States in the way of leadership, cooperation, or 
assistance toward accomplishing these ends. 

The Conference at Mexico City adopted state- 
ments of principle along three main lines: (1) 
strengthening of the existing provisions for de- 
fense of the hemisphere against aggressive action 
originating either inside or outside of this conti- 
nent; (2) strengthening of the inter-American sys- 
tem along all lines, economic, social, and cultural, 
to the end of further increasing inter-American 
understanding and making inter-American co- 
operation more effective;^ and (3) establishment 
of international economic collaboration designed 
to create what the Secretary of State has called, 

' Miss Parks is a divisional assistant in the Division of 
American Republics Analysis and Liaison, Office of Amer- 
ican Republic Affairs, Department of State. 

" For article on the Inter-American System by Dana G. 
Munro see Bulletin of Apr. 1, 1045, p. 525, 



"the climate of peace", compounded of economic 
security, rising standards of living, and freedom. 

In all categories of its discussions and pro- 
nouncements the Mexico City conference made ref- 
erence to social considerations. One of the six 
major declarations incorporated into the Final Act 
was an unprecedented ''Declaration of Social Prin- 
ciples of America". Among new duties entrusted 
to the Pan American Union by another provision 
of the Conference will be the general supervision 
of a new inter- American agency : the Inter- Amer- 
ican Economic and Social Council. This Agency 
will replace the emergency Inter- American Finan- 
cial and Economic Advisory Committee which was 
established by the Meeting of F'oreign Ministers in 
1939. It is charged with the responsibility of pro- 
moting social progress and of raising the standard 
of living of all the American peoples. Various 
additional resolutions and recommendations re- 
ferred to the essential rights of man, to health and 
labor protection, and important social principles 
were defined in the "Economic Charter of the 
Americas" and in other pronouncements on eco- 
nomic subjects. 

The Council is empowered to undertake appro- 
priate studies and activities, on its own initiative 
or at the request of any American government, and 
to collect and prepare reports on economic and 
social subjects for the use of the American repub- 
lics. It will be given provisional organization by 
the Governing Board of the Pan American Union 
and will be permanently organized by the Ninth 
International Conference of American States. It 
is to maintain liaison with the corresponding organ 
of the general international Organization when 
established, as well as with specialized interna- 
tional agencies in its field. 

Ideals, often a far reach beyond the present 
grasp of any country, are necessarily the sub- 
stance of all social resolutions. The delegates at 
Mexico City fully recognized as they framed and 
signed the Final Act that a gi-eat deal of time and 
effort will be required to bring about effective im- 
plementation throughout the hemisphere even of 



APRIL 22, 1945 

those resolutions calling for action by the several 
governments on such obviously desirable matters 
as the combating of disease, poverty, malnutrition, 
and ignorance. They recognized also that a vicious 
circle of low standards of living and meager 
opportunities in home and community, attribut- 
able to various economic factors, will have to be 
broken in many countries, including some parts of 
the United States, before conditions of poverty and 
ignorance can be overcome. 

However, practical programs have been made in 
the field of social betterment in the American re- 
publics in recent years. Good beginnings, with 
strong foundations in many lines, particularly 
health research and improvement and labor legis- 
lation, have been established in many of the other 
American republics. In the writing of new consti- 
tutions during the past few months, the legislators 
of Ecuador and Guatemala have shown a great 
deal of idealism and ambition to establish govern- 
mental responsibility and to supply the basic law 
for progressive social-improvement programs in 
those countries. The Mexican Government's far- 
reaching campaign to combat illiteracy in that 
country, begun this year under the personal direc- 
tive of President Avila Camacho, is a model of 
practical invention to meet the particular problems 
of that country so as to break down the national 
burden of ignorance rapidly and on a scale of 
endeavor never before contemplated among the 
backward elements of the population in the Latin 
American countries. A unique feature of the 
campaign is that every citizen who knows how to 
read and write is being asked by the government 
to teach these rudiments to an illiterate citizen. 
Anyone who has seen, in a small, remote Mexican 
town, the rapt interest with which a group of peo- 
ple in some corner of the market place listens to 
the reading of a newspaper by some companero 
who has mastered the art, will appreciate the po- 
tentialities, vast if not immediate, of such a pro- 
gram, wisely accommodated to the needs of the 
country and the capacity of its budget. 

Such demonstrations along lines of independent 
national endeavor can be matched by concrete ac- 
complishments of international cooperation which 
have resulted from the inter-American confer- 
ences. In these meetings, the agreement upon a 
statement of principles, the definition of the prob- 
lem in positive terms, have become accomplish- 
ments in themselves, for they provide the first, and 



733 

essential, foundation for action, while the weight 
of unanimity among the representatives of the 
several nations lends even to a commonly accepted 
principle a force to influence action that it would 
not otherwise possess. 

In this sense the attention given to social ques- 
tions at Mexico City is of more than ordinary sig- 
nificance because the Foreign Ministers and other 
distinguished officials who there represented the 
American nations participated as working dele- 
gates from the opening session until adjournment. 
The documents embraced in the Final Act ^ thus 
have an authoritative character, as emanating 
from the highest levels of 20 governments repre- 
sentative of the peoples of the Americas. 

Man Must Be the Center of Interest of Government 

The first article in the Declaration of Social 
Principles of America proclaims that "man must 
be the center of interest of all efforts of peoples and 
governments". This reaffirmation of the basic 
thesis of democracy, in which the state is under- 
stood to exist for the benefit and protection of the 
citizen, and which is embraced and expounded in 
all the American consttiutions in some form or an- 
other, was both appropriate and essential in con- 
sideration of the particular objectives of the 
Conference. It was appropriate, too, that a mod- 
ern international document restating this thesis 
should be developed and signed in Mexico, whose 
greatest figures throughout the national history 
have been and continue to be profoundly concerned 
with the theory and achievement of social justice. 

Wliat is more significant, as we approach the 
transcendental subject of world organization for 
peace, these declarations signalize the degree of 
understanding which has developed among the 
American peoples of the direct and important re- 
lation that social problems bear to the overshadow- 
ing problems of war and peace. 

In the addresses with which he opened and closed 
the Conference, Dr. Ezequiel Padilla, Mexico's 
Foreign Minister, emphasized the responsibility 
of the Conference to take cognizance of the social 
and social-economic factors which underlie inter- 
national discord and which are fundamental 
to the conservation and future development of 
inter-American solidarity, understanding, pros- 
perity, and peace. He set the tone of social re- 
sponsibility subsequently expressed in the acts of 

' The Pan American Union has issued the oflBcial English 
translation of the Final Act signed at Mexico City. 



734 



DEPARTMENT OF STATE BULLETIN 



the Conference with his initial words by saying: 
"What does America expect from this Conference? 
The first thing it expects is practical resolutions 
which will alleviate the misery, the abandonment, 
and the defenselessness of our masses; resolutions 
which will satisfy the deep desire for permanent 
security and a peace based on justice for all our 
peoples. If we are to emerge from this Confer- 
ence more united than ever, it must be because we 
understand how to ennoble our solidarity in war, 
which has been consecrated by the devotion to lib- 
erty and the resolute attitudes of our peoples, pro- 
jecting it into a solidarity in peace which will re- 
gard poverty, social insecurity, malnutrition, and 
unemployment wherever these things occur 
throughout the extent of America — in the depths 
of the Amazon or the mines of Bolivia, in the plan- 
tations of Honduras or the plains of Venezuela 
[and he might properly have added some regions 
of the United States] — as iniquities which are a 
blot not only upon the countries which suffer them 
but likewise upon the dignity of America as a 
whole. . . . 

"If democracy is not an imposture it must offer 
security of work, fair wages, decent homes for the 
people; it must construct schools, hospitals, gar- 
dens, but above all, what is characteristic of de- 
mocracy, it must guarantee economic security, not 
in terms of dictatorsliip and slavery but on the 
bases of true liberty, abundance, fair distribution, 
social justice, and authentic liberties. . . ." 

The Secretary of State referred to the same 
theme in his first address to the Conference. "The 
United States", he said, "intends to propose and 
support measures for closer cooperation among us 
in public health, nutrition, and food supply, labor, 
education, science, freedom of information, trans- 
portation, and in economic development. . . ."* 
Regarding the future world Organization for 
peace, the Secretary has said : "A major task of the 
world Organization will be the establishment of 
those economic and social conditions which make 
for peace. Economic rivalries, poverty, and op- 
pression breed wars. Economic security, rising 
standards of living, and freedom are the climate of 
peace." ^ 

In a later plenary session of the Mexico City 
conference, Dr. Jacobo Varela, former Foreign 
Minister and Delegate of Uruguay, referred to the 

* Bulletin of Feb. 25, 1945, p. 277. 
'Bulletin of Apr. 8, 1945, p. 623. 



writing of the American Declaration of Inde- 
pendence by Thomas Jefferson, and bespoke the 
Conference's use of the opportunity before it to 
propound a "New Declaration of the Rights of 
Men and Women". As elements which miglit be 
incorporated in it, he defined 10 points of social 
justice which his country "strives to grant to its 
inhabitants and is ready to defend in the vaster 
arena" of the Americas. Many of these points 
were incorporated in the subsequent social resolu- 
tions of the Conference. They are : 

1. The right to useful and creative labor, at the 
age of efficiency. 

2. The right to fair pay in return for work or 
ideas. 

3. The right to decent food, clothing, shelter, 
and medical care. 

4. The right to security, free of fear, in old age, 
unemployment, or illness. 

5. The right to live under a democratic sys- 
tem, free of irresponsible private power or arbi- 
trary public authority. 

6. The right to go and come, to talk or to remain 
silent, without fear of espionage. 

7. Tlie right to equality before the law and free 
access to justice. 

8. The right to education, which prepares for 
citizenship, work, and the defense of a man's own 
interests. 

9. The I'ight to rest and recreation, and the right 
to take part in a progressive civilization. 

10. The right to defend the Americas. 

Commission on Post-War Econoinic 
and Social Problems 

To deal with the social subjects before it the 
Conference established a Commission on Post-War 
Economic and Social Problems, and two subcom- 
mittees, including one on social questions. Out- 
standing leadership was given by the chairman of 
the Committee on Social Questions, Dr. Joao 
Carlos Vital of the Department of Labor of Brazil, 
and the committee reporter, Senor Victor An- 
drade. Ambassador from Bolivia to the United 
States. Valuable and constructive contributions 
were made by the representatives of Chile, Cuba, 
the Dominican Republic, Honduras, and Peru, and 
by Miss Katherine F. Lenroot, Chief of the Chil- 
di-en's Bureau of the United States Department of 
Labor. The Charter for Women and Children 
adopted by the Conference was based on a draft 



APRIL 22, 1945 



735 



prepared by Senora Amalia de Castillo Ledon, 
who represented the women of Mexico in that 
country's Delegation.* 

More than a dozen resolutions and recommenda- 
tions related to and amplifying the fundamental 
statement contained in the Declaration of Social 
Principles of America, dealing with the rights and 
needs of man as human entity, worker, and citizen, 
were incorporated into the Final Act of the his- 
toric Mexico City meeting. Among them were the 
recommendation on free access to information, res- 
olutions on the international protection of the 
essential rights of man, on prevention of unem- 
ployment, and against racial discrimination, rec- 
ommendations on international cooperation for 
the promotion of health security, and a charter for 
women and children. Forward-looking pro- 
nouncements on labor rights and the achievement 
of rising standards of living were written into the 
Economic Charter of the Americas, adopted by 
the Conference. 

The "Vital Resources of America" 

Dr. Vital of Brazil deserves a very large meas- 
ure of credit for the Declaration of Social Prin- 
ciples. The document was prepared by the 
commission under his chairmanship. The declara- 
tion takes cognizance of the necessity of protect- 
ing, as vital resources of America, the health, 
intelligence, character, and economic and social 
opportunity of the American peoples, just as the 
material resources of the nations must be safe- 
guarded by adequate internal and international 
provisions of law. 

Opening with the statement that "one of the 
essential objectives of the future international or- 
ganization is that of obtaining international coop- 
eration in the solution of social problems, directed 
toward the improvement of the material conditions 
of the working classes of all countries", the Decla- 
ration calls on the American governments to ratify 
and incorporate effectively into the life of their 
peoples the principles already adopted by various 
International Labor Conferences, to develop inte- 
grated programs of social security, and to estab- 
lish a flexible minimum wage in order to protect 
and increase the purchasing power of the worker 
in accordance with changing conditions. 

The declaration proclaims the determination of 
the nations of this continent to "encourage the 

641410 — 4B 3 



vital, economic, moral and social rehabilitation of 
the American peoples, evaluating them as human 
beings, increasing their capacity to work and 
broadening their consuming power, in order that 
they may enjoy a life that is better, happier and 
more useful to humanity". 

It deals with the duties of governments with 
regard to maintaining humane labor conditions; 
protecting the family as a social unit ; combating 
and overcoming poverty, malnutrition, sickness, 
and ignorance; supervising and aiding social and 
economic initiative by encouraging private action 
in the promotion of education, public health, social 
assistance and welfare ; assuring general access to 
the articles essential to life, such as adequate food, 
healthful housing and clothing; assuring labor 
conditions and compensation which will guarantee 
the well-being and prerogatives essential to human 
dignity. 

The declaration recommends to the American 
governments the adoption of comprehensive social 
and labor legislation, on a scale not lower than that 
established by the conventions and recommenda- 
tions of the International Labor Organization. 
Specific reference is made to provisions for mini- 
mum wages, maximum working hours, regulation 
of the work of women and minors, hygiene and 
industrial safety, maternity protection, and lia- 
bility-compensation insurance. The declaration 
postulates recognition of the right of workers to 
organize, the right of collective bargaining, and 
the right to strike. 

Particularly with regard to future social-secu- 
rity development, the declaration calls for inter- 
American cooperation. It recommends that all 
the American governments support the Permanent 
Inter-American Committee on Social Security cre- 
ated at Santiago, Chile, in 1942, and it recommends 
facilitation of interchange of information and 
technical services. 

Finally, the declaration reconamends that the 
Inter-American Juridical Committee be entrusted 
with the preparation of an "Inter- American Char- 
ter of Social Guarantees". This charter will be 
submitted for consideration and approval by the 
Ninth International Conference of American 
States, to be held at Bogota in 1946. 

'A special article on the part taken by women repre- 
sentatives in the Mexico City conference and the resolu- 
tions relating to women and children adopted there will 
appear In a later issue of the Bulletin. 



736 



Free Access to Information 



Of all the conference pronouncements dealing 
with the rights of man, that one on free access to 
information has received widest acclaim, partly, 
of course, because of the emphasis given it by the 
press.' In this declaration the Conference rec- 
ommended that the American republics recognize 
the essential obligation to guarantee their people 
free and impartial access to sources of informa- 
tion; that they withdraw censorship and press and 
radio control made necessary by the war at the 
earliest possible moment ; that they take measures 
to promote free exchange of information among 
their peoples ; and that they make every effort to 
establish the principle of free transmission and 
reception of information, through books, press, 
radio, or any other means, when the restoration of 
juridical order in the world is assured. 

These recommendations arise from the belief 
that the progress of mankind depends on the su- 
premacy of truth among men, that vigilance is 
necessary to assure a peace which will defend and 
protect the rights of all men everywhere, and that 
freedom of expression of thought is an essential 
condition to the development of an alert public 
opinion which will guard against any future at- 
tempt at aggression. 

Health Security 

The Conference gave special attention to the im- 
portance of health as well as social justice in the 
development of enlightened citizenship among the 
broad masses of population of the Americas. It 
declared that the obligations and rights of citi- 
zenship cannot be efficiently fulfilled when large 
parts of the population are ill, in precarious health, 
or undernourished; that stability and economic 
development require the strengthening of the vital 
forces of the American nations; and that the im- 
provement of public health, nutrition, and food 
supply constitutes an essential factor in raising 
the standards of living and increasing the produc- 
tivity of the American republics. These truths 
are well understood by the governments of the 
other American republics. Nutrition studies in 
this hemisphere have been proceeding for some 
time and current programs for the modernization 

' BuuLETiN of Mar. 18, 1945, p. 451. 

* For the economic aspects of the Conference, see article 
by H. Gerald Smith, Buijjctin of Apr. 8, 1945, p. 624. 

• BiTiXETiN of Apr. 8, 1945, p. 616. 



DEPARTMEf^T OF STATE BULLETIN 

of agricultural methods include plans for diversi- 
fication of food crops which will supplement the 
limited number of traditional crops of various 
regions, accompanied by the spreading of knowl- 
edge regarding the nutritional value of the new 
foods and the improvement of yield through bet- 
ter methods of plant selection and care. 

The Me.xico City resolutions give the added 
strength of inter-American endorsement to un- 
dertakings already in progress in individual coun- 
tries, while recommending that all of the American 
republics give preferential attention to public- 
health problems and intensify the mutual aid they 
have been giving in all pertinent aspects of public 
health. The Conference also recommended the 
continuance of the Pan American Sanitary Bu- 
reau as the general coordinating sanitary agency 
of the American governments, to be provided with 
adequate economic support and qualified personnel. 

The Economic Charter of the Americas 

In writing the Economic Charter of the Amer- 
icas, and related statements, the Mexico City 
conference fully demonstrated America's aware- 
ness of the necessity for providing a firm economic 
basis for political peace.* 

A statement by Edward S. Mason, deputy con- 
sultant to the United States Assistant Secretary 
of State for economic affairs, William L. Clayton, 
who also attended the Mexico City conference, 
very succinctly presents the background of thought 
which inspired the economic charter. "The 
yearning for peace and the desire for economic 
well-being", says Mr. Mason, "are the two most 
powerful forces which will shape the post-war 
world. The strength and universality of these 
ideas are rooted in the two central events of recent 
years — the greatest depression in modern times 
and the greatest war in history. . . . " ° The 
charter and other pronouncements of the Mexico 
City conference reflect the full truth of this esti- 
mate so far as the peoples of the American repub- 
lics are concerned. 

To prevent a recurrence of the stark tragedy of 
mass unemployment, the Conference recommended 
that the governments of the American nations 
draw up detailed plans, including public-work 
programs and other projects for productive pur- 
poses designed to prevent the unemployment 
of human and material resources, with all its in- 
jurious consequences. These plans are to be sub- 



APRIL 22, 1945 



737 



mitted to the Inter- American Technical Economic 
Conference, which will compose them into coordi- 
nated over-all proposals on an inter-American 
basis for minimizing fluctuations in economic 
activities. 

At the same time that the Conference entrusted 
this and similar responsibilities to the coming In- 
ter-American Technical Economic Conference, it 
supplemented the instruction with a social-respon- 
sibility clause, so to speak. In a special resolution 
on social questions, the Conference recommended 
that the Technical Economic Conference give spe- 
cial attention to questions of a social character, 
including methods of making effective the Confer- 
ence's resolutions on labor standards, social secu- 
rity, and social welfare. 

Social Aspects of the Economic Charter 

Finally, in the Economic Charter itself, which 
was second in importance only to the Declaration 
of Chapultepec among instruments of the Mex- 
ico City conference, the governments of the 
Americas were once again called upon to recog- 
nize and defend the rights of man, as they work 
for the material progress of the community, and 
attention is focused upon the significance of the 
individual in the development of national econ- 
omy. In the opening sentence the charter states 
that "the fundamental economic aspiration of the 
peoples of the Americas, in common with peoples 
everywhere, is to be able to exercise effectively their 



natural right to live decently, and work and ex- 
change goods productively, in peace and with se- 
curity." '" 

Further on the Economic Charter declares that 
"the basis of rising levels of living is f oimd ulti- 
mately in enabling the individual to reach his 
maximum productivity". To this end it calls for 
fair labor practices and recognition of labor's 
right to organize and bargain collectively as 
fundamental to enabling peoples to take their 
place in an expanding international commerce. In 
the concluding paragraphs of this great docu- 
ment, the American republics declare their guid- 
ing principles. The first of them is "To direct the 
economic policies of the American Republics to- 
ward the creation of conditions which will encour- 
age . . . the attainment everywhere of high 
levels of real income ... in order that their 
peoples may be adequately fed, housed, and 
clothed, have access to services necessary for health, 
education, and well-being, and enjoy the rewards 
of their labor in dignity and in freedom." 

This charter and the supplementary statements 
embodied in the Final Act of the Mexico City con- 
ference thus establish, perhaps more plainly and 
positively than ever before, the continuing ad- 
herence of the American republics to the basic 
tenets of their democratic philosophies and consti- 
tutions, and set forth the direction they intend to 
take in their endeavors to contribute to the estab- 
lishment of a lasting world peace. 



Notification by Germany Concerning Exchange 

Of Sick and Wounded Prisoners of War 



[Released to the press April 18] 

The War and State Departments announced on 
April 18 that on March 28 the German Govern- 
ment notified this Government through the Swiss 
Government that it could not undertake a fur- 
ther exchange of seriously sick and seriously 
wounded prisoners of war under the Geneva Pris- 
oners of War Convention until two months after 
the completion of the necessary arrangements. 
The German Government did not specify what it 
meant by "necessary arrangements". This notifica- 
tion was in reply to the proposals made by this 
Government on March 13 for a further exchange 
in Switzerland on April 25. The Swiss Govern- 
ment agreed to the use of its facilities for the pro- 



posed exchange and offered to make hospital trains 
available to transport the repatriates. 

This Government's proposals were in accord- 
ance with its policy of endeavoring to make ex- 
changes with Germany of sick and wounded pris- 
oners of war as continuous a process as possible. 
Five exchanges have taken place with Germany 
since the outbreak of the war. A total of 846 sick 
and wounded American prisoners of war were re- 
patriated in these operations. 

Further proposals will be made to Germany for 
an early exchange. 



" Bulletin of Mar. 4, 1945, p. 847. 



738 



DEPARTMENT OF STATE BULLETIN 



Bretton Woods: A Monetary Basis for Trade 



Addrett by ASSISTANT SECRETARY ACHESON ' 



IReleaaed to the press April 16] 

There are periods in the histor}' of mankind that 
are clearly marked for great achievement. The 
Renaissance was such a period ; the eighteenth cen- 
tury was another. To this generation has been 
given the opportunity to shape a world in which 
men will be freed from the scourge of war. 

The task before us is diflBcult. The world tried 
before and failed. We have learned from this 
failure that it is not enough to set up the political 
machinery for peace. We must also provide a 
sound economic foundation for enduring peace. 
Countries touch each other at innumerable points 
in their international economic relations. We 
must make sure that these international economic 
relations contribute to the well-being of all coun- 
tries, and that they do not become points of con- 
flict which endanger peace. 

The great difference in our second attempt to 
establish a peaceful world is the wide recognition 
that peace is possible only if countries work to- 
gether and prosper together. That is why the 
economic aspects are no less important than the 
political aspects of the peace. That is why the 
Secretary of State said in his Chicago speech : "The 
close cooperation of the United Nations in a pro- 
gram for economic reconstruction and expan- 
sion ... is fundamental to the success of the 
world Organization. Without it the world will be 
able neither to recover from the effects of this war 
nor to prevent the next war." ^ 

Bretton Woods is the United Nations program 
for international monetary and financial coopera- 
tion. It recognizes that the prompt reconstruction 
of devastated countries and the development of 
countries that lack the modern means of produc- 
tion are essential to the establishment of a peaceful 
world. It recognizes that expanded world trade is 
to the advantage of all countries and that this is 

' Delivered before the Economic Club of New York in 
New York, N. Y., on Apr. 16, 1945. 

' Bulletin of Apr. 8, 1945, pp. 599 and 616, and Apr. 1, 
1945, p. 578. See also "Conference at Bretton Woods 
Prepares Plans for International Finance" by John Parke 
Young, BciXETiN of Nov. 5, 1944, p. 539. 



possible only if we have an orderly monetary basis 
for trade. 

The Bretton Woods program grows out of the 
experience of the 1920's and the 1930's. After the 
last war there were serious monetary disorders, 
with many currencies disrupted and some cur- 
rencies completely destroyed. With considerable 
sacrifice, currencies were finally stabilized, some 
at the pre-war parity, others at a new parity, and 
still others through the establishment of a new 
monetary system. By 1929 all major currencies 
were back on the gold standard. This process of 
stabilization was undertaken imilaterally, each 
country determining its policy for itself. In some 
cases there were stabilization loans, and in other 
cases there were informal discussions among the 
heads of central banks. But the fact remains that 
each country regarded currency stabilization as its 
own exclusive business. 

What were the consequences of this method of 
dealing with international currency problems? 
Many currencies were overvalued and some were 
undervalued. In these countries exchange rates 
were not satisfactorily adjusted to changed eco- 
nomic conditions. ^Vhen depression came, the 
whole pattern of exchange rates became untenable. 
The raw-material countries like Argentina, Aus- 
tralia, and Brazil were compelled to depreciate 
their currencies in 1929. In 1931, Great Britain 
and the rest of the British Empire, nearly all of 
Europe, most of South America, and Japan were 
forced off gold. In 1934, the United States and 
the rest of Latin America devalued their cur- 
rencies. And finally, in 1935 and 1936, the coun- 
tries constituting the gold bloc were forced to 
abandon gold. 

If countries that departed from the gold stand- 
ard had cooperated to adjust their currencies to 
the proper level, the world might have been saved 
from economic disaster. Unfortunately, each 
country revalued its currency to suit its own in- 
terests, and there was a strong tendency toward 
competitive depreciation of currencies. Even 
worse, a number of countries used discriminatory 
currency devices — exchange control, multiple cur- 
rencies, bilateral clearing, and other currency 



APRIL 22, 1945 



739 



tricks — to secure a larger share of a shrinking vol- 
ume of world trade. No wonder that between 1929 
and 1932 the value of world trade fell by nearly 
70 percent; and, even after industrial recovery 
had taken place, the value of world trade in the 
1930's remained 40 percent below the level of the 
1920's. 

We cannot afford to make the same mistakes 
in dealing with international currency problems 
after this war. A large part of the world, includ- 
ing Great Britain and the Dominions, is convinced 
that the difficulties of the 1920's were due to a re- 
turn to the gold standard. They have stated quite 
bluntly that they will not return to the old gold 
standard. Nor is it enough to get countries to 
return to the gold standard, as in the 1920's. If 
international currency problems are dealt with by 
each country for itself, we must expect a repeti- 
tion of the same unfortunate mistakes; and this 
time the consequences would be far more disas- 
trous, for coimtries will employ restrictive and 
discriminatory practices with greater ingenuity 
and with increased efficiency. 

The experience of the 1920's and the 1930's on 
international investment is equally enlightening. 
Throughout the 1920's this country invested freely 
abroad. In too many instances, loans were made 
without consideration of their economic soundness 
and of the ability of borrowing countries to 
meet their obligations. When the great depres- 
sion came, we stopped lending almost completely, 
although we had an export surplus. And when 
the political and social disorders began in Europe, 
the capital flight to this country put added pres- 
sure on some currencies. After this war, we must 
make sure that our foreign investment is not hap- 
hazard ; that loans are made only for productive 
projects, on reasonable terms, and within the ca- 
pacity of borrowing countries to pay. 

This Government has been aware of the nature 
of the international monetary and financial prob- 
lems that would confront the world after the war. 
The Treasury, the State Department, and the Fed- 
eral Reserve Board have been working on these 
problems since 1941. After two years of study 
within the Government, after a year of prelimi- 
nary discussion among experts of some 30 coun- 
tries, the United Nations met at Bretton Woods 
and prepared proposals for an International 
Monetary Fund and an International Bank for 
Reconstruction and Development. These propos- 
als are now before our Congress for consideration. 



Despite the technical nature of the problems 
with which they deal, the Fund and the Bank are 
quite simple. We can summarize the fundamental 
principles of the Fund in four short statements. 
First, the members of the Fund recognize that in- 
ternational monetary problems are an interna- 
tional responsibility, and they agree to deal with 
these problems through international cooperation. 
Second, the members of the Fund undertake to 
maintain their currencies stable and not to change 
the parity of their currencies except after consul- 
tation with the Fund or with its concurrence. 
Third, the members of the Fund agree, after the 
post-war transition, not to impose restrictive cur- 
rency practices and to remove the restrictions they 
now have as soon as possible. Fourth, countries 
that abide by these standards of fair currency 
practice will be given limited help under adequate 
safeguards to supplement the use of their own re- 
serves in maintaining stable and orderly exchange 
arrangements. 

That is all there is to the International Mone- 
tary Fund. The essential features of the agree- 
ment could be stated in three or four pages. The 
provisions of the agreement are elaborated in great 
detail in order to state explicitly the safeguards 
that have been established to assure the proper 
operation of the Fund. But these technical de- 
tails are not of great consequence ; they do not mod- 
ifj' in any way the fundamental principles. And 
it is on these fundamental principles that we must 
pass judgment. 

It will not be possible to assure orderly interna- 
tional economic relations in a devastated and un- 
developed world. Before the war, one half of the 
world's trade was done with Europe. More than 
half the people of the world still lack the modeni 
means of production. Until Europe has been re- 
constructed, until the Far East and the American 
republics have built up their economies, the post- 
war readjustment will be half-hearted and halting. 

The process of reconstruction and development 
must be undertaken by each country largely with 
its own resources, using local labor and local mate- 
rials. There will be need for some foreign capital, 
particularly for machinery and equipment. If 
the necessary foreign capital is provided on reason- 
able terms for sound projects of reconstruction 
and development, it will be beneficial to the bor- 
rowing countries and to the lending countries. 
Sound international investment will contribute to 
the expansion of world trade and will facilitate 



740 



DEPARTMENT OF STATE BULLETIN 



the maintenance of orderly exchange arrange- 
ments. 

The Bretton Woods conference recognized that 
international investment is an international prob- 
lem, and it proposed the establishment of an 
International Bank for Keconstruction and De- 
velopment. The essential principles of the Bank 
are simple. Private international investment for 
sound productive projects should be encouraged. 
If private investors are not prepared to make 
worthwhile foreign loans, the International Bank 
will guarantee the loans, and, in exceptional cases, 
it will make the loans out of its own resources. 
Because the benefits of international investment 
are world-wide, all countries will share the risks 
of international loans through the Bank. 

It seems to me that the Bretton Woods proposals 
provide a practical, common-sense way of dealing 
with urgent international problems. There is 
general agreement that the proposal for the Bank 
should be adopted as it stands. There have been 
suggestions that the proposal for the Fund should 
be amended or put off. I want to discuss the criti- 
cisms of the Fund very frankly because overem- 
phasis of differences has led many to overlook the 
far broader area of agreement. I believe that the 
agreement on principles is broad enough to war- 
rant general support for the adoption of the pro- 
posal for the Fund as it stands. 

In his testimony before the House Committee on 
Banking and Clirrency, Mr. Burgess, the President 
of the Ajnerican Bankers Association, said that 
his association agrees with the objectives of the 
Fund. The disagreement, he said, is solely on the 
methods to be used to attain these objectives. In 
my opinion, even the disagreement on method is 
not fundamental; it is very largely a matter of 
words — a way of saying things. 

Mr. Burgess said that currency stabilization is 
not possible until countries have established a 
sound economic basis for stable and orderly ex- 
changes. No one disputes this; we have said so 
in the provisions of the Fund. The agreement 
states that the Fund is not to accept an initial 
parity of a currency, if it cannot be maintained 
without excessive use of the resources of the Fund. 
The agreement states that the Fund is not to un- 
dertake exchange transactions with any member if 
its circumstances would lead to use of the resources 
of the Fund in a manner prejudicial to the Fund or 
its members. And the agreement states that when- 
ever a member fails to carry out the purposes of 



the Fund, including the exchange objectives, the 
Fund can declare that member ineligible to use the 
resources of the Fund. 

In short, the articles of agreement say that the 
resources of the Fund should be used only by coun- 
tries that can appropriately use these resources to 
promote exchange stability, to maintain orderly 
exchange arrangements, and to avoid competitive 
exchange depreciation. It is a question of words. 
We believe that we have said all this as clearly as 
can be done in an international agreement without 
being offensive. 

Let me take up in detail some of the objections 
that have been made to the Fund. Critics have 
said that "the plan for the Monetary Fund in- 
troduces a method of lending which is novel and 
contrary to accepted credit principles". I am not 
impressed with the argument that it is reprehen- 
sible to use a new method of dealing with an un- 
precedented situation. But, in fact, the Fund is 
not novel. The United States Treasury has made 
about 15 bilateral stabilization agreements with 12 
countries, with aggregate commitments of several 
hundred million dollars, and after 8 years we have 
not lost one dollar. The International Fund 
would undertake exchange operations in precisely 
the same way and with the same safeguards. The 
only significant difference is that the International 
Fund would operate on a multilateral rather than 
a bilateral basis. 

The method by which the Fund makes credit 
available to members for stabilization purposes is 
not contrary to accepted credit principles. Of 
course, it is not done the same way a bank makes a 
loan to a local merchant. The Fund offers credit 
in limited amounts to member countries that need 
such credit to maintain stable exchange rates and 
fi'eedom in exchange transactions. I submit that 
a country that in good faith abides by the princi- 
ples of the Fund, that meets the tests specified in 
the agreement, is credit-worthy, and the aid ex- 
tended to such countries is in accord with the 
credit principles that should govern stabilization 
operations. 

Critics have said that the Fund is too large, that 
countries have plenty of reserves. Other countries 
now hold about 20 billion dollars in gold and offi- 
cial dollar balances. These reserves, though large, 
are very unevenly distributed, and a considerable 
part will have to be used for relief and reconstruc- 
tion in the immediate post-war period. Of the 
15 billion dollars of gold and dollar reserves that 



APRIL 22, 1945 



741 



may then be left after these expenditures, not 
more than 5 billion dollars would be used by coun- 
tries to maintain stable exchange rates and free- 
dom in exchange transactions. The remaining 10 
billion dollars would be retained as emergency 
reserves for the most critical periods. Before using 
these funds many countries would feel compelled 
to adopt extreme devices to protect tlieir last-line 
reserves. 

The question is really whether the Fund is too 
large for the purposes it must serve. Provided the 
world is reasonably prosperous in the post-war 
period, we may expect total world trade of more 
than 80 billion dollars annually. With such a level 
of trade, first-line reserves aggregating 5 billion 
dollars for all other countries, particularly as such 
reserves are now distributed, would be inadequate 
to deal with ordinary swings in the balance of 
payments. A Fund of 8.8 billion dollars would 
seem to be large enough to give countries confi- 
dence to use their own reserves for currency stabil- 
ization and to give them time to work out the 
necessary corrective measures without employing 
drastic restrictions. 

There is one point on which there seems to be 
some confusion. Under the Bank, a country has 
a veto power over any loans made by or through 
the Bank in its currency. In the Fund, currency 
transactions are made by the Fund and no country 
has a veto power. There is an important reason 
for this distinction. Loans made through the Bank 
may be exchanged for any currency without re- 
striction, and they could involve a drain on the 
exchange reserves of the lending country. For 
this reason, a country should have the privilege 
of determining whether it is in a position to have 
the loan made. On the other hand, currency sold 
by the Fund can be used only to make payments in 
the country whose currency is sold. Furthermore, 
each country subscribes gold, which may be used 
to buy any currency needed by the Fund. The sale 
of dollars by the Fund to make payments in the 
United States cannot result in a depletion of our 
exchange reserves. There is no reason, therefore, 
why a veto should be given to the United States 
on the sale of dollars by the Fund. 

One more objection. There are said to be dif- 
ferences between the United States and England 
on the interpretation of the provisions regarding 
exchange rates. There is no real difference on this 
point. Everybody is agreed on what these provi- 
sions say and mean. 



Let me put the facts in 1-2-3 order. The arti- 
cles of agreement state: First, that the par value 
of the currency of each country shall be expressed 
in terms of gold or the United States dollar; sec- 
ond, that the maximum and minimum rates for 
exchange shall not differ from parity by more 
than 1 percent ; third, that a change in parity may 
be made only on the proposal of the member and 
only after consultation with the Fund ; fourth, that 
minor changes in parity aggregating 10 percent 
may be made after consultation but without the 
concurrence of the Fund; fifth, that on all other 
proposed changes the Fimd shall either concur 
or object; and, finally, that if a member changes 
the par value of its currency despite the objection 
of the Fund, the member becomes ineligible to use 
the resources of the Fund and may be required to 
withdraw from membership in the Fund. 

Now, these provisions are as clear as crystal. 
There can be no difference of opinion as to their 
meaning. The difference centers about the name 
that should be given to these arrangements. It 
has been said in England that it is not the gold 
standard. It has been said in the United States 
that it resembles the gold standard. I think it 
doesn't make much difference what we call it. It 
is an arrangement to provide stable and orderly 
exchange rates. We can leave the selection of the 
name to scholars to work out at their leisure. 

As I consider the objections to the Fund, it 
seems to me that they are not fundamental. No- 
body claims that the provisions of the Fund are 
perfect. That is why there is an amendment pro- 
vision. For my part, I have no doubt that expe- 
rience will show the need for some changes. After 
we try the Fund for three or four years, it will 
be easy enough to make any changes needed to 
improve the work of the Fund. And we can make 
the changes then without the risk of destroying 
the work already done for international monetary 
and financial cooperation. 

The Fund and the Bank are only a part of a 
comprehensive program for securing a high and 
balanced level of world trade. The maintenance 
of stable and orderly exchange arrangements 
and the elimination of restrictive currency prac- 
tices are an important first step in this direction. 
But we must proceed promptly with other measures 
to raise world trade far above the pre-war level. 
That is why we have asked Congress to extend 
and broaden the Reciprocal Trade Agreements 
Act. That is why we want international agree- 



742 



DEPARTMENT OP STATE BULLETIN 



ments to reduce the tariff, quota, and other barriers 
to world trade. 

The Bretton Woods proposals are the founda- 
tion of the whole structure of international eco- 
nomic cooperation. The Fund puts into effect the 
principles on stable and orderly exchange arrange- 
ments which have been the policy of the United 
States for 10 years. It would be tragic if the 
groups in this country who are firm believers in 
the principle of international monetary coopera- 
tion were to place themselves in the position of 
irreconcilable opponents of the Bretton Woods 
program because of small technical differences on 
exchange operations by the Fund. 



At this time, when the United Nations are gath- 
ering at San Francisco to establish an interna- 
tional security organization, all of us have an ob- 
ligation to consider the Bretton Woods proposals 
again in the light of the whole program for peace. 
We cannot be perfectionists. There is only one 
test that we should apply to the Bretton Woods 
proposals. Can the Fund and the Bank with in- 
telligent management do a reasonably good job in 
dealing with post-war monetary and investment 
problems? I think the answer is "Yes". If so, 
we must get together in support of the Bretton 
Woods program. 



Senate Approval of the Water Treaty With Mexico 



Statement by THE PRESmENT 

[Released to the press by the White House April 18] 

In voting its approval of the water treaty with 
Mexico, the Senate today gave unmistakable evi- 
dence that it stands firmly in support of the estab- 
lished policy of our Government to deal with our 
good neighbors on the basis of simple justice, 
equity, friendly understanding, and practical 
cooperation. By this action of the Senate, the 
United States and Mexico join hands in a con- 
structive, businesslike program to apportion be- 
tween them and develop to their mutual advantage 
the waters of the rivers that are in part common 
to them. 



Statement by THE SECRETARY OF STATE 

[Released to the press April 18J 

When the Senate today by an overwhelming 
vote gave its consent to the ratification of the water 
treaty with Mexico, it brought much nearer to so- 
lution this serious water problem that has been 
troubling these two neighboring countries for sev- 

' Bulletin of Feb. 25, 1945, p. 302. 



eral decades. All that remains now is ratification 
by the Mexican Senate. 

The treaty, which resulted from long and care- 
ful study by both Governments, provides not only 
for a fair allocation of the waters of the Colorado 
and Tijuana Rivers and of the Rio Grande, but 
also for administration of its provisions by an 
old and experienced agency, the International 
Boundary Commission, United States and Mexico.' 
Furthermore, in order to make effective the provi- 
sions on allocation of water, the treaty calls for 
the construction of storage and diversion works 
on the Rio Grande and the Colorado and for in- 
vestigations and joint reports on flood control and 
related problems along the common boundary. It 
is, above all, a common-sense, businesslike arrange- 
ment whereby the two Goveniments, each doing its 
fair share, will cooperate as good neighbors in 
developing the vital water resources of the rivers 
in which each has an equitable interest. 

The Senate in approving the treaty exercised its 
constitutional privilege of advising the President 
on treaties by incorporating in the resolution of 
ratification some reservations which clarify cer- 
tain provisions but do not impair the rights and 
obligations of the United States under it. This is 
an excellent example of the close cooperation ex- 
isting between the legislative and executive 
branches of the Government. I am sure that this 
cooperation will continue in the future. 



APRIL 22. 194$ 



743 



Okinawa and the Liuchius 



By 



PAUL S. 



Historical Introduction 



ON Easter Sundat 1945, American Marines 
and Army troops landed on Okinawa in the 
Liuchiu Islands. A prolonged naval and air bom- 
bardment preceded the assault and continued even 
as the Americans dashed ashore against amazingly 
light opposition. 

But this was by no means the first time Ameri- 
cans had landed on Okinawa. Ninety-two years 
earlier Commodore Perry used Great Lew Chew, 
as Okinawa was then called, as a base for liis at- 
tempts to break down Japanese seclusion. In fact, 
the difficulties which Perry encountered on Oki- 
nawa were a foretaste of the obstacles he encoun- 
tered in Japan. The Regent of Liuchiu was also 
anxious to exclude the foreigner. In their policy 
of exclusion the Liuchiuans had not been alto- 
gether successful even before the time of Commo- 



AMOS' 

dore Perry, for Capt. W. R. Broughton of the 
British Navy had visited there at the end of the 
eighteenth century and H.M.S. Alceste had touched 
there in 1816. In the late 1840's both French and 
British warships visited the islands, and at about 
the same time a Protestant missionary, Dr. Bettel- 
heim, moved to Okinawa. The Anglican Bishop 
of Victoria paid him a visit in October 1850; the 
Liuchiuans managed to persuade Commodore 
Perry to remove Dr. Bettelheim to Shanghai when 
Perry's squadron left Okinawa in the summer of 
18o4> Indeed the Liuchiuans resented all for- 
eigners and put all manner of obstacles in the way 
of Perry's men's even landing at Napa (Naha), 
the chief port of Okinawa. But the redoubtable 
Perry persisted and not only procured supplies, 
had his men explore the island, and entertained the 
Regent but also extracted from the procrastinating 
ruler a treaty^ by which Liuchiu agreed to aid 



' Mr. Amos is an officer in the Far Eastern Unit of the 
Division of Commercial Policy, Office of International 
Trade, Department of State. 

^ Compact between the United States of America and the 
Royal Government of Lew Chew, signed at Napa July 11, 
1854 ; approved by the Senate Mar. 3, 1855 ; rati0ed by the 
President Mar. 9, 1855 (10 Stat. 1101-2; 18 Stat. (pt. 2, 
Public Treaties) 460; Treaty Series 194). The text of the 
compact follows : 

Hereafter, whenever Citizens of the United States come 
to Lew Chew, they shall be treated with great courtesy and 
friendship. Whatever Articles these people ask for, 
whether from the officers or people, which the Country can 
furnish, shall be sold to them ; nor shall the authorities 
interpose any prohibitory regulations to the people sell- 
ing, and whatever either party may wish to buy shall be 
exchanged at reasonable prices. 

Whenever Ships of the United States shall come into any 
harbor in Lew Chew, they shall be supplied with Wood 
and Water, at reasonable prices, but if they wish to get 
other articles, they shall be purchaseable only at Napa. 

If Ships of the United States are wrecked on Great 
Lew Chew or on Islands under the jurisdiction of the 
Royal Government of Lew Chew, the local authorities shall 
dispatch persons to assist in saving life and property, and 
preserve what can be brought ashore till the Ships of that 
Nation shall come to take away all that may have been 
saved ; and the expenses incurred in rescuing these unfor- 
tunate persons shall be refunded by the Nation they belong 
to. 

Whenever persons from Ships of the United States come 
ashore in Lew Chew, they shall be at liberty, to ramble 

641410 — 45 4 



where they please without hindrance or having officials 
sent to follow them, or to spy what they do ; but if they 
violently go into houses ; or trifle with women, or force 
people to sell them things, or do other such like illegal acts, 
they shall be arrested by the local officers, but not mal- 
treated, and shall be reported to the Captain of the Ship 
to which they belong for punishment by him. 

At Tumai is a burial ground for the Citizens of the 
United States, where their graves and tombs shall not be 
molested. 

The Government of Lew Chew shall apjioint skillful 
pilots who shall be on the lookout for Ships appearing oft 
the Island, and if one is seen coming towards Napa, they 
shall go out in good boats beyond the reefs to conduct her 
in to a secure anchorage, for which service the Captain 
shall pay the Pilot, Five Dollars, and the same for going 
out of the harbor beyond the reefs. 

Whenever Ships anchor at Napa, the officers shall fur- 
nish tliem with Wood at the rate of Three Thousand Six 
hundred copper cash per thousand catties; and with 
Water, at the rate of 600 copper cash (43 cents) for one 
thousand catties, or Six barrels full, each containing 30 
American Gallons. 

Signed in the English and Chinese languages by C!om- 
modore Matthew C. Perry, Commander in Chief of the 
U. S. Naval Forces in the East India, China and Japan 
Seas, and Special Envoy to Japan, for the United States ; 
and by Sho Fu fing. Superintendent of Affairs (Tsu li- 
kwan) in Lew Chew, and Ba Riosi, Treasurer of Lew 
Chew at Shui, for the government of Lew-Chew, and copies 
exchanged, this 11th day of July, 1854. or the reign Hien 
fung, 4th Year, 6th moon, 17th day, at the Townhall of 
Napa. 

M, C, Pebbt 



7U 



DEPARTMENT OF STATE BULLETIN 



shipwrecked American mariners, to sell provisions 
to American ships, to allow American citizens to 
ramble about the islands (as long as they were law- 
abiding), to protect American graves, and to pro- 
vide pilot services for a stated fee. This treaty 
was duly approved by the Senate of the United 
States and ratified by President Pierce. 

For some hundreds of years before the coming 
of Commodore Perry the Liuchiu Islands had paid 
tribute to both China and Japan. In fact the 
Liuchius had been paying tribute to China ever 
since 1372 and to the Japanese feudal state of 
Satsuma since 1451. 

In 1609 the King of the Liuchiu Islands was 
captured by the Japanese feudal baron of Sat- 
suma, and thereafter the Liuchius were consid- 
ered as practically a protectorate of Satsuma. In 
1874 Japan sent an expeditionary force to Formosa 
and demanded an indemnity from China for the 
killing in Formosa of some shipwrecked Liuchi- 
uans. This dispute was settled by a formal agree- 
ment signed at Peking in 1874 in which China 
undertook not to "impute blame" to JajDan in pro- 
tecting "its own subjects" and promised to com- 
pensate the families of those who were killed.^ 

Liuchiu continued to pay tribute to both China 
and Japan until the 1870's, when the Japanese 
forbade the King of Liuchiu to send any more 
tribute-bearing missions to China. But the King 
of Liuchiu sent a close relative to Foochow on such 
a mission, and local Foochow officials referred the 
matter to Peking. The Tsungli Yamen, as the 
Chinese Foreign Office was then called, instructed 
its Minister in Tokyo to make inquiries at the 
Japanese Foreign Office. Thus began a long dip- 
lomatic controversy between China and Japan 
over the Liuchiu Islands. In February 1879 the 
Chinese Minister to Japan reported that the Jap- 
anese Government had forced all Liuchiu agents 
in Japan to return to Liuchiu and that Matsuda, a 
Ministry of Interior official, had established a local 
Japanese government in the Liuchius. Matsuda 
also forced the Liuchiuan King to sign a promise 
not to seek Chinese intervention and to adopt the 
Japanese calendar. 

In April 1879 Japan announced the formal an- 
nexation of the Liuchius, and the Japanese Min- 
ister in Peking refused absolutely to discuss the 
matter with the Chinese, since he considered it an 
internal Japanese question. The Chinese requested 
the good offices of ex-President Grant of the United 
States, who was then on a visit to the Far East. 



Grant conferred on the matter with high officials 
both in Japan and in China and then suggested 
that the whole question be settled by direct nego- 
tiations. In accordance with this suggestion a 
Sino-Japanese conference was held at Peking in 
1880. The negotiations took place at a particu- 
larly advantageous time for the Japanese, because 
China was distracted by a dispute with Russia over 
Hi, a district of northwestern Chinese Turkestan. 
The Japanese insisted that a commercial most- 
favored-nation clause be part of the settlement. 
The conference drew up an agreement providing 
that the two southern islands should be Chinese, 
that there should be a mutual most-favored-nation 
clause, and "that negotiations between the two na- 
tions should take place if either should modify its 
treaties with other powers in respect to tariff and 
extraterritoriality." * 

Though the Tsungli Yamen was satisfied with 
this solution, the Chinese court was more doubtful. 
Li Hung-chang, a leading Chinese statesman, 
argued against ratification. The court submitted 
the agreement to the viceroys and governors of the 
coastal provinces and received varying answers. 
Because of non-ratification by the Chinese, Shi- 
shido, the Japanese Minister, withdrew from 
Peking. But negotiations continued until 1882 
when the Liuchiu question was overshadowed by a 
sharp Sino-Japanese dispute over Korea, and Li 
is reported to have recommended that the "ques- 
tion be left alone for the time being". 

Geography. Fauna, and Flora of the 
Liucliiu Islands 

What of the geography of this string of Oriental 
islands where American marines and soldiers have 
landed? For one thing there seem to be no less 
than 20 different ways to spell the name of these 
islands: Lew Chew, Lexio, Lequeo, Lequeyo, 
Loqueo, Liuchiu, Liu-Kiu, Likiou. Liqueo, Liq- 
uieux, Lekeyo, Lieoo-Kieoo, Leiu-Kieu, Likeo, 
Lieuchieux, Loo Choo, Riu-ku, Riukiu and 
Ryiikj'u. The last one is the Japanese Romanized 
spelling. The Liuchiu Islands, as we shall call 
them, stretch in a curve, outward toward the Pa- 
cific, for hundreds of miles from 80 miles south of 



' Great Britain, Foreign Office, British and Foreign State 
Papers, 1874-1S75 (London: William Ridgeway, 160, Pic- 
cadilly, 1882) , vol, LXVI, p. 425. 

* T. P. Tsiang, "Sino-Japanese Diplomatic Relations, 
1870-1894", Chinese Social and Political Science Revieio, 
April 1933, vol. XVII, no. 1, p. 50. 



APRIL 22, 1945 



745 



30' 



28' 




26° 



24' 



9 0-^ 



/ '^^' 






Okinawa 
jifTia A^ 






o 



/ 



A" 



26° 






24° 



124° 



126° 128° 130° 

MAP OF THE LIUCHIU (RYUKYU) ISLANDS 



746 



DEPARTMENT OF STATE BULLETIN 



Kyushu to within 75 miles of Formosa. Accord- 
ing to Japanese cartographers they total 55 in 
number and had in 1940 a population of 756,000. 
From north to south there are three island groups : 
Oshima shoto, Okinawa gunto, and Sakishima 
retto. 

The Liuchiu Islands except in the extreme North 
are of coral rather than volcanic origin. In the 
extreme North, however, there are two islands each 
with an active volcano. Otherwise there is no ele- 
vation over 2,000 feet except for a mountain on 
Amami 0-shima. Okinawa, where our troops 
have landed, presents a pleasing prospect of gently 
rolling hills. It is the largest of the islands, being 
a total of 63 miles long by 2 to 14 miles wide. On 
it is located Shuri, the ancient capital of Liuchiu; 
31/2 miles away is Naha, the modern capital and 
seaport. 

One of the most picturesque rumors about the 
Liuchius is that they are infested by poisonous 
snakes. Wliatever may be true on the other is- 
lands, it is doubtful whether there are many snakes 
in the more settled portions of Okinawa. Naha 
itself is a town of 60.000 persons, and it contains 
by no means the entire population of Okinawa. 
Amami O-shima seems to be the most accursed 
with snakes; they are called "habu" (Trimersurus) 
and grow to be 6 or 7 feet long and have a diameter 
of from 21/2 to 3 inches. These snakes are reported 
to be deadly and on Amami O-shima there are said 
to be many victims of them every year. Other 
wild animals are boar, deer, rats, and bats. 

Although the islands are close to the tropics 
their vegetation does not appear to be especially 
tropical: there is not the tall grass or tangled 
undergrowth of the tropics; there are frequent 
open plains, and the trees are not crowded. The 
temperature at Naha, the chief seaport of Okinawa, 
ranges from 60° F. in January to 82° F. in July. 

The People of the Liuchius 

Such is the physical background of the present 
military operations. What about the people? 
There seems to bent least some Ainu blood in them ; 
they are more hairy than the Japanese ; they have 
higher foreheads, sharper noses, eyes less deep-set, 
and heavy arched eyebrows. Furthermore, the 
Liuchiuans have not such conspicuous Mongoloid 
cheekbones as the Japanese. One theory is that 



* A recent survey of opinion taken among Japanese civil- 
ians interned on Saipan, including Japanese from tbe 
main islands and the I>iuchiuans, indicates that both 
groups believe that the latter are Japanese. 



as the Japanese drove the Ainu out of southwest- 
ern Japan one group of Ainu was driven north- 
ward to Hokkaido, while another was driven south- 
ward into Liuchiu to become the ancestors of the 
modern Liuchiuans. This theory may have some 
validity, but it would seem reasonable to assume 
that there is also a considerable mixture of Japa- 
nese and perhaps Chinese blood among the Liu- 
chiuans. The upper classes show especially 
strong marks of Japanese blood." 

The language of the Liuchiuans is similar to an 
archaic Japanese. For example, hand in modern 
Romanized Ja^Danese is te, and in Liuchiu it is 
Kee ; in Japanese ship is fune, and in Liuchiuan it 
is Hoonee. But there are some words which are 
quite different ; for example, sea in modern Japa- 
nese is ^im^, but in Liuchiuan it is Ooshoo. The 
Liuchiu language has been compared not only to 
archaic Japanese but also to modern Korean both 
as to accidence and syntax. There is no indigenous 
Liuchiu alphabet, but for hundreds of years the 
islandere have made use of Chinese characters. 

Economic Life of the Liuchiu Islands 

The principal commodity supporting the eco- 
nomic life of the islands is sugar ; quite naturally, 
practically the entire crop is sold in Japan. But 
the chief food of the islanders is the sweet potato; 
in times of scarcity, however, the Liuchiuans eat 
a kind of sago. The great delicacy of the Liu- 
chiuans is pork; an old law requires, in fact, that 
each family keep four pigs. Other food crops 
raised are rice, barley, wheat, vegetables, oranges, 
and melons. A little tea is raised, but most of 
that consumed comes from Japan. Besides food 
crops, the Liuchiuans raise cotton and Satsuma 
tobacco. They also raise plantains to be woven 
into ''banana cloth" by the island women. 

A word should be said about the domesticated 
animals of the Liuchiuans. They have ponies, cat- 
tle, pigs, and goats. The ponies, small but of a 
picturesque variety, are only 10 or IO14 hands 
high. 

There is a reasonably important fishing indus- 
try, cuttlefish and sharks being the principal 
items of the catch. Cuttlefish come especially 
from the southwestern or Yayeyama group of is- 
lands, and dried fish, of which Japan is the prin- 
cipal purchaser, come from the northern island 
of Amami O-shima. 

Manufacturing in the Liuchius is mostly on a 
handicraft scale; the outstanding product of the 



APRIL 22, 1945 



747 



craftsmen is a hardy vermilion-colored lacquer, 
which is much valued in Japan for household use. 

Cotton and silk cloth and pongee are manufac- 
tured also. The cotton cloth made in Okinawa is 
either shirogasuri — a white cloth with dark 
marks — or kurogasuri — a dark cloth with lighter 
spots. The yarn is imported from Japan but it 
is dyed and woven in the Liuchius. Men do the 
dyeing, but women perform the weaving. There 
are two other kinds of cloth manufactures: the 
tsumugi or silk cloth of Amami 0-shima and the 
jofu or hemp cloth of Miyako. Part of the silk is 
raised on Amami 0-shima, but much of it is im- 
ported from Japan. The jofu or hemp cloth of 
Miyako is a more expensive product than is the 
cotton cloth of Okinawa. In a sense, it is inaccu- 
rate to refer to the hemp cloth of Miyako, for the 
greater part of the raw material comes from Oki- 
nawa ; however, Miyako is the logical place for this 
cloth to be woven since it furnishes the dye and 
also supplies the skilled labor. 

The mineral resources of the islands yield no 
great wealth, but manganese deposits are found 
on Amami 0-shima, and in the Yayeyama or south- 
western group coal, gold, and copper can be mined. 
On Iriomoto in the Yayeyamas there is a coal 
mine. Although rubber trees grow on Okinawa, 
the island has no major rubber-growing industry. 
On Okinawa as on Formosa the Japanese Gov- 
ernment has a monopoly over the camphor indus- 
try. There is also a small quinine industry. Far 
more extensive is the production of bananas. In- 
deed bananas grow so profusely in the Liuchius 
that the islands might well be called "banana land". 
Extensive commercial timber, which is shipped to 
the main island of Okinawa, to Formosa, and to 
Japan, is also found. 

One of the most picturesque of native products 
is the adajnha hat, a headgear somewhat similar to 
a "panama". The straw for these hats is obtained 
from a shrub which grows luxuriously in the is- 
lands. Some claim that these hats do not change 
color and that the quality is comparable in every 
way to that of panama hats, but they cost much 
less. 

Another unique native industry is the production 
of awa7nori. which is a native liquor similar to the 
Japanese sake ; awamori, like sake, is brewed from 
rice. 

Social Customs 

The Liuchiuans have, of course, absorbed many 
of their social customs from the Japanese and 



Chinese. In dress they are similar to the Japa- 
nese : Both men and women wear the conventional 
kimono and the usual obi. However, the kind of 
material used frequently is "banana cloth", rather 
than the momen or cotton cloth of the Japanese. 

The coiffures of the Liuchiu islanders formerly 
differed somewhat from those of the Japanese. 
Both men and women of the islands wore hairpins 
stuck through a roll of hair on the top of the head. 
These hairpins were made of brass or wood and 
sometimes of gold or silver. This custom is prac- 
tically extinct ; the Liuchiuans now wear their hair 
very much in the Japanese fashion. 

In burial customs the Liuchiuans have followed 
the examples of the Chinese rather than of the 
Japanese culture. As in China the tombs are 
horseshoe-shaped structures built into hillsides. 
The dead are buried in coffins, but after three years, 
when the flesh has rotted away, the bones are 
washed in rice wine and placed in urns. These 
urns are then placed in the horseshoe-shaped tombs. 
Some of these tombs are reported to have been 
located in the hillsides facing the beaches where 
American forces first landed. They could have 
served as excellent defensive positions for the 
Japanese, but it is said that in only one of them 
was a Japanese machine-gun found. 

Significant as a cultural criterion of any people 
is the treatment of women. In the Liuchius the 
women of the upper class are secluded; they 
are never even mentioned in conversation. The 
women of the lower class, however, go about freely 
with uncovered faces. Many Liuchiu women 
formerly followed the custom of tattooing their 
hands, but now only prostitutes continue that cus- 
tom. The tattoo designs used varied from island 
to island : On Okinawa there were marks denoting 
an arrow, a bow, or the shape of the stars in the 
firmament ; in Miyako there was said to be a mark 
for each piece of hemp cloth which the woman had 
woven. 

Women in the Liuchius occupy, generally, an 
inferior position. Leavenworth in his book. The 
Loochoo Islands, has the following remarks to 
make : 

"A curious custom in some of the islands is 
interesting to the student of sociology. This is the 
way in which the women perform the major por- 
tion of the work. In the market at Naha, for 
instance, the dealers are women, and they present 
a picturesque sight, with their giant umbrellas 
ready to spread in case of rain. The husbands, 



748 



DEPARTMENT OF STATE BULLETIN 



very likely, are at home drinking tea or smoking. 
This strange custom, however, the writer was in- 
formed, is gradually dying out. Both the women 
and the men may be seen in the fields cultivating 
the land." 

It can certainly be said that in their attitude to- 
ward women the Liuchiuans have not been greatly 
influenced by Occidental Christian standards. 
The Liuchiuans seem relatively free of the influ- 
ence of any religion. A few Buddhist temples 
and Confucian shrines and the inevitable Shinto 
places of worship are found in all places of Japa- 
nese rule. The Buddhist priests are useful at fu- 
nerals and other ceremonies; but the Liuchiuans 
generally show no great religious fervor. 

Outstanding in native architecture is the Yenka- 
kuji, a Buddhist temple of considerable size and 
beauty at Shuri. Wliether this temple has with- 



stood the American naval and air bombardment is 
problematical. There also are, or were, a number 
of temples and other public buildings in Naha. 
Private houses are usually light structures with 
either thatch or tile roofs. 

Conclusion 

The Liuchiu Islands have been referred to as a 
land of propriety; and indeed this description 
seems very apt. There is little record of crime. 
Since the start of the American invasion our mili- 
tary-government officers have found the Okina- 
wans surprisingly tractable and ready to accept 
guidance. One reason for this attitude is that the 
Japanese have not always treated the Okinawans 
as equals. It will perhaps be a surprise as well as 
a disappointment to the Japanese if all the Liuchiu 
islanders show a spirit of cooperation toward the 
American newcomers. 



Renewal of Trade Agreements 

Statement by THE SECRETARY OF STATE ^ 



[Released to the press April 18] 

Once again, and this time on the very threshold 
of a momentous international conference to organ- 
ize the world for peace, this committee is called 
upon to review one of the essential elements in the 
foreign policy of the United States — the reciprocal 
trade-agreements program. On four previous oc- 
casions, and each time after intensive review, the 
Congress has affirmed the Trade Agreements Act 
as fundamental to this nation's economic policy of 
enJightened self-interest based on international 
cooperation and an expanding world economy. 

The abiding objective of our foreign policy is 
enduring peace in a prosperous world. The expe- 
rience of two wars and a great depression has 
demonstrated that we cannot obtain either in iso- 
lation. We can obtain them through the concerted 
action of the nations of the world, and our con- 
fidence in our abilitj to do so results from the vital 
fact that the real interests of other countries are 
the same as ours. Peace and prosperity are desired 
by all the United Nations. They can, in the mod- 
ern world, be obtained only by cooperation and 
agreed action. This is more and more becoming 
clear to peoples everywhere, and to their Govern- 
ments. That is the solid basis on which we build 
our hopes. 



We shall seek soon, at San Francisco, to create 
the permanent machinery for common action di- 
rected to both these great objectives. The institu- 
tion which we hope to build will not be a super- 
government. Major decisions in economic matters 
will still rest with national authorities. It is 
fundamental to the success of the whole effort that 
those decisions shall be taken wisely. 

The bill before you requires one of those deci- 
sions — one of those decisions of which President 
Roosevelt spoke when he said : 

"The point in history at which we stand is full 
of promise and of danger. The world will either 
move toward unity and widely shared prosperity 
or it will move apart into necessarily competing 
economic blocs. We have a chance, we citizens of 
the United States, to use our influence in favor of a 
more united and cooperating world. Whether we 
do so will determine, as far as it is in our power, 
the kind of lives our grandchildren can live."^ 

Nothing is more important to the relations 
among peoples than their daily dealings in the 
marketplace. Trade affects the livelihood of 



' Made before the House Ways and Means Committee on 
Apr. 18, 1945, 
' Bulletin of Feb. 18, 1945, p. 222. 



APRIL 22, 1945 



749 



everyone : The price of crops, the earnings of the 
workman, the profits of all business, the supply and 
price of goods on merchants' shelves. Wise and 
liberal trade policies create the basis of prosperity 
and friendship; unwise and restrictive measures 
mean hostility and want. These have been the 
teachings, through so many years, of my great 
predecessor, Mr. Hull. Had those counsels been 
heeded promptly after the last war, and put into 
vigorous practice by the major Allied countries, 
the world might well have avoided much of its 
present misery. 

In 1917 and again in 1920 Mr. Hull gave clear 
warning in the House of Representatives of what 
would happen to the world if the major trading 
nations followed restrictive trade policies, and he 
urged that a conference of nations be called to 
find ways to reduce existing barriers to trade, to 
prevent the growth of new ones, and to agree on 
standards of fair competition in international 
trade matters. His voice was not then heeded, and 
it remained unheeded through the critical years 
that culminated in the world-wide economic chaos 
of the 1930's. Now, again, we are face to face 
with the problems of rebuilding the economy of a 
shattered world. Secretary Hull's counsels are 
as appropriate today as they were when he uttered 
them 25 years ago. We shall not be forgiven again 
if we pursue the futile course of seeking peace 
and prosperity on a foundation of economic isola- 
tionism. 

Chairman Doughton's bill, based as it is upon 10 
years of successful experience with the trade- 
agreements program, is one of the instruments 
which this Government requires to make effective 
the philosophy of cooperation in international eco- 
nomic affairs. This bill would not only reaffirm the 
principles of the Trade Agreements Act of 1934, 
but would also grant the additional authority 
which now is necessary to make possible a vigorous 
drive to expand world trade through the reciprocal 
reduction of trade barriers. 

The authority contained in Mr. Doughton's bill 
would broaden and strengthen the Trade Agree- 
ments Act. But it works no fundamental change 
in the principle of the existing law, nor will it 
change in any way the administration of the law 
as it was established by the Congress in 1934. It 
was the intention of the Congress in the original 
law that trade agreements should be employed to 
expand our foreign trade by a process of hard- 
headed and businesslike bargaining. The act has 



been administered in strict accord with this pur- 
pose and it will continue to be administered in 
that way. 

I should like to devote most of my own remarks 
today to making clear the vital and basic position 
which the trade-agreements program occupies in 
our total foreign policy. But at this point I want 
to say a few words more about the administration 
of the program, for, as this Committee has always 
recognized, the matter of administration lies at 
the very heart of this plan for the promotion of our 
foreign trade. 

"It is clear that the successful administration 
of the trade-agreements program requires the com- 
bined efforts and resources of various departments 
and agencies in the Government. The Committee 
is satisfied that the existing interdepartmental or- 
ganization has brought the full resources of the 
Government to bear upon the problem in an effec- 
tive and economical manner with the sole view 
of carrying out the policies prescribed by Congress 
in the best interest of the Nation as a whole. The 
results achieved under the trade-agreements pro- 
gram during the past 9 years of its operation fully 
support this conclusion." 

This statement was a well-deserved tribute by 
your Committee to Secretary Hull, for his wise 
and patient leadership in the establishment of the 
smoothly functioning interdepartmental machin- 
ery by which the trade-agreements program is ad- 
ministered. All of us concerned with the program 
are determined that it will continue to be admin- 
istered in the same careful and effective manner 
in which it has been carried out for the last 11 
years. 

The interdepartmental trade-agreements organ- 
ization which advises and assists the President in 
administering the trade-agreements program has 
made an outstanding record of careful and expert 
work in formulating its recommendations to the 
President and in negotiating trade agreements 
under the existing act. The agencies which take 
part include the Departments of State, Treasury, 
Commerce, and Agriculture, and the Tariff Com- 
mission. Other departments and agencies are 
fully consulted when matters of interest to them 
are being considered. In its own field each agency 
contributes the best knowledge and advice avail- 
able in tlie Government. 

As required by law, advance public notice of in- 
tention to negotiate each agreement is given and 



750 

full opportunity is provided, through public hear- 
ings and otherwise, for any citizen to present facts 
and views which receive thorough consideration 
by the trade-agreements organization before nego- 
tiation is begun. The result is that no group of 
United States citizens finds consideration of its in- 
terests neglected in the operation of the program. 
In the State Department the primary responsi- 
bility for trade agreements rests with Assistant 
Secretary Will Clayton, who is in charge of the 
economic divisions of the Department. The active 
direction which Mr. Clayton will give the program 
affords assurance of sound and businesslike admin- 
istration. He brings to this assignment a lifetime 
of experience in foreign trade acquired both in 
high public office and in a successful career in pri- 
vate business. Under his supervision, practical 
experience and sound judgment will at all times 
govern the administration of the commercial for- 
eign policy of the United States. I know that he 
welcomes the opportunity which these hearings 
provide to lay before the Congress his views on the 
many detailed and technical problems in which 
you are interested. 

I wish to turn now to the broad question of our 
foreign policy as a whole and the relation of the 
trade-agreements program to it. 

At San Francisco we and the other United Na- 
tions will undertake to set up a framework of 
security within which countries can abandon the 
harmful economic practices into which they were 
led by the fear of aggression. We shall also 
serve notice upon would-be aggressors that it is 
futile for them to follow policies of economic war- 
fare and narrow nationalism in an attempt to 
build up strength for war. But all our consulta- 
tion and planning will come to nothing unless we 
take positive action to make our plans into accom- 
plishments. 

A resolute attack on restrictive trade barriers 
throughout the world — an attack such as would 
be made possible by enactment of the legislation 
proposed here — would give the rest of the world a 
symbol and a tangible proof that we mean what we 
say about joining with other nations in working 
toward a more prosperous and a more secure world, 
and that we are determined not to repeat the mis- 
takes that were made after the last war. 

The assault on trade barriers — and I quote — "is 
no longer a question on which Republicans and 
Demo<^rats should divide. The logic of events and 
our clear and pressing national interest must over- 



DEPARTMENT OF STATE BULLETIN 

ride our old party controversies. They must also 
override our sectional and special interests. We 
must all come to see that what is good for the 
United States is good for each of us, in economic 
affairs just as much as in any others." ^ 

These are the words of Franklin Delano Roose- 
velt, written shortly before his death. 

With victory we shall face domestic and inter- 
national economic problems of a magnitude it is 
scarcely possible to overestimate. In this coun- 
try we shall have to reconvert our greatly ex- 
panded productive capacity, which has been de- 
veloped, harnessed, and directed toward the one 
aim of victory. We shall have to provide jobs 
and wages and material goods for as many people 
as possible and in the greatest possible quantities. 

To this end it is our firm intention to relax and 
remove the wartime controls of production and 
distribution, as quickly as it is safe and possible 
to do so. We shall do this because, for the United 
States at least, the system of freely competitive 
private enterprise can and does provide the most 
jobs and the maximum volume of production. 

But the reconversion problem of the United 
States, great as it may be, will be far less difficult 
than the post-war problems of many other coun- 
tries whose plants have been wrecked, credit ex- 
hausted, markets disrupted, and manpower de- 
pleted. And we know that our American problem 
is not independent of the problems of other coun- 
tries. To us as well as to them it is of the utmost 
importance that the channels of foreign commerce 
be reopened and that goods be exchanged in large 
volume in order to speed the process of economic 
reconstruction and conversion. 

Rising standards of living in every part of the 
world are dependent in large measure on our abil- 
ity to bring world trade out of the trough of 1930's. 
When farmers and workers are allowed to produce 
what they can make most efficiently, and to trade 
their goods widely for the output of others, then 
everyone has more to eat, more to wear, more 
to enjoy. Freedom from want is not an imprac- 
tical dream, incapable of being realized in our 
time; it is a realistic goal, fully within the range 
of our productive skills and technologies. 

If, however, we mean to bend our efforts to ban- 
ish want, we must attack, vigorously and persist- 
ently, those barriers to trade which have the effect 
of penning up poverty within national borders. 
The world has never before been so eager to ac- 

' Btjlletin of Apr. 1, 1945, p. 533. 



APRIL 22, 1945 



751 



quire the products of our fields and factories. The 
demand for our goods will rise just as fast as we 
permit foreign countries to earn the dollars to pay 
for them. The size of our foreign market is not 
determined by tlie operation of mysterious and 
inscrutable forces; we can decide that we want a 
larger foreign market, and we can make it larger 
by allowing other countries to earn more of our 
money to buy more of our goods. The reciprocal 
trade-agreements mechanism is the best way we 
have yet found to negotiate such an increase in 
two-way trade with the nations which share our 
economic objectives. Trade is simply a way to in- 
crease the real income of both participants; and 
the trade-agreements plan is our method of increas- 
ing well-being and prosperity at both ends of the 
bargain. 

Tlie trade-agreements idea is more, however, 
than a procedure for bringing more goods to more 
people. It serves another, and perhaps a more 
important purpose. The reduction of excessive 
barriers to trade is one part, a very crucial part, 
of the task of creating the kind of economic order 
which is most conducive to the maintenance of 
peace. 

Economic distress, wide-spread and enduring, is 
a menace to the preservation of political freedom. 
We who have been through the ghastly events of 
the last decade cannot be blind to the danger that 
men who suffer and lose hope will trade their free- 
dom for totalitarian promises. Totalitarianism 
thrives on suffering, for iiungry men are desperate 
men, and desperate men are sensitive to the appeals 
of demagogs. 

No country can safely ignoi-e the decline of lib- 
erty and the emergence of totalitarian government 
in a neighboring country. Bitter experience has 
tauglit us that totalitarianism is too often associ- 
ated with sudden ai-med aggression. Wlien free- 
dom is buried, it is too late to take preventive 
measures. Wisdom in international relations de- 
mands that we strive to organize the world for 
prosperity, for prosperity is one of the strongest 
bulwarks of fi-eedom. Expanding world trade 
serves the cause of peace as it serves the cause of 
prosperity, for to serve one is to serve the other. 

The bill which you are now considering is thus 
an essential instrument in securing the expanding 
foreign trade which this nation and the world re- 
quires if we are to achieve our goals of peace and 
prosperity. That is not to say tliat this measure 
alone will enable us to place world trade on a 

641410 — 45 5 



sound basis. Closely related in the whole structure 
of our planning are the Bretton Woods proposals 
and the Food and Agriculture Organization which 
are also under consideration by Congress. 

The International Bank for Reconstruction and 
Develoiiment will promote the economic recovery 
of some of our best potential customers abroad and 
the development of the resources of other countries 
which can also contribute greatly to world trade if 
they have the money. The International Monetary 
Fund will facilitate stabilization of currencies, 
without which we cannot hope for a sustained and 
thriving world commerce. The Food and Agricul- 
ture Organization will assist the United States and 
other countries to develop improved methods of 
I^roducing and distributing food and agricultural 
products and to achieve higher standards of nutri- 
tion and greater consumption. 

Taken together, these measures and the broad- 
ened Trade Agreements Act will give us the ma- 
chinery we need to begin the work of substituting 
cooperation in international economic affairs for 
the isolationism and economic warfare which pre- 
vailed during the period between the two wars. 

Only two courses are open to us. Either we co- 
operate with other countries on a broad basis to 
improve economic conditions generally and to 
obtain security, or we seek to withdraw into a 
regimented, restricted, and unsatisfactory eco- 
nomic isolation which will again produce the 
menace of world-wide economic disaster and war. 
Surely there can be no question which course we 
mean to choose. Yet the economic pressures which 
would force us into the disasters of economic isola- 
tionism are still active. 

Only by vigorous and positive measures, taken 
in cooperation with other nations, can we prevent 
these pressures from forcing both ourselves and 
other countries down the path toward new restric- 
tions, new barriei-s, new attempts at self-sufficiency. 
Only such action can avert the development of 
regional economic blocs or commercial alliances, 
aggressive or defensive. Only the establishment 
of a system of international economic relationships 
which will prevent the use of such devices will 
make it possible to build an enduring peace. 

Our course was set for us by President Truman 
when he said to the Congress on Monday : 

"We have learned to fight with other nations in 
common defense of our freedom. We must now 
learn to live with other nations for our mutual 
good. We must learn to trade more with other 



752 



DEPARTMENT OF STATE BULLETIN 



nations so that there may be — for our mutinil ad- 
vantage — increased production, increased employ- 
ment, and better standards of living throughout 
the world." ^ 

The United States has much to gain by adopting 
such a policy as exemplified, in part, by the trade- 
agreements program. It has even more to lose 
by taking an opposite course. The first objective 



of American Government policy at home or abroad, 
in the economic or in any other field, is the welfare 
of American citizens. In my judgment, few 
measures which the Congress will consider at this 
session will so greatly promote the intei'ests of 
the citizens of this nation as your chairman's bill 
to renew and strengthen the Trade Agreements 
Act. 



Statement by ASSISTAIVT SECRETARY CLAYTON 



[Released to the press April 18] 

The bill which is before this committee would 
accomplish the renewal and strengthening of an 
act of Congress which is now 11 years old.^ 

The reciprocal trade-agreements program has 
become a part of the economic history of the 
United States. 

Over the past decade there has grown up around 
this program a record of legislative debate, news- 
paper comment, books, pamphlets, magazine ar- 
ticles which must run into millions of words. 

The administration of the Trade Agreements 
Act has been subjected to the most searcliing 
scrutiny; on the three previous occasions when 
this act came before the Congress for renewal, 
friends and foes alike have had a full opportunity 
to make their views known. As a result, the Amer- 
ican people are remarkably well informed on the 
terms, purposes, and achievement of this act, and 
their views, pro or con, are largely crystallized. 
Most people, by now, know where they stand on 
the reciprocal-trade-agreements question. 

I wish that this were not so. I say this despite 
the belief, which I think is borne out by the record, 
that the great majority of the American people 
ai-e favorably inclined toward the trade-agree- 
ments program. 

I believe that all of us would profit from :in 
effort to look at this bill, not in terms of what we 
thought about reciprocal trade agreements in 1931, 
1937, 1940, and 1943 but as a new instrument for 
use in the world of-tomorrow. For it is, in fact, 
a new instrument — made so not by new language 
but by a new world. Those who judge the trade- 
agreements program solely in the context of its 

' Soe p. 723. 

' Made before the House Wa.v.s and Means Committee 
Apr. 18, 194.^. 

' Bulletin of Apr. 1, 1945, pp. 531 aii<l 534, and Apr. 8, 
1945, p. C45. 



jDre-war operation are likely to miss the new and 
portentous meaning of this idea. Actuall)', the 
trade-agreements plan was born, in 1934, into a 
world that was even then headed toward war. The 
Jajaanese had struck at China three years before, 
and Hitler was firmly in power. Economic war- 
fare had already turned the world economy into a 
jungle of excessive tariffs, quotas, embargoes, sub- 
sidies, licenses, exchange controls, clearing-agree- 
ments, barter deals, preferences and discrimina- 
tions of all kinds. 

The Reciprocal Trade Agreements Act was a 
bold and far-sighted effort to stem the tide of eco- 
nomic nationalism. Under the wise and patient 
leadership of Secretary Hull we were able, by using 
the bargaining authority granted in the act, to 
moderate many of the more extreme practices of 
trade restrictionism and to provide a strong 
stimulus to the growth of our foreign trade. 

The record of achievements under the act was 
carefully studied by this Committee two years ago 
and is generally well known. Trade agreements 
have been negotiated with 28 countries, and hun- 
dreds of concessions have been obtained and given. 
Over Go percent of our normal foreign trade is 
carried on with trade-agreement countries. These 
countries have made concessions on 73 percent of 
their agricultural imports from us and on 48 per- 
cent of their non-agricultural imports from us. 
Between the years 1934-35 and 1938-39 our ex- 
ports to non-trade-agreement countries rose by 
only 32 percent, while our exports to trade-agree- 
ment countries rose by fiS percent. Likewise, our 
imports from non-agreement countries rose by 
only 13 percent, while our imports from trade- 
agreement countries rose by 22 percent. 

This is a remarkable record, but it is all the more 
remarkable in that it was accomijlished in an era 
of world economic disintegration. It is a tribute 
to the trade-agreements program and to the men 
in the various departments of the Government 



APRIL 22, 1945 



753 



who guided it that these impressive achievements 
were realized against such great adversity. 

Thus in the years before the war the trade- 
agreements program was an instrument for de- 
fense against an epidemic of destructive and de- 
moralizing trade warfare. Today, with the end 
of the great holocaust finally within sight, this 
same instrument is transformed into a powerful 
device for shaping a better world. This I believe 
is the new meaning of the trade-agreements pro- 
gram as it comes before the Congress for its fourth 
renewal. 

The terrible events of the last six years have 
worked profound changes in the minds and spirits 
of people in every corner of the world. The peo- 
ple are sick of war and sick of the narrow economic 
practices which undermine material well-being, 
generate international friction, and set the stage 
for war. Minds are being cleared of old preju- 
dices and old suspicions; everywhere there is a 
yearning for a new age of peace and prosperity 
rooted in international friendship and cooperation. 
Perhaps never again in our lifetimes will there 
be a time so auspicious as now for helping to 
build a world in which men may have the oppor- 
tunity to live out their lives, free from fear and 
free fi'om want. 

All eyes look to the United States for leadership 
in this task of world reconstruction. At this 
juncture in world history we find ourselves in a 
unique role which entails grave responsibilities. 
We have become so important to the world, both 
politically and economically, that no plan for the 
future is more than an architect's dream without 
the approval of the United States- 
After the war we shall have over half of the 
world's industrial capacity ; we shall be the gi'eatest 
creditor nation ; and the world will look to us for 
the capital goods necessary to repair the devasta- 
tion of the war. We own the greater part of the 
world's stock of gold. We are the greatest pro- 
ducer and the greatest consumer. We are the 
world's largest exporter, and we are the source 
of much of the world's technological progress. 
Certainly there have been few turning points in 
history at which a nation has been so well- 
equipped for leadership as we are today. 

Destiny has placed us in a position to lead, and 
we must know where we want to go. The United 
Nations Conference on International Organiza- 
tion, which will convene in San Francisco this 
month, is the culmination of several years of plan- 



ning for a house of nations to safeguard the peace. 
Secretary Stettinius, in his speech in Chicago ear- 
lier this month, filled in the framework of our plan 
to erect a firm economic foundation for the mainte- 
nance of peace. The need for dealing with trade 
barriers stands in the very center of that plan, for 
the creation of a healthy world economy cannot 
succeed in an atmosphere of exaggerated and re- 
pressive barriers to international trade. 

Our purpose in the commercial-policy sphere is 
to move toward the goal of expanding world trade 
open to private enterprise, on a competitive and 
non-discriminatory basis. 

We know of no better way than this to serve 
the economic interests of all peoples and to create 
the economic conditions which are conducive to the 
preservation of peace. The task will not be easy. 
The economic destruction and dislocation of war 
have raised new and serious economic problems and 
have put many barriers in the way of the general 
acceptance of the liberal trade principles we advo- 
cate. But the worst mistake of all would be to 
underestimate the great force of our moral leader- 
ship and to sell short the infiuence of the United 
States in world ali'airs. 

The great strength of the reciprocal-trade- 
agreements idea is the implicit recognition that 
international trade, like all trade, is a two-way 
afl^air. No trader can sell without buying; no 
nation can sell abroad without buying abroad. 
A manufacturer or trader profits because his sell- 
ing price exceeds his total costs; a nation profits 
because it secures better or cheaper goods abroad 
than at home, and pays for them with other goods, 
produced in excess of home requirements. 

During the 11 years of the Keciprocal Trade 
Agreements Act this program has paid oS in dol- 
lars and cents to the American farmer, business- 
man, and consumer. 

We produce many things more efficiently than 
foreign countries, which we can sell to their con- 
sumers if they will permit us to do so by relaxing 
their governmental restriction against imports 
from us. They in turn produce many things more 
cheaply than we, raw materials, finished food- 
stuffs, and highly specialized manufactures — 
which they can sell to our consumers if we will 
i:)ermit them to do so by relaxing the governmental 
restrictions we maintain against our imports from 
them. The trade-agreements program is simply 
a means bj' which we and foreign countries agree 
to the reciprocal relaxation of governmental re- 



754 

strictions on both sides, to promote trade in both 
directions to the benefit of producers and consum- 
ers in both countries. This expanded two-way 
trade results in a net gain in production and con- 
sumption for both countries, thus creating more 
jobs, raising the national income and standard of 
living. 

Such an expansion of world trade must be or- 
ganized after the war if we are to solve successfully 
the serious economic problems which face this and 
other countries. We, on one hand, have created 
during the war an enormous capacity to produce 
certain indu.strial materials, machinery, and 
equipment far in excess of what we shall be able 
to use ourselves in peacetime. On the other hand, 
the reconstruction needs of those countries which 
have been devastated by war and the development 
needs of those countries whose economic progress 
has been retarded by war will require great quan- 
tities of capital goods and industrial materials 
from us. These countries will not be able to finance 
such purchases, however, unless we are prepared 
to buy from them in larger volume the goods that 
they produce. Through the continued use of trade 
agreements, foreign countries will earn the dollars 
to buy the products of our efficient high-wage cap- 
ital-goods industries and thus assist in keeping 
them operating at a high level of activity. 

If the Trade Agreements Act is to play its right- 
ful role in the great work of economic reconstruc- 
tion, it requires not only renewal but strengthen- 
ing. In recommending to the Congress that the 
act be continued. President Roosevelt, shortly be- 
fore his death, asked that the authority to reduce 
tariffs by 50 percent be strengthened by making 
it apply to the tariff which we maintain today 
rather than to the tariff wliich we had 10 years ago. 
The bill now before this Committee embodies this 
proposal. 

The Trade Agreements Act must be strength- 
ened if this Government is to be empowered to 
work for the liberalization of world trade. The 
proposal for increased authority, which would per- 
mit this country to reduce its cxiMing tariffs, in 
exchange for reductions in the existing trade bar- 
riers of other countries, is merely another way of 
proposing that the program and policy of negotiat- 
ing reciprocal trade agreements be continued. 
Simple renewal of the act, without the increased 
authority, would mean in effect that no important 
trade agreements of substantial benefit to this 
country could be negotiated with those foreign 



DEPARTMENT OF STATE BULLETIN 

countries which are the principal outlets for Amer- 
ican exports. 

A few figures will illustrate this point. The au- 
thority under the present act, to reduce duties by 
not more than 50 percent of 1934 rates, has been 
full;/ exhausted in respect of 42 percent of our total 
dutiable imports from all countries, on the basis 
of 1939 import values. The authority has been 
partially exhausted, and in many cases almost frilly 
exhausted, in respect of an additional 20 percent 
of our total dutiable imports from all countries. 
Of the authority which has not been used at all, 
M-hich applies to 37 percent of our dutiable im- 
ports from all countries, a considerable part re- 
lates to a type of goods formerly supplied by Axis 
countries, some of which authority may be un- 
usable, because to use it would require the negotia- 
tion of trade agreements with the Axis countries. 
The situation with regard to those countries 
whicli are the biggest outlets for American ex- 
ports is as follows : In the case of the United King- 
dom, rates of duty have been reduced, under the 
trade-agi'eements program as a whole, on about 
90 percent, by value, of our total dutiable imports 
from that country in 1939. In the case of Canada, 
the figure is about 92 percent. The United King- 
dom and Canada are our two lai'gest customers. 
These two countries accounted for 31 percent of 
our total export trade in 1939. In the case of 
France, Sweden, and Mexico, other important 
peacetime buyers of American exports, rates of 
duty have been reduced about 70 percent, GO per- 
cent, and 90 percent, respectively, on our total 
dutiable imports from those countries. 

The conclusion is clear, and is particularly un- 
satisfactory to me as a business man : Under the 
act as it stands today, we are unable to negotiate 
to the extent required new and mutuallj' advan- 
tageous business with our best customers. As a 
public servant, I would consider the failure to 
remedy such a situation unwise in the extreme. 
Only by relating the Trade Agreements Act to our 
present situation can we make it a fully effective 
device for the expansion of world trade. 

The question might be asked : If the United 
States has largely used up the 50-perccnt authority 
in the Trade Agreements Act in reciprocal agree- 
ments with other countries, doesn't this mean that 
world trade barriers have now been brought down 
to moderate levels and therefore no further action 
is needed ? 

Even if the war had not intervened to create new 



APRIL 22, 1945 



755 



and critical trade problems for us in the future, the 
answer to the question would be plain. The fact is 
that in 1934, when the trade-agreements procedure 
was established, world trade had been all but ex- 
tinguished by the jungle of trade restrictions, of 
every conceivable kind, then in force. The United 
States had on its books the Hawley-Smoot tariff of 
1930, in which rates of duty had been raised to the 
highest levels in our history. Other countries, 
partly in retaliation for this disastrous blow at 
their export trade, and partly for reasons arising 
out of the great depression, resorted to higher 
tariffs and all the other paraphernalia of trade 
restriction which we associate with the economic 
chaos of the 1930's. 

The authority of the Trade Agi-eements Act, 
related as it was to the nearly impassable trade 
barriers of 1934, was, as we have seen, not suffi- 
cient to do more than ameliorate some of the ex- 
cesses of the most virulent case of trade restric- 
tionism the world has ever experienced. As a 
defensive weapon, the Trade Agreements Act did 
its job well; but our pride in our past accomplish- 
ments should not be allowed to obscure the fact 
that the existing network of barriers to world 
commerce is still so formidable as to be utterly 
inconsistent with the achievement of those high 
levels of production and consumption to which we 
are all devoting our best energies. 

If we were living in a stationary world, if the 
underlying factors affecting each nation's foreign 
trade remained stable, it might be possible, even 
without pressing forward with our trade-agree- 
ments program, to hold the gains we have already 
made. The post-war world, however, will not be 
at rest. Entirely apart from the legacy of trade 
restrictions which we inherit from the pre-war pe- 
riod, there are new and critical trade problems 
which have arisen as a by-product of the war and 
which must be resolved in one way or another. 

Many nations, surveying their post-war trade 
prospects, anticipate serious deficits in their inter- 
national balance of payments. Such deficits are 
remedied either by increasing exports or reducing 
imports. If we stand still, these countries cannot. 
If we fail to take strong action to make possible a 
solution by expansion, we shall force them to 
choose a solution by contraction. If these coun- 
tries have no choice but to curtail their imports, 
the reduction of their orders from us will be felt 
in fields and factories in every comer of America. 

That is why our existing trade agreements are 



in danger, and why increased authority imder the 
Trade Agreements Act is necessary to preserve 
them. For if these greater needs are not met 
through the further relaxation of trade barriers, 
the nations may be forced by the pressure of their 
economic circumstances to free themselves from 
trade-agreements obligations in order to take 
the actions they deem necessary to protect their 
economies. 

Wlaat we have achieved in our existing trade 
agreements is a kind of truce, between this country 
and individual foreign countries, that in respect of 
the products covered by the agreements, neither 
of us will resort to the extreme trade measures 
which, before 1934, we employed in a futile effort 
to better ourselves at each other's expense. 

If these agreements should be terminated, as al- 
most all of them can be on short notice, this truce 
would be broken, and these excessive restrictions 
would, of course, automatically come back into 
operation. 

There is now grave danger that this truce may 
be broken. Unless the United States is prepared 
to assume the responsibility for world leadership 
commensurate with its power and influence in 
world economic affairs, our existing trade-agree- 
ments structure may give way under the stress and 
strain of war's aftermath. If this should happen 
we may witness a resurgence of trade restrictions 
and international economic warfare far surpassing 
anything in our previous experience. 

The additional authority to make new reciprocal 
trade agreements, which would be granted by the 
Congress if this bill is enacted into law, imposes 
serious new responsibilities upon those who would 
be called upon to exercise it. The power to reduce 
tariffs is an important power, not to be treated 
lightly by those who grant it or those who exercise 
it. The act wisely requires that no agreement be 
concluded before all interested persons are given an 
opportunity to present their views, and it also re- 
quires that information and advice be sought be- 
fore the conclusion of an agreement from the gov- 
ernment agencies most directly concerned. 

Eash and ill-considered administration can turn 
any good law into a bad one. In my new position 
as Assistant Secretary of State for economic af- 
fairs, I shall have the principal responsibility for 
the State Department's share in the administra- 
tion of this law. That is why I welcome the 
opportunity to discuss the administrative machin- 
ery which has been established pursuant to the 



756 



DEPARTMENT OF STATE BULLETIN 



act. It is important that the Congress be satis- 
fied that tlie machinery for the construction of 
these trade agreements is designed to eliminate 
every foreseeable source of error and to reduce to 
the absohite minimum the chance that an agi'ee- 
nient may work an injustice on some American 
producing or consuming group. 

I believe that it is so designed. This commit- 
tee in its previous hearings has examined care- 
fully the procedures which have been devised 
for the administration of the trade-agreements 
program. Under the conscientious and fair- 
minded direction of Secretary Hull, an adminis- 
trative machine has been perfected which I be- 
lieve to be the most equitable and scientific system 
for tariff determination that our country has ever 
known, and I strongly suspect that there is no 
better in the world. 

Three things have impressed me most about the 
procedures that have been established. Fust, the 
technical machinery has very wisely been built en- 
tirely on an interdepartmental basis. Kepresenta- 
tives of all the departments mentioned in the 
Trade Agreements Act sit on the top committee, 
which is known as the Interdepartmental Trade 
Agreements Committee, and on the numerous 
working subcommittees of this body. Thus, for 
example, with the Department of Agriculture par- 
ticipating intimately in all the work, there is no 
chance that the interests of the American farmer 
will be overlooked. 

Secoiid, a high-level committee, under the chair- 
manship of the vice chairman of the Tariff Com- 
mission, has been established to hear all parties 
interested in a proposed trade agreement. The 
functions of this body, the Committee for Reci- 
procity Information, are rightly regarded as one 
of the most important elements in the trade-agi'ee- 
ments procedure. The late A. Manuel Fox, for- 
merly a member of the Tariff Commission, told 
this committee in 1940 that "Nobody ever appears, 
files a brief, or .sends a letter to [the Committee for 
Reciprocity Information] in regard to any trade 
agreement matter without the information so 
submitted being summarized and put before the 
people who are going to have anything at all to 
do with the trade agreements." That statement 
remains true today. 

Third, a perfectly astonishing volume of infor- 
mation is collected and analyzed by experts before 
an agreement is concluded. In the case of the 
Belgian agreement, to take an example, the ana- 



lytical data on the commodities involved filled 15 
large volumes, each the size of a large telephone 
book. In that case, studies were made of 165 com- 
modities on which we might have granted conces- 
sions to Belgium. The analytical information 
was carefully weighed and concessions were in fact 
granted on 17 of those commodities. This is the 
kind of careful, conscientious, impartial adminis- 
tration which inspires public confidence. 

I do not wish to impose on the time of this com- 
mittee with further procedural details. I do, how- 
ever, wish to convey to the committee my complete 
satisfaction with the existing machinery of ad- 
ministration, which we have taken over intact 
from Secretary Hull. I shall be happy to work 
with it, for I believe that it is designed to provide 
every necessary safeguard to avoid injustice, and 
to assure that the final decisions in each case are 
in accord with the weight of the evidence. 

We are very fortunate to have at hand, at a time 
when we are uniquely endowed with all the power 
and influence necessary to lead the world toward 
economic reconstruction, an instrument which has 
been tested and improved over the years, and in 
which the American people have great confidence. 
It has been used with caution and with wisdom, 
and it will continue to be used that way. It is a 
powerful instrument, for behind it lies the richest 
market in the world and an incomparable produc- 
tive machine. The business men of other coun- 
tries want the products of that economic machine, 
and they will buy them just as fast as they are 
permitted to earn the dollars to pay for them. 

If we allow them to earn the dollars, we shall be 
backing up with the strongest kind of positive ac- 
tion our allegiance to the principles of economic 
liberalism and private enterprise. These princi- 
ples are in the balance today, and words alone 
will not save them. They will survive just so long 
as they are able to satisfy the honest aspirations 
of the people of the world for economic well-being. 
Expanding world trade is capable of bringing a 
greater volume and a greater variety of goods to 
the people of all countries. Our way of bringing 
about an expansion of trade is the way of economic 
liberalism and private enterprise, both of which 
principles are embodied in the trade-agreements 
idea. 

If this way fails — and it cannot succeed without 
the vigorous participation of the United States — 
there are other ways. There is the way of eco- 
nomic blocs, in which a group of nations which 



APRIL 22, 1945 



757 



cannot solve their problems by letting the rest of 
the world in, try to solve them by shutting the 
rest of the world out. There is also the way of 
governmental barter, in which governments take 
over the foreign-trade function and reduce it to the 
most primitive terms of direct two-way exchange 
of goods for goods. These are two of the ways 
most likely to be chosen to handle international 
trade if the liberal, free-enterprise system fails. 
Both tend in the long run to contract and restrict 
rather than expand international trade, and both 
are contrary to our deepest convictions about the 



kind of economic order which is most conducive 
to the pi'eservation of peace. 

The extension and strengthening of the Kecip- 
rocal Trade Agreements Act would, I believe, 
give confidence and courage to our friends through- 
out the world who share our economic creed. It 
would be a signal for all to hear that the United 
States is not only the greatest advocate of expand- 
ing world trade based on free enterprise, fair com- 
petition, and non-discriminatory treatment, but 
is also determined to take the steps necessary to 
make such a system work. 



Statement by ASSISTANT SECRETARY ROCKEFELLER 



[Released to the press April 19] 

I had the privilege of appearing before this 
committee for the first time just two years ago 
when, as Coordinator of Inter- American Affairs, 
I presented my views to you on the Trade Agree- 
ments Act. I was in favor of the act's renewal 
then and I am in favor of its further extension now 
as proposed in H.R. 2652. 

Since my previous appearance before you my 
official duties have changed. Last December I 
became Assistant Secretary of State in charge, 
under the Secretary of State, of relations with the 
other American republics. My basic interest and 
responsibility in this position, as in my former job 
as Coordinator, is to further all activities, govern- 
mental and private, which will serve our country's 
best interests through the development of inter- 
American relations based on understanding, mu- 
tual trust, and confidence among all of the 21 
republics of this hemisphere. 

The hemisphere unity which has been achieved in 
tliis war is a priceless asset not only to us but to 
each one of the other republics. This unity is not 
the product of mere words. It is made up of 
countless instances of doing things together, of 
working out problems to our mutual best interest 
through joint efforts and common agreement. 
That's the essence of international cooperation in 
action. The record shows not only that it works, 
but, perhaps even more important, the record here 
in the hemisphere shows that in reality it is the 
only policy that works. You simply cannot get 
unity by either force or purchase — you work it out 
together, or you just don't get it. Simple as it 
sounds, it is not an easy course to follow. But 
the record is clear — there's no short cut. We and 
the other American republics have worked out to- 



gether some difficult problems during the war : Pro- 
duction of strategic and critical materials; devel- 
opment of military cooperation for the defense 
of the hemisphere ; control of subversive activities ; 
and the maintenance of essential wartime trans- 
portation despite submarine warfare and shortage 
of fuel and equipment. 

"I have no hesitation whatsoever in saying that, 
in my opinion, we have these nations as valued 
allies and helpful friends today because we previ- 
ously by word and deed gave them a solid basis 
for confidence in our friendship. Again, I have 
not the slightest hesitation in saying that the re- 
ciprocal trade-agreements program which your 
convmittee and the Congress inaugurated in 1934 
and which Secretary Hull has steadfastly cham- 
pioned is viewed by these countries as one of the 
most tangible and abiding manifestations of a 
good neighbor. I am equally convinced that noth- 
ing would do more to create serious misgivings on 
the part of these countries concerning our future 
relations with them than any action on our part 
which had the appearance of terminating or ham- 
pering the operation of the trade-agreements 
program." 

That is what I said when I testified before this 
committee in 1943, and the same thing is true 
today. 

We are here dealing with fundamental prob- 
lems which affect the very basis of our interna- 
tional relations and the future security and wel- 
fare of our own country. 

Broadly speaking, it seems to me that there are 



' Made before the House Wa.vs and Means Corcftnittee on 
Apr. 19, 1945. 



758 



DEPARTMENT OF STATE BULLETIN 



two ways in which we can proceed to obtain these 
objectives. We can either go alone as we did after 
tlie last war (you gentlemen know the results), or 
we can try to work out our problems together along 
the lines of the Mexico City conference and the 
forthcoming meeting at San Francisco. No na- 
tion today, large or small, can solve its problems 
alone. We 7nust follow the course of international 
cooperation. 

The Trade Agreements Act is simply a method — 
and experience has proven it an effective method — 
for getting together with other nations to work 
out trade-barrier problems. 

The Inter- American Conference on Problems of 
War and Peace which was held at Mexico City last 
month took important steps to assure that the 
republics of this hemisphere will work out their 
problems in peace as they have in war, that is, to- 
gether. The Economic Charter of the Americas 
adopted at Mexico City established principles on 
the basis of which the 21 American republics are 
prepared to work together among themselves and 
with other nations for a more prosperous world 
for all peoples. 

I would like to quote two of the guiding prin- 
ciples of the Economic Charter of the Americas : ^ 

"2. Equality of Access 

"To cooperate with other nations to bring about 
through the elimination of existing forms of dis- 
crimination and the prevention of new forms, the 
enjoyment by all nations of access on equal terms 
to the trade and raw materials of the world, in 
accordance with the principles of the Atlantic 
Charter, and likewise to declare and accept a re- 
ciprocal principle of equal access to the producers' 
goods which are needed for their industrial and 
economic development. 

"3. International Commercial Policy 

"To attain, as soon as poasible, the common aspi- 
ration of all the American Republics to find prac- 
tical international formulae to reduce all barriers 
detrimental to trade between nations in accordance 
with the purpose of assuring all peoples of the 
world high levels of living and the sound develop- 
ment of their economies, and to promote the coop- 
erative action which must be taken in other fields, 
particularly the stabilization of currencies, and 
international investment." 

I am sure that your colleagues in this Congress 



' BtrujcriN of Mar. 18, 1945, p. 451. 



who participated so importantly in the work of 
the Mexico City conference agree with me in set- 
ting great store by these and the other declara- 
tions of common principles which have been 
accepted by all the American republics. I can 
only add in this connection that I doubt there is 
anyone among us who would not set great store 
by the achievement of such agreement if he could 
know at first-hand the spirit of mutual under- 
standing and confidence which characterized the 
work of that Conference at every turn. 

Further extension of the reciprocal trade-agree- 
ments program, as proposed in the pending bill, 
would be in line with the spirit of this meeting 
and would be an important factor in assuring the 
continuation and extension of these basic principles 
which have contributed so much to the unity of 
the Americas. In this regard we are fortunate. 
We do not have to experiment with new policies 
and untried methods in order to put these princi- 
ples into operation. The Trade Agreements Act, 
which has been in effect for over 10 years now, is 
itself based upon the policy of cooperation with 
other nations as expressed in the Economic Char- 
ter of the Americas, the objectives of which were 
to bring about "the elimination of existing forms 
of discrimination and the prevention of new 
forms" and ''to find practical international for- 
mulae to reduce all barriers detrimental to trade 
between nations." 

As I stated to this committee in 1943 : "I think 
this policy is sound because I am convinced that 
there is just one direction in which we can go and 
hope to keep our way of life — by which I mean 
democracy and private enterprise — and at the 
same time maintain and increase the standard of 
living for all our people. That direction, in my 
opinion, must be toward the greatest possible utili- 
zation of our industrial and agricultural produc- 
tive capacities and the widest possible consumption 
of the fruits of this production. And we cannot 
go in this direction and at the same time limit our 
markets and the mutually profitable exchange of 
goods by excessive trade barriers." 

It has seemed to me that the trade-agreements 
program is sound not only in its policy but in its 
method. The method seems to me to be sound both 
(1) because it recognizes that the complex prob- 
lems of international trade have got to be worked 
out through frank consultation and mutual agree- 
ment of the nations concerned and (2) because it 
provides an expeditious and businesslike approach 



APRIL 22, 1945 



759 



for handling the problem within our own Govern- 
ment. The Congress lays down the objectives and 
policies it wants followed, and the matter of mak- 
ing the expert and factual determinations is prop- 
erly left to the various interested Government 
departments and agencies working together on the 
basis of facts and the views of interested parties 
and all the facts available. 

I don't pretend to be an expert in these matters, 
but the record of the program's operation seems to 
me has demonstrated its effectiveness. Under it 
agreements have been concluded with 28 different 
countries; 15 of these are American republics. 
The first agreement was signed with Cuba in 1934, 
and the last to be signed was with Mexico in 1943. 
It is impossible to fix with certainty all the factors 
which influence international trade. However, 
there is no room for doubt that these trade agree- 
ments contributed importantly, both directly and 
indirectly, to the restoration of our inter-Ameri- 



can trade from the low level of $472,000,000 in 
1932 to $961,000,000 in 1939, the last pre-war 
trade year. 

These and other figures speak of yesterday's 
trade. We, however, must do our thinking about 
today's problems in terms of tomorrow's trade. 
There are very few, if any, competent students of 
our country's economic problems who do not agree 
that an expanding economy and a rising standard 
of living for us depends upon a substantially larger 
volume of both domestic and foreign trade than 
we've ever known before. If we are determined 
to realize these ends our decisions must corre- 
spond always to the national interest and we must 
be prepared to go forward in supporting those 
programs which encourage the development of in- 
ternational trade. 

In brief, gentlemen, that is why I unqualifiedly 
support the present proposal for the extension of 
and strengthening of the trade-agreements pro- 
gram. I thank you. 



Meeting of the Committee of Jurists 

DRAFTING OF STATUTE FOR AN INTERNATIONAL COURT OF JUSTICE 



[Released to the press April 20] 

The United Nations Committee of Jurists, 
which began meetings on April 9,^ has completed 
the draft of a statute for an international court 
of justice which it will submit to the United Na- 
tions Conference at San Francisco. The Com- 
mittee, composed of outstanding jui'ists repre- 
senting 44 nations, was convened to prepare a 
draft statute of a court as contemplated by the 
Dumbarton Oaks Conversations. Chapter VII of 
the Dimibarton Oaks Proposals declares that there 
should be an international court of justice as the 
principal judicial organ of the new Organization, 
functioning under a statute which should be a part 
of the Charter of the Organization. 

The Committee's meetings, under the chairman- 
ship of Green H. Hackworth, Legal Adviser of the 
Department of State, manifested a spirit of har- 
mony and close cooperation. The Statute of the 
Permanent Court of International Justice, estab- 
lished under the Covenant of the League of Na- 
tions, was used as a working model ; changes made 
therein included those necessitated by the Dum- 
barton Oaks plan and others which the Commit- 
tee considered desirable, for example, the inser- 

641410 — 45 8 



tion of an article providing a method of amend- 
ment. On a few questions it was unanimously 
agreed that no definitive recommendation should 
be made at this time — decision being left to the 
San Francisco conference itself. Among these 
questions is the method of nominating judges of 
the Court, the chief question being whether to 
follow the indirect system of nomination used for 
the old Court or to adopt some more direct method 
of nomination by governments. Another is the 
question whether reference of cases to the Court 
should be optional, as under the existing Statute, 
or whether there should be a provision binding 
all states, parties to the Statute, to accept the 
jurisdiction of the Court in certain types of cases. 
At its meeting on April 18 the Committee unani- 
mously adopted the report of its work prepared by 
the rapporteur, Professor Jules Basdevant, Legal 
Adviser to the French Foreign Office. The cere- 
mony of signing the record of the meeting took 
place on April 20 at 2 : 30. The results of the ses- 
sions, embodied in the report and draft statute, 
will be transmitted to the San Francisco confer- 
ence for its consideration. 



* BULUEOTN of Apr. 15, 1945, p. 672. 



760 



DEPARTMENT OF STATE BULLETIN 



Relations Between Foreign Trade 
And the Welfare of Small Business 

Statement by ASSISTANT SECRETARY CLAYTON' 



[Released to the press April 17] 

I appreciate this opportunity to appear before 
the Foreign Trade Subcommittee of the Senate 
Small Business Committee. You wish me, I be- 
lieve, to discuss the relations between foreign trade 
and the welfare of small busmess. 

A very large part of our import and export trade 
is in fact conducted by small business units. The 
welfare of these firms is obviously directly de- 
pendent on the volume of foreign trade, both im- 
ports and exports. Although the great majority 
of small-business undertakings are not directly 
engaged in foreign trade, they are, nevertheless, 
vitally affected by the volume and character of 
our trade with the rest of the world. 

What small business and indeed every business 
requires first and most is a high level of general 
prosperity. When business as a whole is active, 
when labor is earning good wages and farmers are 
receiving good prices, when consumers have money 
to spend, then small business also prospers. When 
the opposite conditions prevail in general, they 
prevail also in small business. And small busi- 
ness is on the whole less able to withstand periods 
of inadequate demand than is large business, as 
the figures on business mortality in depression 
clearly show. The reserves of small business are 
ordinarily not as adequate as those of larger units 
to tide over periods of adversit3\ 

"Wliat I shall say therefore will deal mostly with 
the contribution which foreign trade can make to 
expanding the general prosperity of the United 
States. 

Small business has a special interest in avoiding 
the domination of big and monopolistic business. 
I shall therefore have something to say about the 
particular problem of international cartels and 
combines. 

World peace and world trade are inseparable. 
International economic cooperation is essential to 
international political action to build and keep the 
peace. In a few days we shall meet at San Fran- 
cisco to set up a partnership to preserve peace. 
The nations participating in this partnership are 
not likely to be able to work together successfully 



in the long run if they become involved in day-to- 
day disputes on money, trade, and tariffs. This is 
the first and greatest reason for favoring a regime 
of international cooperation rather than inter- 
national conflict in trade matters. 

The second reason is that we and other countries 
can get further on the way to full employment and 
prosperity if we work at the job together' rather 
than at cross purposes. 

Discriminatory trade devices and excessive tar- 
iffs after the other war resulted in restricted 
markets and lessened purchasing power and em- 
ployment. To maintain purchasing power and em- 
ployment, we must move in the other direction this 
time. 

During the twenties and thirties a variety of 
monetary devices were used by nations in the mis- 
taken belief that they were advancing their own 
national interests although at the expense of other 
countries. When the gold standard collapsed, it 
was replaced by a number of makeshift currencies 
and exchange controls that sharply reduced trade 
between the nations. These monetary manipula- 
tions went hand in hand with other discriminatory 
trade devices, and together constituted a kind of 
economic warfare long before war was declared. 

The Dumbarton Oaks Proposals represent our 
foreign policy for the maintenance and promotion 
of peace through international organization. The 
Proposals clearly show that the new international 
Organization is to be directed not only toward se- 
curity against aggression but against the causes, 
especially the economic causes, of disagreement 
among countries. 

The Bretton Woods agreements, providing for 
an international bank and a monetary fund, sub- 
stitute international monetary cooperation for in- 
ternational monetary warfare. 

We are also cooperating in the setting up of the 
proposed International Organization for Food 
and Agriculture, which 20 countries have already 
approved. 

We are making progress toward international 
cooperation on the problems of civil aviation. 

' Made before the Foreign Trade Subcommittee of the 
Senate Small Business Committee on Apr. 17, 1945. 



APRIL 22, 1945 



761 



An expanding world economy is fundamental to 
these proposals for international cooperation. 

After the war we will have a vast amount of 
surplus productive capacity in this country even 
after the deferred demand for civilian goods is 
taken up. Tlie capacity of great segments of 
American industry has been so greatly increased 
during the war that no peacetime domestic market 
such as we have had in the past can absorb their 
output. Many industries will need foreign mar- 
kets for part of their output, if they and their 
workers are to absorb the output of other produc- 
ers. Also, it is in the best interests of the United 
States to assist devastated countries with exports 
of machinery, tools, equipment, and technical 
knowledge necessary for their reconstniction and 
development. In this way it will become possible 
for such countries to utilize their own resources 
and skills efficiently, raise their standard of living, 
and import in rising volume what they cannot 
produce efficiently at home. Since there are 
always limits on the resources available to coun- 
tries, imports will be essential to supplement those 
resources that they already possess. 

Many branches of Ajnerican agriculture have 
always needed foi'eign markets and will, of course, 
continue to need them after the war. We have 
always sold cotton, tobacco, lard, flour, apples, to 
mention a few important farm products, to foreign 
customers in large quantities. If these foreign 
markets should be lost, declining prices and un- 
marketable surpluses would brmg distress to thou- 
sands of farmers. Furthermore, we know that the 
demand for farm products of all kinds here at 
home depends on payrolls in industry. The stim- 
ulus of foreign orders, work, and wages in indus- 
try directly benefits the domestic market for all 
crops. 

For the most part our foreign customers will pay 
us in goods and services ; but for some time after 
the war several foreign countries will not be able 
to export enough to pay for their imports, and 
will therefore require financial assistance from 
outside. Ultimately, we must take payment in 
goods and services for our exports and for our 
foreign loans. And we can only get payments in 
this way if world-wide discriminations in trade 
are eliminated, and tariffs and other barriers to 
the exchange of goods and services are reduced. 

Small business will continue to operate at a dis- 
advantage in international trade so long as inter- 
national cartels and combines are allowed to em- 
ploy restrictive practices to maintain their control 



of the international markets. Many small busi- 
nesses lack the financial strength to wage war for a 
share of a market. Their only claim to a share is 
their ability to offer a good product at a low price. 
Division-of-territory agreements frequently in- 
volve the use of repressive tactics on the part of 
the cartel members to keep independent producers 
out of areas assigned exclusively to certain pai't- 
ners in the cartel. Moreover, restrictive inter- 
national patent-pooling agreements have been used 
and can be used to bar new enterprises entirely 
from certain fields of business. 

Within the United States the Sherman act is 
the first line of defense for small business against 
the use of such tactics and its value in protecting 
small business is widely recognized. It is not go- 
ing to be easy, however, to protect small business 
in world markets from the abuses of international 
cartels, for several countries, especially on the 
continent of Europe, have a different tradition 
from ours in these matters. But our military vic- 
tory will give us an excellent chance to curb the 
world cartel system by attacking its German base 
of operations. Furthermore, there are increas- 
ing signs that the people of the liberated coun- 
tries of Europe are coming to realize that a laissez- 
faire attitude with respect to cartels is incompati- 
ble with the achievement of a healthy economic 
system. We may therefore have a real chance to 
get effective international action on this problem, 
and we certainly propose to take advantage of 
every opportunity to get ahead in that direction. 

But even if we are successful in our policy with 
respect to restrictive and monopolistic practices, 
trade will not move if governments interfere un- 
duly with it. In my opinion, therefore, we must 
have an active and effective program for the reduc- 
tion of trade barriers if we are to have increased 
prosperity in an expanding world economy. This 
is because business operations of all kinds depend 
on orders ; orders depend on the chance to make a 
profit ; and the chance to make a profit is cut down 
by anything that restricts trade and adds unneces- 
sarily to costs. 

We all understand quite clearly that high trans- 
portation costs between two points reduce the op- 
portunities for profitable trade between those ai'eas. 
Unreasonable governmental barriers against ex- 
ports or imports have the same effect as an artificial 
addition to transportation costs. We all believe 
it is worthwhile to improve harbors and railroads 
and roads and airports so that passengers and 
goods may move more easily and at less cost, and 



762 



DEPARTMENT OF STATE BULLETIN 



we have as a nation spent enormous energies and 
sums of money to do so. For the same reason and 
the same purpose it is worthwhile expending in- 
genuity and thought in the reduction of all kinds 
of artificial barriers to trade. 

In negotiating reductions in trade barriers, the 
United States will have three major objectives: 
First, to secure reductions of the foreign barriers 
and discriminations against American exports 
which still exist in many countries. Second, to 
hold back the pressure in many countries for in- 
creased protectionism after the war, and to turn 
that movement in the other direction as much as 
possible. Third, to prevent the possible break-up 
of the world economy into isolated economic blocs. 
If blocs arise, the friction between them would 
be very bad for the commercial interests of the 
United States and would seriously threaten the 
political foundations of security. 

Therefore one of the major aims of the trade- 
agreements program is the reduction in barriers 
to trade on a world-wide scale, making it possible 
for a country to sell goods to another country and 
to use the proceeds to buy goods from a third coun- 
try. As a typical example of this kind of trade 
around the board, which we call multilateral trade, 
we might consider our own trade with England 
before the war. 

England has for many years been one of our 
largest peacetime customers — in most years the 
largest. We have bought some things from Eng- 
land too of course, but by no means so much in 
dollar value as she bought from us. The British 
balanced their accounts with us therefore, in part, 
by selling, for instance, machinery and textiles to 
tropical countries which in turn sold various tropi- 
cal products to us in large volume. This kind of 
triangular or multilateral trade, which benefits all 
parties, can obviously be broken up and interfered 
with by excessive governmental barriers in any one 
of the countries concerned. That is why it is so 
important to us to get trade barriers reduced not 
in one or two countries but in all countries, and 
not only on the goods they import from us but also 
on the goods they import from each other. 

The whole point is that the total of world pro- 
duction, world employment, and world trade is not 
a constant figure, any more than the correspond- 
ing totals are in the United States. The best com- 
mercial policy and the one that is best for small 
business is one that seeks to make the total larger. 
One direct and simple way to do that, without any 
subsidy or bureaucratic regulation, is to reduce the 



artificial barriers that keep the total down. That 
is the method of the trade-agreements program, 
which Secretary Hull so long sponsored and ad- 
ministered, and which his successors in the De- 
partment of State are anxious to carry forward. 

The Reciprocal Trade Agreements Act passed 
by Congress in 1934 authorized the President to 
enter inta agreements with other countries by 
which the United States and any interested coun- 
try could each reduce the tariff and other trade 
barriers which they maintained against goods from 
the other. The agreements concluded as a result 
of this act have contributed greatly to the freer 
flow of private trade between the United States 
and the countries with whom agreements have been 
made. 

As President Roosevelt pointed out in his mes- 
sage, a more effective tool than the authority 
granted under the old Trade Agreements Act is 
now needed. Too much of the authority granted 
under the original act has been used up, especially 
as regards our trade with England and Canada as 
well as with the other countries with whom we 
have made agreements. These include France, 
Belgium, the Netherlands, Sweden, Switzerland, 
and most of the American republics. If we do 
not have something to trade with, in our negotia- 
tions with these countries, there is little leeway 
left in the program. A bill is, as you know, now 
before Congress for the extension and strengthen- 
ing of the Trade Agreements Act, which would 
give the United States bargaining power to secure 
real and substantial reduction of trade barriers. 

I shall discuss the particular measure in greater 
detail in the near future before the Ways and 
Means Committee of the House, to whom it has 
been referred. But I can say now that an exten- 
sion and strengthening of the Trade Agreements 
Act, substantially on the lines of the House bill, 
is in my opinion essential to any intelligent Amer- 
ican policy in commercial matters in the post-war 
years. It will not be very intelligent for Ameri- 
cans to loan money or to make investments or to 
sell goods abroad unless we put it in the power 
of our debtors and customers to pay us. They must 
pay us chiefly in the goods and services we buy 
from them. A liberal commercial policy, includ- 
ing reduction both of government-created and of 
cartel-created barriers to trade, is an essential part 
of any program whose objectives are free enter- 
prise, prosperity, and peace. In all such matters 
the interests of small business and of the Nation 
are, of course, identical. 



APRIL 2i. 1945 



763 



Agreement Between the United States of America and Belgium 
Under Section 3 (c) of the Lend-Lease Act 

EXCHANGE OF LETTERS BETWEEN THE BELGIAN AMBASSADOR AND THE 

SECRETARY OF STATE 



[Selcaaed to tba prcBS April 18] 

April 17, 19k5. 
The Honorable 
Edwaed K. Stettinius, Jr. 
Secretary of State 

My Dear Mk. Secketart : 

Several questions of interpretation have arisen 
with respect to the language of the Agreement 
between our two Governments under Section 3(c) 
of the Lend Lease Act. I believe it will be helpful 
to indicate the understanding which my Govern- 
ment now has with respect to these questions and 
I would appreciate an expression from you as to 
whether or not these understandings are correct. 

1. It is the understanding of my Government 
that the Agreement does not apply to arms and 
mimitions, and that arms and munitions now or 
hereafter provided to my Government will be sup- 
plied, on a straight lend lease basis, under the 
Agreement of June 16, 1942, between our two Gov- 
ernments on the principles applying to mutual aid. 

2. We understand that in general it is not the 
intention of the United States Government to ex- 
ercise its right under Article V of the Agreement 
between our two Governments dated June 16, 1942, 
to recapture any articles for which the Govern- 
ment of Belgium has paid or is to pay the United 
States Government. If, however, the United 
States Government should exercise this right with 
respect to any such articles, appropriate arrange- 
ments will be made for repayment to the Gov- 
ernment of Belgium. 

3. With reference to the last paragraph of Ar- 
ticle III of the Agreement under Section 3 (c) 
of the Lend Lease Act, it is the understanding of 
my Government that no articles or services will be 
transferred or rendered to my Government under 
that Article unless they have been requisitioned by 
my Government. 

4. In the first paragraph of Article IV of the 



Agreement under Section 3 (c) of the Lend Lease 
Act, it is stated that changes may be made from 
time to time in the items set forth in the Schedule 
annexed thereto, by mutual agreement between the 
United States of America and the Government of 
Belgium. It is our understanding that this lan- 
guage means that not only the items but also the 
values expressed for each item in the Schedule and 
the total value expressed for the whole Schedule, 
may be modified by mutual agreement. 

5. With regard generally to the provisions of 
the Agreement under Section 3 (c) of the Lend 
Lease Act with reference to risk of loss and trans- 
fer, as expressed in Section A of the Schedule 
annexed to the Agreement, it is my understanding 
that a suitable opportunity will be given to repre- 
sentatives of my Government, in accordance with 
the general procedures of your Government, to in- 
spect articles proposed to be transferred before 
their transfer. 

6. With reference to the provision of the Sched- 
ule annexed to the Agreement under Section 3 (c) 
of the Lend Lease Act that risk of loss shall pass 
in accordance with the customary practice of the 
United States Government with respect to trans- 
fers under the Act of Congress of March 11, 1941, 
it is the understanding of my Government that 
under the practice referred to risk of loss usually 
passes when the articles leave the possession of the 
supplier or are withdrawn from the United States 
Government stock. 

7. With reference to the provision of Section A 
of the Schedule annexed to the Agreement under 
Section 3 (c) of the Lend Lease Act that "those 
articles which, prior to the end of the periods au- 
thorized by law, shall have been contracted for by 
the United States Government and shall not have 
been transferred to tlie Government of Belgium 
as above set forth, shall be deemed to be trans- 
ferred to the Government of Belgium upon the 



764 



DEPARTMENT OF STATE BULLETIN 



last day of such periods", it is the understanding 
of my Government that the term "periods" refers 
to the period as now provided for by the last clause 
of Section 3 (c) of the Lend Lease Act, or as such 
period may hereafter be extended by amendment 
of that Act, during which the powers conferred 
by or pursuant to Section 3 (a) of that Act may 
be exercised to the extent necessary to carry out 
a contract or agreement made under Section 3(c) 
of that Act. 

Sincerely yours. 

Baron Kobekt Silvercruts 

Belgian Ambassador 

MEMORANDUM OF 

[Relesied to the pregs April 18] 

The Government of the United States of Amer- 
ica directs the attention of the Government of 
Belgium to the proposed agreement' under Sec- 
tion 3(c) of the Lend-Lease Act and in particular 
to Article IV thereof. Under Article IV this 
Government will review, from time to time, and 
particularly at the conclusion of hostilities in 
Europe, as determined by the President, ai'ticles 
and services set forth in the Schedule annexed to 
the Agreement in or