We and the British

...Several major sources of disagreement are discernible...

...Inter-British trade, in other words, with only two exceptions, is the greatest economic interest of the commonwealth...

...Since the reciprocity proposal of 1911, we have had no prospect of commercial understanding with Canada...

...for New Zealand, 87 and 5; for South Africa, 70 and 2; for India, 28 and 11...

...Nor have the British forgotten the Panama Canal tolls bill in 1913 or the difficult fight there was before President Wilson secured its repeal, as part and parcel of an understanding on the Mexican situation...

...The "Buy British Goods" campaign launched by the board of trade, the peregrinations of British statesmen throughout the empire urging the dominions to buy coal and textiles from old England, the "Buy Where You Sell" campaign in South America, culminating in the preferential Anglo-Argentine trade agreements secured by Lord D'Abernon, the agitation against American films as "the silent salesmen" of American goods and the film quota system launched to combat American cinematographic amusement, and the spectacular Beaverbrook campaign for empire free trade and for a high, high tariff against the rest of the world, have more than once come close to being distinctly anti-American in tone and openly prejudicial in method...

...The war-debt consciousness in Great Britain can only be compared to the Alabama Claims controversy which followed the Civil War, with the irritating difference that the war debts were funded and a schedule of repayments adopted by the free decision of England, five years after the war was over...

...The two countries have worked hand in glove to restore the gold standard and stabilize the currencies of all the former belligerents...

...Here is an urgent need for wise economic statesmanship, farm blocs to the contrary notwithstanding, which will enable the United States to sell goods in Canada on terms as favorable as those enjoyed by other non-British nations, and which will enable the Canadians to find a market for their raw materials in the United States...

...Through all and with increasing force, the United States will continue to serve as the geographical centre and the ethnological centre of gravity for the six white nations of the British commonwealth...

...The United States is merely a good third, for the European countries take over 20 percent of all British exports...

...Similarly, throughout the British empire, with the exception of a few provinces, exploitation of mineral rights and especially of oil is reserved to British companies, although British companies have been allowed virtually unrestricted rights in the United States...

...The situation is both simpler and more complex than these facts would indicate...

...The question of "imperial preference" here comes on the scene...

...The British must continue to have dealings with us so long as we produce a quarter of the world's silver, a third of the world's aluminum and phosphates, two-fifths of the world's lead and zinc, over half of the world's copper, over two-thirds of the world's petroleum, over five-sixths of the world's sulphur, as well as half of the world's cotton and a quarter of the world's wheat...

...Carter defends this view, showing that social, economic and political events have given the situation a new significance...

...it is more complex because, of the world's 160,000,000-raore or less-English-speaking white peoples, over 95,000,000 are found in the United States, while the balance is distributed among six different British nations...

...It is simpler because the direction of these masses of men is, for all practical purposes, under the control of the English-speaking races...

...On the one side, then, stand British monopoly and British free trade...

...In the following paper Mr...

...for Malaya, 23 and 47...

...Whatever commercial treaty system we adopt with the British nations must take account of this fact and must only propose that we share equally in all favors extended to non-British nations, such, for example, as the advantages which Canada extends to France and those which South Africa has recently given to Germany...

...WE AND THE BRITISH By JOHN CARTER More than one reason exists for believing that relations between the United States and Great Britain constitute the hub round which international diplomacy is turning...

...The Editors...

...British public opinion has resented the repayment of the $4,500,000,000 war loans which the British government borrowed from the United States government, and has tended to blame the United States both for the heavy taxation which followed the war and for all other financial difficulties which the United Kingdom has experienced since the armistice...

...Whether such a treaty is a multilateral instrument or a set of separate treaties with the individual dominions, something is needed to regularize the existing commercial relations between us and the British...

...it will never be entirely abandoned...

...The American Revolution was more than a political upheaval...

...The shoe is pinching both feet...

...Similarly, the reservation of the coastwise trade to vessels of American registry finds no counterpart in British practice...

...In other British dominions the situation is similar, though less important...

...Our attempts to promote an American merchant marine, with government assistance, have further exasperated the hard-pressed British shipping interests and have depressed rates to an uneconomic level in many trades...

...American capital is invested in British industries throughout the world...

...nearly 130,000,000 souls are governed from Washington...

...We must be prepared, however, whenever we regularize this undeniable interdependence, to recognize that the British have several causes for complaint against us...

...It is, however, in the ordinary business relationships between the Americans and the British that there is most need for readjustment...

...The Federal Reserve cut the rediscount rate to 3.5 percent in 1927, thereby courting the recent disastrous period of speculation, in order to facilitate the export of gold to Great Britain...

...The Hawley-Smoot bill removed this provision, indicating that we are ready to deal with the British commonwealth on the basis of recognizing "imperial preference...

...Adjustments are necessary and will come in time, the most important being a set of new treaty arrangements with the British commonwealth, which will give international sanction to the practice of British imperial preference and which will accord a fair opportunity to American trade...

...Of our $5,000,-000,000 of exports, over $2,000,000,000 are to the British nations, and more than half of this goes to countries other than the United Kingdom...

...Yet such a formula is becoming increasingly necessary...

...From one point of view, this is a new situation so far as the United States is concerned...

...Nevertheless, on the basis of rock-bottom economic facts, the United States and the British commonwealth must remain on intimate commercial terms...

...We cannot expect the British to relax their economic exclusiveness in the field of production, if we are not prepared sensibly to modify exclusive policy in the field of trade...

...for Ceylon, 55 and 24...

...While our ships have the run of British ports, British ships enjoy no comparable privileges in ours...

...IN THE maintenance and development of mutually advantageous economic relations between the United States and the British commonwealth of nations lies the future prosperity of the greater part of the human race...

...Each of these systems is complementary to the other, each depends upon the other, each ought to understand the other...

...Shall we admit that it is natural and proper for British countries to extend to each other preferential treatment to the disadvantage of American trade...

...The high American tariff is, in itself, a constant affront to the British belief in the value of free trade, both for themselves and for others...

...Under the Fordney tariff of 1922, "imperial preference" is regarded as unfriendly discrimination and the President is authorized to retaliate...

...only after the war did the protective system, which already existed in the dominions, extend to the British Isles, with the Safeguarding of Industries Act...

...For eighty years, the British clung to free trade...

...Since that treaty was signed, five new self-governing British nations have come into existence-Canada, Australia, New Zealand, South Africa and the Irish Free State-while London is now debating the possibility of giving India also the status of a dominion, and similar developments in British East Africa may add a seventh nation...

...it marked a divergence in economic thought between the empire and the republic as serious in its sphere as was the Protestant Reformation and the Catholic Counter-Reformation in the religious sphere...

...When the stock market went to pieces, the first British reaction was-humanly enough-one of relief that our bloated prosperity had come a tumble, the second and the lasting reaction was one of concern, sympathy and apprehension, as values declined on the London and Montreal exchanges and as it became evident that the Anglo-Saxon world was a financial unit...

...On the other hand, close relations have been developed between the Federal Reserve and the Bank of England...

...American business and American investments have multiplied throughout the United Kingdom, Canada, Australia, New Zealand and generally throughout the empire...

...In consequence, the United States is the centre of gravity of the Anglo-Saxon race, while India, with its 300,-000,000 people, remains the commercial centre of gravity of the British commonwealth...

...To generalize in a field which has hitherto been left well enough alone, the most pressing need in British-American economic relations is the need to realize that there are two distinct systems involved, distinct in theory, distinct in practice...

...To discover a formula for readjustment in this field will be difficult...

...The case for imperial preference rests upon too solid an economic and political basis for the United States to challenge it effectively...

...Of the commonwealth's $9,000,000,000 worth of exports, $1,368,000,000-16 percent-go to the United States, while $3,271,000,000-38 percent-go to other British countries...

...Determined efforts have been made to deprive American stockholders of voting and other rights in British companies...

...We have even considered reserving the Philippine-American trade to our own ships, and have done so in the case of the Samoan-American trade, notwithstanding previous treaty engagements...

...Now that there is prospect of raising the American tariff, the Canadians feel aggrieved, and have debated extending the preference already given to British goods...

...In using these expressions, "British" is applied to the entire commonwealth of nations, including the United Kingdom, "domestic" to the inter-imperial relations of the commonwealth, and "foreign" to the non-imperial phase of policy...

...With the Shell group obtaining the bulk of its production from American wells, the refusal of the British to permit the American companies to operate in British oil fields, and the determined diplomatic support British governments have given to the Shell interests outside the empire, have produced a potentially ugly situation...

...In the financial field as well, the British feel that they have been hardly used...

...While the British General Electric case was the most dramatic of these incidents, the board of directors having attempted to deny valuable subscription rights to its American shareholders, the case of the Argentine railways is more interesting...

...We cannot get along without the British, who control three-fifths of the world's cocoa production, two-thirds of the world's tea, 99.9 percent of the world's jute, nearly half of the world's wool, nearly three-fifths of the world's rubber, three-fourths of the world's gold and tin, and nine-tenths of the world's nickel...

...A new commercial treaty system between the United States and the British nations is one of the outstanding needs of the present age...

...The bickerings and animosities over war debts, commercial competition, and oil concessions, will die down and new bickerings for different stakes will take their place...

...Nevertheless, it so happens that we enjoy commercial treaty relations with British Europe alone...

...Over a quarter of humanity owe allegiance to the British crown...

...Our treaty relations with the British are regulated by the old treaty of 1815...

...Incidents have been multiplying in recent years indicating friction of a sort which might easily become quite serious unless it is dealt with in time...

...This factor in British public opinion has put a severe strain upon friendly financial relations between the two peoples...

...Nevertheless the British and American economic systems are "each complementary to the other, each depends upon the other, each ought to understand the other...

...The extravagant productive energies of the Americans were freed from conservative control and careened off into economic space in an undisciplined riot of production and exploitation of natural resources...

...Unfortunately for the hopes of the anti-British alarmists, we are each so essential to the other, we can each inflict such economic injury to the other, our financial life is so linked together, that we really dare not and care not to be anything but economic friends...

...The British have maintained a monopolistic view of production, have clung to the system of exclusive concessions for productive enterprise, and have tempered their exclusiveness with freedom of trade...

...for Canada, 37 and 39...

...Rumors had previously been circulated to the effect that American interests were endeavoring to acquire control, and the reason for maintaining British control was alleged to be the desire of the railroad to continue to order supplies from Great Britain, irrespective of expense...

...Thus it is that British "domestic" policy is concentrated on the defense, exploitation and sea communications of India and the basin of the Indian Ocean, while British "foreign" policy is largely concerned with adjusting the relations of the commonwealth of nations with the United States...

...Deprived of and aghast at the reckless spirit of enterprise which subsequently characterized American economic development, the British tended to hoard their resources and to foster productive monopolies while the Americans were wasting their own resources in unrestrained competition...

...Canada now charges us her highest customs duties and may raise them even higher...

...As an offset to this system of competitive exploitation, we established and have maintained for nearly seventy years a high protective tariff...

...The British directors of the Buenos Ayres and Pacific Railway voted, amid cheers, to deny voting rights to shareholders of other than British or Argentine nationality...

...This denial of reciprocity was an essential feature of the "oil war," in which Sir Henri Deterding and the Shell combine fought Standard all over the globe, from the Isthmus of Panama to Russia, Palestine, Iraq and the Dutch East Indies...

...The treaty of 1815 is out of date...

...For Australia, the percentages are 41 and 13 respectively...

...American foreign investments have risen rapidly, while New York has supplanted London as the centre for certain types of financing...

...On the contrary, we will probably adopt some of its essential features in order to protect our remaining resources from indiscriminate and unrestrained exploitation...

...From the British point of view this is essential...

...on the other stand American free competition and American protectionism...

...Forty percent of the exports of the United Kingdom go to British countries, only 6.4 percent to the United States...

...Recent American stock speculation and high rediscount rates have put British exchange under a heavy strain and have drained the British gold reserves...

...The result has been the development of two diametrically opposite systems...

...together the American and British peoples exert a decisive economic influence over the greater part of the globe...

...The effort to revive British trade has induced the British to adopt some fairly desperate expedients...

...And whatever happens, the British commonwealth and the United States will continue to buy each other's goods in increasing quantities just as though neither realized that, according to Communist dogma, they should regard each other as deadly economic enemies...

...For eleven years the reciprocity offer remained upon our statute books and Canada declined to take advantage of it...

...As this is written, word comes that a Japanese credit has been arranged, half in England and half in the United States, to enable Japan to resume gold payments for the first time since the war...

...This treaty, naturally, did not apply to the British commonwealth, because the commonwealth was not then in existence...

...At the same time, the United States launched upon a program of reckless production which has deforested a dozen states, is draining away our petroleum resources, and has turned our abundance of coal into a positive curse to those engaged in mining...

...The British pound was nursed back to parity with the dollar and gold payments were resumed with the help of American credits...

...The same schism reinforced the ultraconservative tendencies of the British people...

...The relaxation of the British monopolistic system is on the way...

...Then there has been the question of commercial propaganda...

...In Australia, New Zealand and South Africa, there is actual discrimination against us and, because of the absence of treaties, we are unabie to protect our natural interests...

...Large sums of British capital shared largely in the profitable call money market on Wall Street, and are snugly invested in American securities...

...The British will move away from free trade toward protection and we will, in time, move from protection toward free trade...