JULY 28, 1948
HYDE PARK, Tuesday—The other day I received a reprint of an article about Switzerland's economy, written by Professor William E. Rappard.
Switzerland more than any other nation, it seems, is conscious of the need for less restrictions in trade. She knows well that she is affected by the shortness of dollars in other countries, which prevents their buying what they otherwise might buy in Switzerland. She realizes that some countries need to struggle to set their economy in order, and as long as it is on a deficit basis they will have restrictions that affect Swiss economy as well as the whole European picture.
For instance, the curtailment of British travel has been a great loss, for Switzerland is both a summer and a winter vacation spot for the people of Great Britain. Her tourist trade in other years was one of the ways that helped the Swiss balance the budget, which today is considerably out of balance because they import far more than they export.
One of the things Switzerland needs to export in far greater quantities is her watches and for that reason, though she will not benefit directly from the Marshall Plan, she is deeply interested in the rehabilitation of other countries under the Marshall Plan. In keeping down restrictions that prevent the free flow of trade, we help to reach a point where the world is not dependent on American dollars.
For the success of the Marshall Plan in the future it seems that free trade is one of the basic needs, and this trade should extend not only to western Europe but to eastern Europe. If we set up barriers in democracies by doing as our last Congress did with the Reciprocal Trade Agreements and by increasing our trade barriers, we will force the countries that we are trying to rehabilitate under the Marshall Plan to become solely dependent on the eastern European powers and on what they can do for them.
If, on the contrary, we make trade easier for the west and east alike and we set up fewer barriers and increase as far as possible our trade treaties, extending them over longer periods so that people may have a greater sense of stability, there will be no excuse for a plea on the part of the Soviet Union for instance, that they are willing and able to offer more than we can or will offer.
I am opposed to Henry Wallace's position, which would put everything into the hands of the Soviet Union. But I believe that the key point at which we can begin some kind of better understanding is improved trade conditions. And the article by Professor Rappard has a number of points that I think might well be considered by our State Department and our economists and planners.
Whatever we do should be coordinated and as far as possible worked out through the medium of the United Nations, because I think it should be made as far-reaching as possible and as agreeable to as many nations as possible. This can be done only through U.N. cooperation. In addition, the more unilateral action we take, even in the field of economics, the less popular we will be in the world as a whole.