INTERNATIONAL: Universal Crisis

(See front cover)

Let observation with extensive view

Survey mankind, from China to Peru.

—Dr. Johnson.

From 35 countries, 1,000 business leaders went to Washington, D. C. last week, surveyed with extensive view what their president, onetime Belgian Prime Minister Georges Theunis, called THIS UNIVERSAL CRISIS. Never before since Business began have businessmen from almost everywhere publicly acknowledged that almost everywhere there is Depression, resolutely set themselves to grapple 1,000 strong with the economic troubles not of one race or region but of all mankind.

The great grapple was exciting. Officially it was termed the Sixth Biennial Congress of the International Chamber of Commerce (I. C. C.). Grapplers for the U. S. included President Hoover, Secretary Mellon and two vigorous Chicago citizens, Lawyer Silas Hardy Strawn, Chief U. S. Delegate to the Conference, and persuasive Melvin Alvah (“Mel”) Traylor, president of Chicago’s First National Bank, famed for his able work in setting up Europe’s Bank for International Settlements (TIMESept. 23, 1929, et seq.).

The game of Messrs Hoover, Mellon, Strawn and Traylor last week was defensive. They were out to block efforts by European business leaders to stampede the Congress against (U. S.) high tariffs and in favor of (U. S.)cancellation of War debts.

War Debt Grapple. Just so long and no longer will a group of European businessmen keep still about “Uncle Shylock.” The Hoover and Mellon speeches (see below), the daily struggles of Messrs Strawn and Traylor to steer the Congress steering committee, merely postponed the inevitable. Germans grumbled all week behind the scenes about what they now call not War debts but “international obligations.” The French and Italians got in their able digs. But eventually the British Delegation took over in a fatherly way the job of making U. S. expectations that Europe will pay part of what she owes, seem as niggardly, as ungracious and as hateful as possible in U. S. eyes.

“The people of the great nation whose guests we are,” declared British Delegate Henry Bell, a director of Lloyds Bank, Ltd. “are magnificent hosts, but they are awfully poor customers. . . . America sells twice as much to Europe as it will take in exchange. We come here today— I am sure without offending our friends at all—to put it up to them . . . whether they don’t feel that in regard to [Europe’s] debt . . . a rather larger, a rather kinder, a rather better attitude might be taken.”

As well might U. S. statesmen call on Europe to take a rather larger, a rather kinder, a rather better attitude. But the only direct U. S. rebuttal in Washington last week was a yelp of mental pain, quite lacking in dignified rebuke or injured moral rectitude. Yelped Representative Bertrand H. Snell, onetime upstate New York cheesemaker, chairman of the House Rules Committee: “Why is it that when a group of internationalists get together, they always decide that Uncle Sam must be the goat?”

Tariff Grapple. In Europe’s onslaught against U. S. tariffs last week Briton Bell also led. Too much of a gentleman to flay by name the country in which he was a guest, Banker Bell politely remarked: ”Tariffs, as I see them, are the intrusion into economic well-being of the cannon and the machine gun, the high explosive, the poison gas.

“They appear to be, in addition, a socialistic blunder. Some one is empowered by government action—and such action is by no means always just or sensible—to prevent me buying and selling what I want, whence I want, in such a sort and quantity and price as I need for the conduct of my business and the provision of my livelihood. . . . I resent . . . interference. Even if I misjudge, I am entitled to my misjudgment.”

Hoover on “Gigantic Waste.” In contrast to eager European babble about cancelling what is owed the U. S. (some eleven billion dollars) the international congress received in stony silence last week what President Hoover had to say. He pointed out that nearly five billion dollars are being spent every year on armaments, an increase of about 70% over that previous to the Great War. This stupendous annual expense is 20 times greater than Europe’s annual payments to the U. S. President Hoover’s conclusion:

“Reduction of this gigantic waste of competition in military establishments is . . . of an importance transcendent over all other forms of . . . economic efforts!”

Thus the President avoided mention of Debts, Tariffs, Silver and every othersubject on the agenda of the I. C. C. and sprang as a neat surprise the syllogism that the way out of Depression is via Disarmament.

The only trouble with asking an international congress of businessmen to act on such a syllogism is that businessmen are accustomed to think of Disarmament as political, as no business of theirs, as the business of statesmen. Wailed Chicagoan Strawn, who in other respects cooperated closely with the President last week: “The minute the International Chamber of Commerce touches politics we’re through!”

Stockmarket Flayed. Gambling in stocks is international. Britons, Germans, Frenchmen, the King of Spain, Chinese, the King of Afghanistan and speculators of every race were participants in the U. S. crash of 1929. Naturally, last week, the most popular speech at the Conference the only one interrupted by incessant laughter and cheers was a great flaying of the New York stockmarket by Chicago’s droll, drawling “Mel” Traylor.

Banker Traylor, of course, does not “trade,” “speculate,” or “scalp” in the market. As from an Olympian distance the president of Chicago’s First National Bank declared: “I would urge consideration of the complete abolishment of floor trading which, as I am informed, has about it most of the characteristics of plain crap shooting (guffaws), and few, if any, more redeeming features than that delightful Ethiopian pastime.” (Cheers. Of the 1,000 business leaders present some 600 were Americans.)

No prude, Mr. Traylor modified his strictures to the extent of saying that a man who trades in $10,000 sums should be permitted to continue such crap-shooting de luxe. But “scrubwomen, day laborers, small home owners, wives and youths” must be barred by law from market speculation.

Silver Grapple. While the Debt and Tariff grapples were straight U. S. v. Europe contests, everyone had something to say last week about the catastrophic fall in Silver’s price,a world problem primarily affecting Asia.

Asia’s grapplers made the politest speeches. But all flayed the West by implication for doing nothing to check Silver’s collapse.

Japan’s grappler was President Kenkichi Kagami of Nippon Yusen Kaisha, the Japanese Mail Steamship Co., largest, most luxurious operated by Asiatics. Bland, bespectacled, slightly plump, Mr. Kagami, an incessant smoker of U. S. cigarettes got his technical training in the Occident, sailed home to become an executive genius of Japan’s No. 2 house of merchant princes, the Mitsubishi, which controls the N. Y. K. (No. 1 is the House of Mitsui.)

In Japan potent President Kagami has a system of working from wooden boxes. One box for all papers about this, another box for all papers about that. Last week Mr. Kagami dipped into his wooden box on Silver and addressed the Congress thus:

“My own country, Japan, after many years’ lingering over the question of weak and fluctuating currency situation decided on a return to the gold standard. … No sooner had this courageous decision been put into execution, than the world over Depression became more pronounced and caught Japan with all its force. It has proved to be something like jumping out of the frying pan into a conflagration fire. . . .

“Any scheme for control of the price of silver must be considered in conjunction with what monetary policy may best be adopted in China. . . . It is certainly beyond the ability of an individual or an institution or a government body other than China herself, to formulate any plan for the stabilization of silver currency for use in China.”

Thus a spokesman for small, strong Japan momentously proclaimed noninterference with large, weak China on the silver issue. For China spoke keen, aggressive young Tsuyee Pei, president of the Bank of China.

“As you all, no doubt, know,” amiably began President Pei, “silver represents the wealth and savings of more than one half of the world’s population. . . . The lack of confidence in silver as a precious metal by the peoples of the world . . . has a great deal more to do with . . .Depression than many are willing to recognize.”

Softly Mr. Pei next breathed a threat that if Occidental countries do not cooperate with China in rehabilitating silver she may retaliate by an embargo against all silver imports. Today China buys more silver than any other country, and the Occident is anxious to sell. But Threatener Pei hastily added that China is still open, wide open, to any and all favorable offers. These he proposed to crystallize by calling under I. C. C. auspices an International Silver Conference later this year. In 48 hours this Pei plan was whipped into shape—Senator King of Utah (silver State) aiding—and on the last day was passed by the Congress. Score one for Asia’s grapplers with Depression.

For India spoke a close friend of Mahatma Gandhi but by no means his representative, Mr. S. R. Bomanji, representative in London of the Indian Chamber of Commerce. “The silver conference will be called,” said India’s Bomanji bitterly, “but my country’s delegates will not be heard. Such a conference was held at Geneva but when we wished to appear, the British chairman of the British delegation said to us, ‘I am chairman and I shall name those who will speak.’ We were not heard.”

Soul of Andrew Mellon. Painfully conscious that people call him a “Capitalist,” wincing at the term, U. S. Secretary of the Treasury Mellon, after giving the Congress to understand that further Debt concessions to Europe are not to be considered, bared his fiscal soul thus:

“Capitalism or whatever name may be applied to the system which has been evolved in adapting individual initiative to the machine age has defects, of course, and may be, as has been suggested, still in its infancy, but there is no disputing the fact that it has produced an abundance of food and clothing. . . .

“Defects in the present system we shall overcome by degrees … so that we shall not always have the painful spectacle of men willing to work but unable to find a market for the only commodity which they can exchange for food and clothing which they need and which the world can produce in such abundance.”

Thus the Secretary of the Treasury made coldly a point which red-hot Communists consider one of their best; namely that Capitalism in its present form tends to create a periodic surplus of good things, yet leaves the worker destitute at such periods amid the abundance he has helped create. Mr. Mellon, perhaps not caring that Moscow would gloat over his words, made abrupt transition to his concluding statement that “the standard of living which obtains in this country . . . must be maintained at all costs. . . . In fact the ultimate solution of the world’s difficulties would seem to lie in the possibility of building up a higher standard.”

Points by Bigwigs, “We cannot conceive the saint, the hero, the poet or the artist seated before the calculating machine,” complained Italy’s Alberto Pirelli, one of her three richest men. “The outer life is killing the inner. . . . Vulcan has killed Apollo!”

“Nothing could be further from the fact,” boomed Dennis F. Kelly,incorporator of Chicago’s coming World’s Fair (1933)> “than the viewpoint of many Americans as to the origin of the modern department store, who erroneously consider it to be an American institution born and bred.” As president of the National Retail Dry Goods Association, Mr. Kelly handsomely declared that “The Bon Marche in Paris, established in 1852, was the first general store to be operated along departmentalized lines.”

Of U. S. automobiles Britain’s Dr. William H. Coates. famed economist, said: “When efficiency is very high, exports are natural. . . . The rest of the world wants to benefit by that efficiency. It wants American cars; they are good. But we shall shut them out if you will not take the products of our efficiency, whatever be their nationality.”

Only Latin American country to be represented at the congress was Chile. Her Ambassador to the U. S., Don Carlos Davila, gloomed that imports by Chile of U. S. automobiles were off 90% at the beginning of 1931; hinted that all Latin America is tightening its belt, doing without luxuries; explained that due to Depression the total sum which Latin America received last year for all her exports was 33% less than in 1929.

Showdown Sessions. Members of the International Chamber point with most pride to its General Resolution of 1923 and claim with some justice that it gave an impetus which eventually produced the Dawes Plan. Last week in a secret showdown the night before the Conference adjourned Mr. Strawn and others of the steering committee managed to agree on a General Resolution for 1931 which was quietly adopted next day, embracing three major resolutions:

1) A bow to President Hoover: “. . . The International Chamber commends the efforts being made by the governments of the world to reduce armaments to the lowest possible limit and urges that [this effort] should be redoubled. . . .”

2) A backward and forward bow, to both the U. S. and Europe: “International obligations have been made definite in amount and in terms as between nations. The integrity of such obligations is always fundamental to the maintenance of international credit and to the expansion of commerce and industry. The observance of this essential principle, however, is not inconsistent with an impartial examination of the effects of these obligations on international trade, if warranted by changed economic conditions. . . .”

3) A bow presenting the congress’ rear to tariffs: “National and international trade should be encouraged by the removal of every obstacle possible. Tariffs should not discriminate unfairly between nations. . . .”

Mighty Mendelssohn. The House of Rothschild is not so great in Germany today as the House of Mendelssohn. Bankers to the House of Romanov up to 1914, Mendelssohn & Co. suffered temporary eclipse when Germany declared war on Russia, later emerged more potent than before. Sixty-five years old, tall, clean-shaven and of impressive mien, Franz von Mendelssohn did not go to Washington last week. He addressed the congress, whose president he will be next year, from Berlin. “My voice,” said Mighty Mendelssohn, “as that of a single individual coming across the ocean, is weak and feeble. But I remind you that other voices are making the same appeal . . . the voices of . . . the 20,000,000 unemployed in the world.

“The well-being of the creditor is endangered when the debtor is crushed under his burden. . . . The seller needs the purchasing power of the buyer. There is no method by which economic wellbeing can be permanently isolated in one country. . . .

“Business is in extraordinary straits, such as it has hardly ever been in before. But equally extraordinary are the possibilities given to the leaders of business to release it from these straits, to convert scientific progress into progress in wellbeing, and to convert the riches of the earth which this progress has rendered available but which, owing to the present overproduction, seem almost to be a curse, into real riches and blessings for mankind.”*

Manhattan radio stations, deeming the speech of Mighty Mendelssohn of small importance, cancelled it at the last moment. It went by cable, radiotelephone, and land wire to 2,000 head phones clamped on the ears of the 1,000 delegates. Having heard, they went to their 1,000 homes.

*More ominous was another German voice heard last week, that of Oswald Spengler, long worded philosopher, who has prognosticated The Decline of the West (1918). Said he at Munich, in a speech supposed to do honor to Thomas Alva Edison:

“The progress theory of the 19th Century is buried. All progress is followed by decline. We have reached the end of the age of technique, which has tremendously increased the struggle for existence. . . .

“Man in inventing machines estranged himself from nature, who is now having her terrible revenge by making him the slave of his own inventions. . . .

“All that is left to us is to hold on, struggle on and not resign in view of the sad future.”