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FOREIGN RELATIONS AND OVERSEA 
 
 TRADE 
 
 Addreu before " 
 
 The Southern Commercial Gongress 
 Muskogee, Oklahoma, AfJnl 30th, 1915 
 
 ',?. by, > 
 
 WILLARD STRAIGHT. 
 
 repie<enting the 
 National Foteign Trade Council. 
 
 NEW YORK 
 1915 
 
Cornell University 
 Library 
 
 The original of tiiis book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924011367244 
 
FOREIGN RELATIONS AND OVERSEA 
 
 TRADE 
 
 Address before 
 
 The Southern Commercial Congress 
 Muskogee, Oklahoma, April 30th, 1915 
 
 WILLARD STRAIGHT, 
 
 representing the 
 
 National Foreign Trade Council. 
 
 NEW YORK 
 1915 
 

FOREIGN RELATIONS AND OVERSEA TRADE 
 
 Address before the Southern Commercial Congress, Muskogee, Oklahoma, 
 April 30th, 1915, by Mr. Willard Straight, representing the National Foreign 
 
 Trade Council. 
 
 As good Americans and businessmen, you will agree that 
 we wish to preserve friendly relations with all the world and 
 increase our foreign trade. Taking this for granted, how may 
 we best realize our desires? Having once determined what 
 you want, you set about to get it. The most eflFective method, 
 you will admit, is to study your problem, anticipate probable 
 and possible difficulties, and make your plans accordingly. 
 You take stock of your own abilities, remedy your deficiencies 
 where you can, and with preparations complete embark upon 
 your enterprise. This, Gentlemen, is my text. 
 
 I have already expressed to Dr. Owens, your genial and able 
 Managing Director, and through him to your Governing 
 Board, my appreciation of their invitation to be present on 
 this occasion. They and you have done me great honor in 
 permitting me to address you. It. is a privilege to be here, 
 and an opportunity. History is in the making. Gentlemen, 
 and the mills of the Gods are not only grinding exceeding 
 small, but exceeding fast at the present time. Our position 
 in world affairs may be very largely determined by the course 
 which we now follow. We have reached the period in which, 
 as Bismarck prophesied many years ago, we are to undergo 
 the real test of the American Democracy. Our broad lands 
 are rapidly being filled. The period of exploitation is past. 
 The age upon which we are entering will be one of conserva- 
 
tion, of co-operation, of the international division of labor. 
 The various elements in our national life must be co-ordinated 
 to serve a common and national end. Our exports of 
 raw material in normal times no longer wholly suffice to 
 pay for our imports from abroad. Our domestic consump- 
 tion of foodstuffs and other raw products grows larger each 
 year, and we are in consequence increasingly interested in the 
 selling of our manufactured goods to maintain our trade 
 balance. A trade opportunity brings with it a diplomatic re- 
 sponsibility. The extension of this foreign trade, which we so 
 urgently require, is in no small measure dependent upon the 
 conduct of our foreign relations. I shall, therefor, if you 
 will permit me, call to your attention certain facts — ^not upon 
 the assumption that you are unfamiliar therewith, but in the 
 hope that an attempt to show the interaction of diplomacy 
 and foreign trade may be of interest. 
 
 The progress of the world has been marked by the discovery 
 and co-ordination of forces whose existence and mutual bearing 
 had been previously unsuspected. Just as Science has demon- 
 strated synthetic relationships of which we had been uncon- 
 scious, so the war which is now devastating Europe has made us 
 suddenly aware that we are not after all isolated from the rest 
 of the world, or by any means independent of each other. 
 You gentlemen of the South who saw a bumper cotton crop 
 held up by the closure of your European markets, have been 
 made very keenly ahve to this situation. The Eastern bankers 
 who rehed upon your annual shipments to meet the drain 
 of funds caused by tourists expenditure in Em-ope and interest 
 falling due on American securities held abroad, moreover, 
 found themselves greatly embarrassed by your— which has 
 also been their— predicament. The war, in fact, has X-rayed 
 the body poHtic, and shown to us the delicately adjusted, 
 closely articulated commercial and financial structure which 
 sustains the vastly diversified business of our country. 
 
 Our premises then rest on the following facts: We wish 
 
to, because we must, develop our foreign trade. This devel- 
 opment to be permanently successful must be accompanied by 
 a more general understanding of the importance of foreign 
 relations. Like our overseas trade, our diplomatic policy there- 
 fore affects no one section of the country and no one phase of 
 our national life, but is directly or indirectly the concern of 
 the whole country and all the people. With this statement 
 I believe you will agree. That being the case what are we 
 going to do about it? 
 
 Our attention at the present time, insofar as it is not con- 
 fined to our own immediate affairs, is very largely concen- 
 trated on the trenches in Western Europe, on the battlefields 
 of East Prussia, on the operations in the Dardanelles, and on 
 the diplomatic correspondence which our Government has 
 been exchanging with the various belligerents. This is natural. 
 The true significance of these events, however, lies not in their 
 present military interest, but in the probable effect of the 
 forces now in conflict, and of the forces which this war has 
 called into being, upon the political and economic future. The 
 clash has been long inevitable, and its result for some years at 
 least, we hope, will be decisive. It is this result consecrated 
 on a hundred battlefields — ^not the battles themselves, that 
 will affect the United States. Our commercial genius and our 
 statesmanship therefore must understand the present and 
 the past in order intelligently to anticipate the future. 
 
 The struggles which marked the close of the eighteenth and 
 the beginning of the nineteenth centuries were the military 
 climax of a ferment which bred our own and the French 
 Revolution, and which found renewed expression in the events 
 of 1830 and 1848. Despite the period of reaction which im- 
 mediately followed the Congress of Vienna, the Napoleonic wars 
 had sealed the fate of absolute monarchy and marked the begin- 
 ning of constitutional government in Central Europe. We are 
 now witnessing a continuation of the same conflict, which is as old 
 as history and will persist when we are gone. It is in its present 
 manifestation an issue between a paternalism of which militar- 
 ism is but a phase, and democracy; between two conceptions of 
 
the State as the master or as the servant of the people. For 
 us it is vitally important to observe that Democracy to meet 
 Paternalism is adopting of its own volition the centralized 
 national organization which Paternalism has imposed. Both 
 England and France, like Germany, are no longer armed 
 nations, but nations in arms. Every interest in German 
 national life has been co-ordinated under Government con- 
 trol. It is the remarkable efficiency of this administrative 
 machinery which has enabled her to stand the crucial test so 
 well. The military and naval establishments are but one 
 portion of a complex system which enables the State to gather 
 copper from the village kitchens, administer the grain supply, 
 order the conservation of potato-peelings and the slaughter 
 of pigs which might otherwise consume the cereal needed for 
 the food of the people. 
 
 To-day the French and British democracies are themselves 
 constructing similar mechanisms, not as yet so elaborate, but 
 effective in meeting each situation as it may arise. Railway 
 and steamship lines are in effect under Government control. 
 A series of measures, brilliant alike in conception and execu- 
 tion, have not only enabled the British banking system to 
 withstand the sudden shock of war, but have kept the London 
 discount market open for financing Great Britain's foreign 
 trade. War loans have been issued in England and France, 
 as well as Germany, to an amount which almost staggers the 
 imagination, and arrangements have been made between the 
 Finance Ministers of Great Britain, Russia and France for 
 a joint policy by which the three great Allied Govern- 
 ments will meet their own problems and jointly assist in 
 financing some of their weaker fellows. The British Treasury 
 supervises the London, the French Government the Paris, 
 Stock Exchange. In order that the nation's financial resource! 
 may be conserved for the prosecution of the war no new 
 foreign loans may be issued in London without the special 
 authorization of the British Treasury. The French Govern- 
 ment has for some years exercised a similar power. Besides 
 
extending their control over finance and transportation, 
 the European Governments have in many cases actually as- 
 sumed, or been empowered to assume, the direction of the 
 manufacture of goods required for the war. A system is 
 being developed which is practically the organization of 
 labor into a national industrial reserve quite as important 
 as the military reserves which guard lines of communication 
 instead of actually being engaged on the firing line. And 
 now further to increase national efficiency the sale of vodka 
 and absinthe has been forbidden in Russia and France, and 
 prohibition in absolute or modified form is advocated in 
 Great Britain. 
 
 These steps towards the socialization of the State — not 
 State Socialism — once taken are not likely to be retraced. 
 The value of co-operative effort will be conclusively demon- 
 strated and will be as valuable in the readjustment which will 
 follow the war as it is essential to its successful prosecution. 
 
 When the war is over there may, perhaps, be a period of 
 political reaction and of financial and industrial depression 
 throughout Europe. Industry must absorb again the men who 
 are now serving in the field. German foreign trade will be 
 disorganized. The Russian market which has been vitally 
 important will, it is said, be closed as far as possible to German 
 goods. Great Britain's world wide commerce, which has de- 
 pended largely upon the ability of the London market to finance 
 the foreign consumer, may not flourish as before, because — ^for 
 a time at least — capital will be required at home and may not be 
 available for foreign development. Yet this dislocation may not 
 be attended by results as serious as some suppose, because 
 the output of the factories will be required in no small measure 
 to make up for the wastage of the war. The whole world, 
 moreover — commercial and financial at least — ^has been in- 
 volved in the present crisis. Where all are affected there is 
 a greater likelihood that some common measures will be found 
 gradually, and with a minimum of hardship, to meet new 
 conditions. Therefore, while numberless individuals and lo- 
 
calities may be impoverished, it would seem likely that the 
 world as a whole, though it will suffer, will do so because 
 developments which would have been undertaken will not now 
 be attempted, rather than because of the actual destruction 
 that has taken place. 
 
 From the American point of view the most important result 
 of the war will be not the possible temporary financial, com- 
 mercial and industrial embarrassment in Europe, but the 
 impetus which has been given to more effective national 
 organization in Great Britain and France, as well as in Ger- 
 many. There will be a new Russia, a consolidated Italy, 
 disciplined and alert States in the Balkans and Scandinavia, 
 and Japan self-confident and self-conscious in the fulfillment 
 of her Imperial destiny. 
 
 These are the facts by which we will be confronted and 
 with which we must be prepared to deal. What is our 
 position? 
 
 Following the outbreak of hostilities in Europe in August 
 last, we ourselves to a certain extent learned the value and 
 necessity of co-operation. 
 
 Luckily for us, the Federal Reserve Board had been ap- 
 pointed before the crisis came. These gentlemen promptly 
 mobilized the banking interests of the country. A syndi- 
 cate took care of the New York City debt. The so- 
 called gold and cotton " pools " were formed to pay what we 
 owed abroad and to look after the interests of the South. 
 Then, as if by magic, thanks to our enormous exports, the 
 situation was reversed. Where eight months ago it was esti- 
 mated that we owed Europe three hundred millions of dollars 
 in immediate maturities, it is claimed that, without considering 
 the debit against us because of foreign holdings of American 
 securities, we now have something like six hundred millions 
 due us from the other side. The dislocation of the European 
 exchanges, moratoria, and the urgent necessities of our mer- 
 chants and our customers, have enabled us, under the provisions 
 
of the Federal Reserve Act in a few months to develop a dis- 
 count market which, under ordinary circumstances, would have 
 taken us a much longer period to acquire. Through this channel 
 we are financing shipments of goodsto and from the United States. 
 Our access to European capital has been cut off, but reserves 
 heretofore unavailable, have been released and we are easily 
 absorbing such American securities as Europe wishes to sell. 
 At the same time, in order to stabilize exchange we are stimu- 
 lating and facilitating our export trade by granting credits to 
 Europe to pay for goods purchased in this country. For the 
 first time in our history we are through these very necessary 
 operations establishing a market for foreign loans. This edu- 
 cation of our public, should make it possible for our 
 bankers later to undertake transactions which, by encour- 
 aging development particularly in South America, and 
 perhaps in Russia, will create new markets for American 
 goods. Thus our investors in addition to securing a satisfactory 
 interest return will be utilizing American nioney for the benefit 
 of American industry. 
 
 These recent developments afford an assurance that what 
 has heretofore been the most serious obstacle to the extension 
 of our foreign trade, is now in a fair way to being overcome. 
 We have been accustomed to finance our production. We 
 are now learning to finance the distribution of our goods through 
 the " acceptance " and sale of Bills of Exchange, and the public, 
 by the purchase of foreign securities, is playing its part in 
 granting the credits which our customers require. 
 
 The perfection of our selling methods abroad, however, is 
 still a matter demanding careful attention. The President, in 
 his recent address before the United States Chamber of Com- 
 merce at Washington, discussed the manner in which our 
 manufacturers might combine in selling organizations for the 
 promotion of their export business . The inhibition placed upon 
 the development of foreign trade by the Sherman Law and the 
 Clayton Bill must be removed if American industry in the 
 
future is successfully to compete with the foreign combina- 
 tions, which have been and will be developed. This is a prob- 
 lem for the new Federal Trade Commission to solve. 
 
 There is also the question of transportation. The Gov- 
 ernment Shipping Bill was suggested to meet a temporary 
 aggravation of a situation which has long existed. I shall not 
 venture an opinion as to whether or not it would have been 
 successful. One thing, however, is clear; Transportation is 
 a commodity like any other. In our industry we have by a 
 protective tariff assured a certain standard of living to the 
 American workman, and even under the high cost imposed by 
 our navigation laws we have been able to operate vessels in 
 the coast-wise trade by reserving it exclusively for American 
 shipping. But this is impossible in foreign trade where the 
 business of selling transportation is highly competitive. We 
 may be able, despite our high labor costs, to market our 
 manufactured goods abroad because the efficiency of our work- 
 men and the labor-saving devices which we use enable us to 
 keep down the cost of production. But in shipping not only 
 is there no labor-saving machinery, but our navigation laws 
 make it necessary for American ships to carry larger crews than 
 are required to man foreign vesssels. If we wish to transport 
 our goods under the American, rather than the British or the 
 German, the Dutch or the Norwegian, flag, we must be pre- 
 pared to furnish transportation at competitive prices. This 
 can be done in one of two ways: either by permitting American 
 shipowners to purchase and operate vessels on the same basis 
 as their competitors as to the cost of construction and labor 
 charges; or by empowering the Goverment to bear the difference 
 between the cost of ships and labor in the open world market 
 and the cost thereof under our own tariff and navigation laws. 
 Whether the Government meets this cost by subsidy or by 
 itself buying or building ships involves the question of public 
 or private ownership, not the charge upon the taxpayer. The 
 difference is in name, not in substance, for subsidy— like 
 Government ownership— means that the pubUe pays the 
 
charges which are imposed in the interest of labor. The only 
 difference lies in the fact that a subsidy might encourage 
 investment in a business which has not heretofore promised 
 any interest return, except where, as has frequently been done, 
 American owned ships are operated under foreign flags. 
 If the American people desire a merchant marine and desire 
 at the same time to insist that there should be American 
 officers and that the crews should have certain accommodations, 
 certain food, and be in sufficient numbers to man a certain 
 number of lifeboats, the American people will have to pay — 
 otherwise the business will be done under flags other than our 
 own. 
 
 The financing of production and distribution, seUing 
 organization and transportation are the principal direct factors 
 in the development of our foreign trade. They immediately 
 concern the merchant and the manufacturer, the farmer, the 
 banker and the shipper, as well as the laboring man, but 
 under our form of administration they are all more or less 
 dependent upon Government action or subject in some 
 measure to Government control. The conduct of our interna- 
 tional relations, however, is essentially a Governmental function. 
 It is in reality the promotion of our oversea commerce in the 
 most comprehensive sense, and may be, and is, performed 
 in numerous ways, the variety and the importance of all of which 
 are not sufficiently appreciated. 
 
 One of the- most striking results of the European war 
 ah-eady apparent has been the strengthening of the ties be- 
 tween the United Kingdom and her Colonies. Imperial pref- 
 erence was first discussed after the bonds of Empire had been 
 knit close by the strain of the South African war. It would seem 
 not at all improbable, therefore, that this matter would again be 
 taken up with renewed vigor. Aside from sentimental and polit- 
 ical considerations the fact that wages in England have already 
 been increased— and are unlikely to be greatly reduced— and 
 that industry must be assured its profits, will afford an added 
 argument for some form of Imperial British protective tariff; 
 
10 
 
 while the present financial co-operation of England, France and 
 Russia, moreover, may also later form the basis for a customs 
 understanding. 
 
 We have regarded the tariff primarily as a source of revenue 
 and as a safeguard and stimulant for American production. 
 We have a Reciprocity Treaty with Cuba, and once discussed 
 a similar agreement with Canada. The provisions of the 
 Underwood-Simmons Act contemplate the negotiation of trade 
 agreements subject to the approval of Congress. But few of 
 us, save when startled by threatened reprisals, have been 
 alive to the possibilities of our tariff and our treaty-making 
 power as diplomatic instruments in the development of our for- 
 eign trade. There are certain favors which we can grant and cer- 
 tain things which we ourselves need. The negotiation of recip- 
 rocal arrangements should be facilitated and the institution of 
 reprisals made possible. The creation of a Tariff Board com- 
 posed of representatives of the Departments of State, the Treas- 
 ury, Commerce, Justice, and Labor, empowered to deal with 
 these matters may before very long be found to be necessary 
 in the interests of American commerce. 
 
 We are generally familiar with the effective work per- 
 formed by our Consular officers, and the ability and enthu- 
 siasm which the Secretary of Commerce— Mr. W. C. Red- 
 field — and his assistants have shown in the task of extending 
 American trade. The important functions and the very real 
 services of our Embassies and Legations, however, are ap- 
 parently not always so clearly appreciated or understood. It 
 is too often supposed that diplomacy has no very direct 
 relation with, or bearing upon, the humdrum affairs of 
 business life. In the minds of some a diplomat is a 
 gentleman in a top hat who makes himself pleasant to 
 ladies at tea parties. There are, it is true, countless mat- 
 ters of routine from the visaing or issue of passports to the 
 presentation of ladies at Court. Yet even these details 
 are important, for they, equally with matters of seemingly 
 far greater moment, affect our position abroad. The work is 
 
11 
 
 definite and technical, and requires trained intelligence, tact and 
 wide knowledge of business and politics. Diplomacy is not 
 an abstract science or system of philosophy, it is really a 
 Court of Equity in international affairs and our foreign rela- 
 tions are but the aggregate of questions in one way or 
 another arising from our oversea commerce. We may not 
 approve of armed intervention in the affairs of another nation 
 to enforce American claims. Such drastic action, on our 
 part, however, is unnecessary save in certain cases, fortunately 
 extremely rare, where general conditions rather than par- 
 ticular interests demand the restoration of law and order. 
 All legitimate American interests abroad whether they be 
 those of the missionary, or the investor, the merchant or 
 the ranchman, are entitled to diplomatic protection and 
 support. Unless such protection and support are assured, 
 foreign enterprise becomes a speculation and not an invest- 
 ment. It will attract gamblers, not sound business men, 
 for the confidence which security begets is the basis of all 
 honest trade. For this protection we look to the Department 
 of State and our Embassies, Legations and Consular estab- 
 lishments. They it is who must safeguard our interests in 
 foreign lands, and adjust questions which may arise between 
 citizens of ovir country and the Government of another, or 
 between another Government and our own in the develop- 
 ment of national policies. 
 
 We in this country, unfortunately, have been too prone to look 
 upon our foreign relations as a sort of football which we might 
 kick about to suit the whims of domestic politics. It is not so 
 many years ago that every Fourth of July orator twisted the 
 lion's tail for the edification of his auditors. Our isolation made 
 us not only confident, but unmannerly, in what we considered 
 to be our immunity. We have been inclined to disregard the 
 facts of our history. For this inaccurate teaching and mis- 
 taken patriotism have been largely responsible. But, surely 
 true patriotism does not consist in plajdng the ostrich, but in 
 
12 
 
 recognizing, in order to deal with, even disagreeable facts. 
 Otherwise progress becomes impossible. 
 
 One hundred years ago we were part of the European system. 
 American independence was but a collateral — though tremend- 
 ously important — result of the wars which preceded the French 
 Revolution. We passed unscathed through the Napoleonic 
 Era, and emerged essentially uninjured from the War of 1812 — 
 not because of our inherent strength, but because England, 
 France and Spain were more vitally concerned elsewhere. In the 
 enunciation of the Monroe Doctrine, which we like to consider 
 particularly our own, we were encouraged by a British Minis- 
 ter, Canning. He sought, not so much to safeguard American 
 liberty as to assure to British merchants opportunities for South 
 American trade by preserving that region from the domination 
 of the Holy Alliance. In China, in Africa, in India, South 
 America and Russia, American merchants played their part 
 in the adventurous trading of the first half of the nine- 
 teenth century. But these men, like our statesmen of that 
 time, were largely guided, or at least affected, by the influences 
 which dominated or agitated Europe. In these days our 
 oversea commerce was essential to the life of the nation 
 and our diplomacy was correspondingly important. During 
 the Civil War the clipper ships, famous the world over, were 
 driven from the seas. After 1865 we concentrated our 
 energies upon reconstruction in the South and the opening 
 of the West, severing our more intimate relation with the Con- 
 tinental system and entering upon a period of incubation 
 when we gave little heed to our foreign trade and during which 
 our di lomacy was provincial. In this, as in the preceding stage 
 of our national development, we were secure from outside inter- 
 ference— not so much because of our ability to resist aggression, 
 as because of our geographical position and the pre-occupation 
 of the Powers across the Atlantic. Even in 1895 at the time 
 of the Venezuelan boundary dispute. Lord Salisbury anticipated 
 the coming struggle with Germany and was unwilling to clash 
 with the United States. So later, when Germany endeavored 
 
13 
 
 to form a coalition of the Powers to support Spain, Great 
 Britain refused to participate and held the field clear while we 
 occupied Cuba and Porto Rico and defeated the Spanish fleet 
 at Manila Bay. It would be humiliating to feel that we could 
 not, if called upon to do so, defend the Monroe Doctrine against 
 all comers; but the fact remains that we have been able to de- 
 velop this, practically the only positive principal in our foreign 
 policy, chiefly thanks to the exigencies of European politics. 
 The Monroe Doctrine, like the " open door " in China, has 
 been accepted lest any interference therewith disturb the 
 delicately adjusted European " Balance of Power." 
 
 This " Balance of Power " which has in the past afforded us 
 our protection may, when this war is over, be unbalanced for 
 sometime to come — for one side or the other will probably emerge 
 victorious. Thespiritof nationalityin Europewill be emphasized. 
 Like the United States after the Civil War, when we induced 
 England to pay the Alabama claims — and suggested that the 
 forces of Napoleon III leave Mexico — the nations which have 
 fought may be more, rather than less belligerent: they may be 
 less tolerant of argument and more prone to action. The 
 strengthening of democracy should be a guarantee for the pre- 
 servation of peace, but it will be a peace in which our friends 
 across the water will be active and aggressive, rather than 
 charitable and considerate. 
 
 Following the cessation of hostilities in Europe there will be 
 a readjustment in world affairs unparalleled in history. 
 The future of Europe, of Asia, and Africa will be settled for some 
 time to come and it is inconceivable that the Americas will not 
 be intimately affected by, if indeed they are not included within 
 the scope of, this forthcoming international congress. 
 
 During the past few months the Administration in Wash- 
 ington has shown tact, judgment and sound common sense 
 in its efforts to protect our neutral commerce from bel- 
 ligerent interference. It has been inevitable, however, that 
 in the process we have, by the very correctness of our position, 
 provoked bitter criticism in the European press and amongst 
 
14 
 
 the peoples at war. We have made demands which they have 
 considered unreasonable and which they may not readily forget. 
 
 We are apt sometimes to be blind to the inconsistencies in 
 our own policy, but that does not by any means make 
 them invisible to others, who perhaps may be quite as 
 unconscious of the beam in their own eye as we are of the mote 
 in ours. Imagine for an instant what our view would be in 
 case American lives and property were sacrificed in, say, 
 China, and if Japan in refusing to allow us to secure satisfaction 
 from the Chinese Government, was unwilling herself to take 
 action. As we would have others do to us, so must we do to 
 them. Therefore, instead of being too vociferous in our de- 
 nunciation of those whom we feel are restricting our foreign 
 business, it might be well for us to remember that during the 
 past few years British, French and German property has been 
 destroyed in Hayti, Santo Domingo and Mexico. Under the 
 Monroe Doctrine we assumed a benevolent guardianship over 
 the affairs of this hemisphere. We have been granted a com- 
 paratively free hand to deal with these questions because 
 European rivalries have been so delicately balanced that no 
 power dared risk dispersing its strength in an American 
 adventure. On the conclusion of hostilities, however, this 
 situation will no longer exist. We may take it for granted 
 that we too shall then be asked for an accounting. We shall 
 either have to fulfil or forego the responsibilities which we 
 have in the eyes of the world at least, assumed for the be- 
 havior of our Southern neighbors. 
 
 You may feel, perhaps, that in raising this point I have de- 
 parted from my subject and entered upon a discussion of a 
 domestic question wholly unconnected with our foreign 
 trade or our general foreign relations. If so I cannot agree 
 with you. It is impossible to separate such matters into 
 watertight compartments. When we demand that Russia 
 modify her domestic policy regarding the Jews to recognize 
 American passports carried by our Jewish citizens, we cannot 
 expect Japan and China cheerfully to acquiesce in our exclusion 
 
15 
 
 of their subjects under the American immigration Laws. We 
 cannot impose our will upon another nation in Persia and expect 
 consideration and hearty co-operation in settling a dispute in 
 Peru. We cannot isolate problems in diplomacy and at our 
 discretion say that we will arbitrate this one and settle that 
 one as we may deem desirable. We cannot eat our cake and 
 have it. 
 
 This subject is referred to not with any desire to criticize 
 the Administration in Washington, which inherited and did 
 not create the Mexican problem. If we have shirked what 
 our critics consider to be our obvious duties, it has not been 
 so much the fault of President Wilson or Mr. Bryan as it has 
 of the American people whom they represent. We are a Demo- 
 cracy. The very nature of diplomacy requires constructive 
 and farsighted leadeiship. But with us in the last analysis 
 it must conform to the will of our people, and our foreign 
 policy will be intelligent and effective or otherwise according 
 to the public understanding or ignorance of its relation to our 
 national life. 
 
 It is, therefore, imperative that as a nation we should now, 
 while we have yet time, set our house in order. If we would 
 avoid embarrassments for the future, or assume fresh responsi- 
 bilities, our present obligations must be recognized. 
 
 It is foolish, moreover, for us now to talk complacently of cap- 
 turing British and German trade, because Europe is at war, 
 and because the Monroe Doctrine is supposed to give some sort 
 of a hypnotic claim to the profits of South American com- 
 merce. We heai that the trade of the world will be 
 ours; that we shall supplant London as the world's credit 
 center. But we should remember that much of the business 
 upon which we are now engaged is directly attributable to 
 the war, and may be greatly diminished by its conclusion. We 
 should not, therefore, be lulled to a happy sleep by siren songs. 
 We cannot sit down and wait for good things to continue to 
 drop, like ripe apples, into our lap. Once the war is over it 
 will not be long before Europe, commercially and industrially 
 
16 
 
 better organized than before, will aggressively undertake to 
 recoup itself for its losses by extending and developing its foreign 
 trade. Interruption in European exports has made it possible 
 to introduce American goods where heretofore they have been 
 denied a fair trial, but any advantages which we may now 
 gain will be temporary, rather than permanent in character, 
 unless we are able firmly to establish ourselves in the mar- 
 kets which, for the time being, are opened. 
 
 Our ability to meet the test will depend upon the quality 
 and prices of our goods, upon the facilities for financing their 
 distribution and upon the efficiency of our selling methods. 
 The activities of our merchants and manufacturers however 
 must be encouraged by an intelligent, alert, and responsible 
 diplomacy, maintaining increasingly cordial relations with the 
 rest of the world with which we desire to do business. 
 
 I fear, Gentlemen, that this has been a somewhat rambling 
 talk, that I have offered no concrete suggestions as to ways 
 and means of securing foreign trade. I have certainly not 
 ventured to outline a diplomatic policy for our Government. 
 But you are interested in foreign trade development, and it 
 is the inter-dependence of our foreign relations and our 
 foreign trade that I have endeavored to analyze — their 
 mutual relationship that I have attempted to make clear. 
 I have hoped, by describing the warp and woof, to give an 
 impression of the fabric as a whole, and to show that the prob- 
 lems of both are in reality the same, although expressed, 
 perhaps, in different terms. 
 
 To sell goods abroad it is necessary to understand and 
 satisfy a foreign market. To cultivate friendly diplomatic rela- 
 tions it is essential to appreciate and sympathize with the ideals 
 and aspirations of a nation other thari our own. Diplomacy, 
 like trade, is largely a matter of square dealing, in apprehend- 
 ing and adjusting differences, as well as common interests — in 
 recognizing, not in dodging, facts. Foreign trade and diplo- 
 macy, after all, are like most other human relations. The 
 twin keys to success therein are courtesy and common sense. 
 
17 
 
 As Southerners and as businessmen, you are endowed with the 
 one, and know the value of the other. The future is before 
 us. We wish to share the profits of the world's trade, and 
 creditably to bear our responsibilities in the world's affairs. 
 To realize these aspirations for this democracy of ours we must 
 have confidence in one another, understand the fundamental 
 identity of our interests and co-operate for a common end. 
 The essential thing is to see our problem clearly and, to 
 realize its bearing upon every phase of our national life. 
 
 Once we can do this, you know and I know that we shall 
 succeed. 
 
Cornell University Library 
 HF 3030.S89 
 
 Foreign relations and oversea trade; addr 
 
 3 1924 Oil 367 244 ,.,,„i