The U.S. Calls the Turn

The U.S. Congress had in its hands last week a form of world power which even Joe Stalin could not match. For Congress was about to settle some vital international matters, and settle them for good.

No. 1 was Bretton Woods, on which Congress opened hearings. By tacit consent Congress will decide the fate of the International Monetary Agreements. If the U.S. accepts them, other nations will fall in line; if it rejects them, they are dead.

No. 2 was U.S. tariff policy, an issue raised by the introduction of a bill to renew for three years the Reciprocal Trade Agreements Act (and permit further reductions in tariffs). To all nations, particularly Britain, which are inclined to think that multilateral trade is dead past resurrection, Congress' action will be either a surprise or a sign that it is high time for them to go ahead with plans for bilateral trade, empire preference and other deals that exclude the U.S.

The opening blast of Minnesota's Harold Knutson, ranking Republican of the Ways & Means Committee, suggested that there would be no glad surprises for those who hope for freer world trade. Said he, in an echo of the palmy days of isolationism: "This [tariff reduction] would be tantamount to signing a death warrant for hundreds of businesses and throwing tens of thousands of workers out of employment. Republicans in the House will fight it to the last ditch."

If they did, both the tariff and Bretton Woods debates, coming just before and during the San Francisco Conference, would give delegates a close-up of U.S. economic isolationism.

But this week, shortly after the hearings opened, Bretton Woods got its first resounding boost. A steady barrage of criticism from big U.S. bankers--almost the only Americans who professed to understand these highly important but technical matters--had given the Bretton Woods proposals a bad press ever since they were signed. The final official say of the American Bankers Association (TIME, Feb. 12) was that the proposed World Reconstruction Bank was sound, but not the Monetary Fund, from which countries could borrow foreign funds when lopsided trade threatened temporarily to restrict their purchases.

In fact scrapping the Fund would mean scrapping both agreements, since the membership in the Bank was confined to members of the Fund.

The potent, hardheaded Committee for Economic Development this week came to the rescue of the Bretton Woods proposals. C.E.D.'s research committee--including Boston Banker Ralph E. Flanders and Tax Expert Beardsley Ruml--analyzed criticisms of the Fund and found that, so far as they were valid, they could best be met by giving the Bank power to make long term loans, when necessary, to stabilize a nation's currency. But C.E.D. declared that scrapping the Fund would be a serious loss. In short, C.E.D. came out for both Bank and Fund, with more power for the Bank.

By meeting the criticisms of the bankers, C.E.D. thus offered, to those critics willing to take it, a graceful out. At the same time it gave doubtful Congressmen good authority for voting for instead of against Bretton Woods.

With such decisions-making in Congress, it was a certainty that during next month's International Security Conference the eyes of San Francisco would be almost as much on Washington as those of Washington would be on San Francisco.

This file is automatically generated by a robot program, so reader's discretion is required.