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The impact of ideas on trade policy: the origins of U.S. agricultural and manufacturing policies

Published online by Cambridge University Press:  22 May 2009

Judith Goldstein
Judith Goldstein
Affiliation:
An earlier version of this article was presented at the 1986 annual meeting of the American Political Science Association, Washington, D.C. Research funds were provided by the U.C. Berkeley Institute of International Studies. I thank William Lowry, Nick Ferguson, David Lake, Jeff Frieden, Amy Bridges, Robert Keohane, and Robert Pastor. I also thank Cynthia Patrick for her skillful editing.
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Since the close of World War II, the United States has supported contradictory tradepolicies. In manufacturing, the United States has fostered a liberal trade regime, spurning government involvement in market transactions. In agriculture, it has sanctioned policies of import restrictions, export subsidies, and import fees. This variation is rooted in decisions that were made in the 1930s and institutionalized in the 1940s. In the wake of the Great Depression, policymakers concluded that state intervention helped agriculture and hurt industry. This article argues that the choice of government policy and its appropriateness to the economic problems faced by each sector reflect the accepted knowledge at the time. Neither liberalization nor subsidization was inevitable; both were economically viable options. However, central decision-makers made choices that were often based on inaccurate beliefs about the utility of different policy options.

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Articles
Information
International Organization , Volume 43 , Issue 1 , Winter 1989 , pp. 31 - 71
Copyright
Copyright © The IO Foundation 1989

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References

1. See, for example, Krasner, Stephen D., “State Power and the Structure of International Trade,” World Politics 28 (04 1976).CrossRefGoogle Scholar

2. For different arguments on the virtues of protecting the family farm, see Wallace, Henry C., Our Debt and Duty to the Farmer (New York: Century, 1925), pp. 18–19Google Scholar; Roosevelt, Theodore,“Greatness Depends on the Tiller of the Soil,” in McGovern, George, ed., Agricultural Thought in the Twentieth Century (Indianapolis: Bobbs-Merrill, 1967), p. 28Google Scholar; Wallace, Henry A., New Frontiers (New York: Reynal & Hitchcock, 1934), p. 120Google Scholar; Spillman, W. J., Balancing the Farm Output (New York: Orange Judd, 1927), p. 112Google Scholar; Tugwell, Rexford G., The Democratic Roosevelt (Garden City, N. Y.: Doubleday, 1957), p. 231Google Scholar; Kile, O. M., The Farm Bureau Movement (New York: Macmillan, 1921), p. 95Google Scholar; and Capper, Arthur, “The Record of the Farm Block,” in McGovern, Agricultural Thought, p. 104.Google Scholar

3. On the development of the farm block, see McConnell, Grant, The Decline of Agrarian Democracy (Berkeley: University of California Press, 1953Google Scholar); McConnell, Grant, Private Power and American Democracy (New York: Vintage, 1966), pp. 70–79Google Scholar; and Lowi, Theodore J., The End of Liberalism (New York: Norton, 1969), pp. 102– 15Google Scholar. For two excellent essays that incorporate societal explanations and a more institutional analysis of American policy, see Finegold, Kenneth, “From Agrarianism to Adjustment: The Political Origins of New Deal Agricultura Policy,” Politics and Society 11 (Winter 1981)Google Scholar; and Skocpol, Theda and Finegold, Kenneth, “State Capacity and Economic Intervention in the Early New Deal,” Political Science Quarterly 97 (Summer 1982)CrossRefGoogle Scholar. This essay supports much of Finegold and Skocpol. In design, both papers suggest that an analysis of agricultural supports must be comparative with its sister industrial program. Analytically, however, I downplay the role of the Department of Agriculture. Rather, I argue that the Department could have supported a range of programs. It committed first to Peek–Johnson plans and only later to the subsidization schemes. I agree, however, that the Department played a critical role in organizing the debate over agriculture. I further agree that the NRA failed, among other reasons, because not enough people were trained to set industrial policy. But this lacuna existed not only because the Department of Commerce abstained from involvement, as they argue, but because the sectors faced different problems in the 1920s. “Ideas” reflect variations in the development trajectories of each sector. Thus, when the Depression hit, politicians faced an uneven set of “ideas” about what the state's response could be. I agree with Finegold and Skocpol that the government was able to intervene more autonomously (without extra government experts and organization, p. 261) in agriculture than in industry. I focus on one source of that constraint, namely, the lack of debate on industrial policy. Policy in both sectors reflected a set of ideas much more relevant for agriculture than for industry.

4. See Hirschman, Albert, State Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1945)Google Scholar; and Viner, Jacob, “Power versus Plenty as Objectives of Foreign Policy in the 17th and 18th Centuries,” World Politics 1 (10 1948CrossRefGoogle Scholar). In these works, Hirschman and Viner argue that agriculture, as well as industry, should be developed to maximize a nation's self-sufficiency.

5. A fourth alternative not considered here was a monetarist solution. This proposal had little popular support until the mid-1930s. See the works of Warren, G. F.—for example, Warren, G. F. and Pearson, F. A., Prices (New York: Wiley & Sons, 1933).Google Scholar

6. Wallace, Henry A., New Frontiers (New York: Reynal & Hitchcock, 1934), pp. 147–48.Google Scholar

7. Quoted in Benedict, Murray, Farm Policies of the United States, 1790–1950 (New York: Octagon, 1966), p. 209.Google Scholar

8. Quoted in Saloutos, Theodore, The American Farmer and the New Deal (Ames: Iowa State University Press, 1982), p. 21.Google Scholar

9. The conversion of Secretary of Agriculture Wallace to the Peek–Johnson camp was crucial to the longevity of this program. Henry Wallace, the son of the famous farm writer, came to Washington with the Harding administration. Under his tutelage, the Department of Agriculture became an important policymaking agency. Wallace supported research on a number of agricultural issues and created the Bureau of Agricultural Economics (BAE) in 1922. As a convert to the ideas of Peek and Johnson, he publicized the proposal and commissioned a series of feasibility studies from sympathetic BAE economists.

10. Quoted in Benedict, , Farm Policies, p. 217Google Scholar. Benedict sees opposition to the plan coming from all but the Northwest wheat states, leading even the Farm Bureau to be ambivalent in its support. In Wallace, Henry A., New Frontiers, p. 149Google Scholar, Wallace agreed that the agricultural sector was far from unanimous in its support: “The cotton and tobacco people were decidedly lukewarm … [and] the dairy people of the North and East were in many cases rather antagonistic.”

11. Quoted in McGovern, , Agricultural Thought, pp. 129–33.Google Scholar

12. Benedict, , Farm Policies, p. 228.Google Scholar

13. Benedict, , Farm Policies, pp. 226, 230, and 293Google Scholar. Republicans were committed to “adequate tariff protection to such of our agricultural products as are affected by foreign competition.” For platform proposals, see Porter, Kirk H. and Johnson, Donald B., National Party Platforms, 1840–1964 (Urbana: University of Illinois Press, 1966), p. 285Google Scholar. Still, one last export plan gained political support during these years. The National Grange proposed anew an export debenture program, in which exporters were given government debentures worth all or part of the difference between the value of the commodity in the world market and a domestic value based on the world market plus the tariff. Although supported by a range of groups, this plan was scarcely considered by Hoover, who remained committed to the idea of private cartelization.

14. Sapiro, Aaron. “Co-Operatives to Control Marketing,” in McGovern, Agricultural Thought, pp. 99–102.Google Scholar

15. Saloutos, , American Farmer, p. 22.Google Scholar

16. Wallace describes cooperatives as a necessary but definitely not sufficient condition for farm recovery. In Our Debt and Duty to the Farmer, p. 159, he admits that “the need for strong cooperative marketing associations cannot be over-emphasized,” but he goes on to state pointedly that “the mistaken belief that by the mere organization of cooperative enterprises the farmers can be lifted overnight from the valley of depression to the peak of prosperity has prompted some curious suggestions of federal participation.”

17. For example, without Wallace's knowledge, Coolidge sent out the Meyer–Mondell mission in 1923 to promote cooperative marketing. When Wallace discovered this, he attempted to commission his own counter-study.

18. Quoted in Black, John D., Agricultural Reform in the United States (New York: McGraw-Hill, 1929), p. 338.Google Scholar

19. In a 1928 campaign speech in Iowa, Hoover defended his support of a federal farm board: “My fundamental concept of agriculture is one controlled by its own members, organized to fight its own economic battles and to determine its own destinies. Nor do I speak of organization in the narrow sense of traditional farm co-operatives or pools, but in the much wider sense of a sound marketing organization. … These proposals [are not] intended to put the Government into … the business of agriculture, nor to subsidize the prices of farm products and pay the losses thereon either by the Federal Treasury or by a tax or fee on the farmer.” See Wilbur, Ray L. and Hyde, Arthur Mastich, The Hoover Policies (New York: Scribner's Sons, 1937), p. 148.Google Scholar

The 1928 Republican party platform pledged support of a farm board to “promote the establishment of a farm marketing system of farmer-owned-and-controlled stabilization corporations or associations to prevent and control surpluses through orderly distribution.” The platform did guard against extensive federal involvement. “We favor, without putting the Government into business, the establishment of a Federal system of organization for co-operative and orderly marketing of farm products.” See Porter, , National Party Platforms, p. 285.Google Scholar

20. The 1929 Act inspired considerable debate, particularly in response to the Senate inclusion of an export-debenture plan entailing debenture rates of one-half the rate of tariff duty in effect on most commodities. Having already passed the original version in April, many representatives responded strongly to the Senate version on 17 May. Viewing the debenture plan as a revenue-raising measure, Representative Snell criticized the Senate for having “violated the constitutional rights and prerogatives of the House” (Congressional Record, 17 05 1929, p. 1448).Google Scholar Other representatives instead expressed disapproval that the House had never seriously considered such a debenture plan. Representative Joseph Cannon stated: “And the reason the House has been denied that privilege [voting on debentures] is because the opponents of real farm relief know they would carry if brought to a direct vote. It is a matter of common knowledge that a majority of the members of this House, on both sides of the aisle, as well as a majority of the Senate, favor the debenture plan or equalization fee, and would vote for them if given the opportunity” (Congressional Record, 17 05 1929, p. 1451).Google Scholar The House passed a resolution (voting 249 to 119) to prohibit such a floor vote and sent its delegates to conference with the Senate still opposed to the plan.

The Senate itself was hardly unanimous on the export-debenture plan. In fact, some prominent senators said they were only supporting it because the alternative, equalization, was considered unconstitutional (testimony of Copeland, Senator Royal Samuel, Congressional Record, 11 06 1929, p. 2649)Google Scholar. The Senate, however, stood by its plan, although Hoover condemned it for excessive costs and resultant increased production (Benedict, , Farm Policies, p. 239)Google Scholar. The impasse produced a conference committee whose subsequent report favored the House version, much to the consternation of several senators, who claimed that the debenture plan was the only reason they would vote for the bill in the first place (testimony of Copeland, Senators and Tydings, Millard, Congressional Record, 11 06 1929, p. 2652)Google Scholar. On 11 June, the Senate rejected the conference report by a close vote of 43 to 46 and insisted on its amendment.

In response, the House voted 250 to 113 on 13 June to instruct their conferees to insist on striking out the debenture plan, by now the only source of disagreement. In session the next day, some of the previous supporters of the debenture plan viewed the House vote as indicative of opposition to export debentures; after their due consideration, they granted reluctant acceptance to the conference report (testimony of Robinson, Senator Joseph T., Congressional Record, 14 06 1929, p. 2871)Google Scholar. The report passed by a vote of 74 to 8 over the objections of R. S. Copeland, Robert LaFollette, and Peter Norbeck, among others.

21. Benedict, , Farm Policies, p. 240.Google Scholar

22. Nourse, Edwin G., Davis, Joseph L., and Black, John D., Three Years of the Agricultural Adjustment Administration (Washington, D. C: Brookings Institution, 1937) pp. 7–12.Google Scholar

23. Quoted in Nourse, , Davis, , and Black, , Three Years, p. 8.Google Scholar

24. Ibid., pp. 8–9.

25. The text of the Agricultural Marketing Act stipulated that the Farm Board should aid in “preventing and controlling surpluses in any agricultural commodity, through orderly production and distribution” (Board, U.S. Federal Farm, First Annual Report, 30 06 1930, p. 64)Google Scholar. In this first annual report, the Farm Board recognized the need for control of excessive production, but it did not specify the role for government (pp. 25–26). By the time of the second report, the Board had assisted in acreage reduction programs for wheat and had collaborated with agricultural colleges in providing production information to farmers (Board, U.S. Federal Farm, Second Annual Report, 30 06 1931, pp. 62–63)Google Scholar. By 1932, the Board proudly described its cooperation with the Department of Agriculture in preparing and disseminating outlook statements to help farmers adjust local production as well as in setting up a national land-use planning committee; and on its own, the Board initiated stabilization operations in cotton and wheat (Board, U.S. Federal Farm, Third Annual Report, 30 06 1932, pp. 57–61).Google Scholar

26. While the Republican platform of 1932 still pledged to work through cooperatives, it did allow for the modifications to the Agricultural Marketing Act “as experience shows to be necessary to accomplish the objects set forth in the preamble of the Act” (Porter, and Johnson, , National Party Platforms, pp. 342–43)Google Scholar. One author states that Hoover insisted that the platform contain land-use planning to enable “the control of production to such volume as will balance supply with demand” (Wilbur, and Hyde, , The Hoover Policies, p. 162)Google Scholar. However, Hoover flatly rejected any significantly greater role for government at Des Moines in October 1932 when he rejected stabilization provisions “which never were and are not now the major purpose of the Farm Board” (ibid., p. 167). added, He: “Even indirect purchase and sale of commodities is absolutely opposed to my theory of government”Google Scholar (ibid., p. 167; emphasis mine).

27. Nonrecourse loans became official policy in 1935.

28. The unsigned article is attributed to Harry N. Owen, the journal's editor.

29. W. J. Spillman, Balancing the Farm Output.

30. Black, , Agricultural Reform, p. 271.Google Scholar

31. Ibid.

32. Benedict, , Farm Policies, p. 268.Google Scholar

33. Black, , Agricultural Reform, p. 295.Google Scholar

34. The Bureau's advocacy of Philippine independence was one indication of its reliance on the tariff as the key public policy. In this way, products from the Philippines would be subject to the tariff. See Benedict, , Farm Policies, pp. 271–72.Google Scholar

35. M. L. Wilson first communicated with then Governor Roosevelt on domestic allotment when he commended Roosevelt for a 1931 speech in which Roosevelt discussed the withdrawal of submarginal lands from production. In early July 1932, Wilson met with Roosevelt in Albany, at the urging of Tugwell. Both Wilson and the domestic allotment plan, which was similar to Roosevelt's own New York plan, won the immediate attention of the Governor. See Rowley, William D., M. L. Wilson and the Campaign for the Domestic Allotment (Lincoln: University of Nebraska Press, 1970), pp. 117 and 150–53.Google Scholar

36. In United Stales v. Butler, the defendant, a cotton producer, challenged the legality of the AAA's processing tax. The court ruled that although taxing was legitimate under the “general welfare” provision of the Constitution, it was not legal for a regulatory purpose not explicitly stated in the Constitution.

37. Congress has subsequently designated separate programs for sugar and wool.

38. Nourse, Edwin G., American Agriculture and the European Market (New York: McGraw-Hill, 1924), p. 92.Google Scholar

39. Ibid., p. 229.

40. Ibid., p. 232.

41. Nourse, Spillman, and Black, all renowned economists writing in the 1920s, dismissed the possibility of the United States pursuing an export policy in agriculture after World War I. Nourse argued that with the “great collapse” in Europe, “we should keep our minds open to the possibility that such a restoration may not in fact take place” (Nourse, , American Agriculture, p. 233)Google Scholar. Spillman warns that even if exports could be increased, this would come at the price of increased production, which would cause the whole system to “fall to the ground” (Spillman, , Balancing the Farm Output, p. 71)Google Scholar. Black doubted the usefulness of tariff revision, since it would have the ultimate effect of making “prices of these farm products more unstable than they are at present” (Black, , Agricultural Reform, p. 219).Google Scholar

42. Leddy, John M., “United States Commercial Policy and the Domestic Farm Program,” in Kelly, William B. Jr, ed., Studies in United States Commercial Policy (Chapel Hill: University of North Carolina Press, 1963), pp. 179–80.Google Scholar

43. In his inaugural address on 4 March 1933, Roosevelt gave his priorities: “Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy. I favor as a practical policy the putting of first things first. I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment. The basic thought that guides these specific means of national recovery is not narrowly nationalistic. It is the insistence, as a first consideration, upon the interdependence of the various elements in and parts of the United States. … It is the way to recovery. It is the immediate way.” See The Public Papers and Addresses of Franklin D. Roosevelt, vol. 2 (New York: Random House, 1938), p. 14.Google Scholar

44. The time period was ultimately designated as a “previous representative period.” The law did not specify what constituted interference of domestic programs. “Interference” could be defined as no imports or a substantial amount, which gave the Commission and the President substantial discretion. It is noteworthy that only the President had the right to initiate an investigation and held all final authority. The decision to give investigative rights to the Tariff Commission and not to the USDA suggests that Congress wanted to keep the more involved and more biased USDA out of the decision-making procedure.

45. Leddy, , “United States Commercial Policy,” p. 184.Google Scholar

46. In America Must Choose (New York: Foreign Policy Association, 1934), p. 8, Secretary of Agriculture Henry A. Wallace states that the choice is between nationalism, internationalism, and “a planned middle course.” He argues that nationalism would require less readjustment by manufacturing than by agriculture, whereas internationalism “would throw the greater burden of adjustment on factories rather than on farms.”

47. U.S. Department of Commerce, Bureau of the Census, Historical Statistics of the United States from Colonial Times to 1970 (Washington, D.C.: GPO, 1975), p. 240.Google Scholar

48. Quoted in Lyon, Leverett S., The National Recovery Administration (Washington, D.C.: Brookings Institution, 1935), p. 3.Google Scholar

49. Quoted in Schlesinger, Arthur M. Jr, The Coming of the New Deal (Boston: Houghton Mifflin, 1959), p. 87.Google Scholar

50. The following selections appear in Ginn, Howard, ed., New Deal Thought (Indianapolis: Bobbs-Merrill, 1966)Google Scholar: Sinclair, Upton, “Production for Use” (1933)Google Scholar; Niebuhr, Reinhold, “After Capitalism—What?” (1933)Google Scholar; and Dewey, John, “The Future of Liberalism” (1935)Google Scholar. Prior to these essays, Sinclair had written The Jungle, which was dedicated “To the Workingmen of America.” Niebuhr's Love and Justice includes an essay—entitled “How Philanthropic is Henry Ford?”—which was written in 1927 and which questions the heroic stature of one of America's most admired capitalists. In 1930, Dewey published Individualism Old and New, in which he expresses concern that the individual spirit has succumbed to “the corporateness of existing society” (p. 85).

51. Quoted in Schlesinger, , New Deal, p. 88.Google Scholar

52. Ibid., p. 98. Schlesinger calculates that 27 of 49 speakers endorsed more government intervention.

53. Schlesinger, , New Deal, p. 89.Google Scholar

54. Tugwell, Rexford G., The Industrial Discipline and the Governmental Arts (New York: Columbia University Press, 1933), p. 212.Google Scholar

55. Within the administration, Adolph Berle “seems to have been the most determined protagonist of the business planning viewpoint,” although his efforts slacked off later. See Himmelberg, Robert F., The Origins of the National Recovery Administration (New York: Fordham University Press, 1976).Google Scholar

56. The groups were comprised as follows: Wagner's group included association law experts David Podell and Gilbert Montague; Senator Robert LaFollette, with his emphasis on public works; United Mine Workers' (UMN) spokesman W. Jett Lauch; and Brookings economist Harold Moulton. Dickinson's was an executive branch–oriented group and included Tugwell, Perkins, and Jerome Frank, later joined by Leon Keyserling. Johnson, brought in by Moley, was later joined by Donald Richberg. See Schlesinger, , New Deal, pp. 96–97.Google Scholar

57. Quoted in Schlesinger, , New Deal, p. 101.Google Scholar

58. Ibid.

59 .Ibid., p. 121.

60. Ibid.

61 .Ibid.

62. Ibid., pp. 123–24.

63. Ibid., pp. 159–60.

64. Was criticism of NRA justified? The NRA was certainly a poorly administered organization. However, recovery was not stifled by administrative decisions on prices. Schlesinger argues that the causes of price rigidity went a great deal deeper than anything having to do with a particular set of NRA codes, and its cure was well beyond NRA control.

65. Lyon, , The National Recovery Administration, p. 883Google Scholar. In comparison, the Brookings Report on the AAA was more supportive of the philosophy and workings of the program. See Nourse, , Davis, , and Black, , Three Years, pp. 193ff.Google Scholar

66. In United States v. Schecter, the defendants contended that the NIRA was an unconstitutional delegation of powers, that the regulation of their enterprise was outside the purview of congressional authority, and that NIRA codes were contrary to due process provisions. (The company had been accused of violating the live poultry code in their wages, price reports, and sale of diseased poultry.) The court ruled that NIRA was an illegal enlargement of congressional powers. The court found the codes to be coercive, without reference to standards, and, in this particular case, to fall solely in the jurisdiction of New York, since the poultry was bought elsewhere but processed and sold within the boundaries of one state.

67. In Schlesinger, , New Deal, pp. 174–75Google Scholar, Schlesinger argues: “The more enduring achieve ments of NRA lay not in the economic but in the social field. … It established the principle of maximum hours and minimum wages on a national basis. It abolished child labor. It dealt a fatal blow to sweatshops. It made collective bargaining a national policy and thereby trans formed the position of organized labor. It gave new status to the consumer. It stamped out a noxious collection of unfair trade practices. It set new standards of economic decency in American life—standards which could not be rolled back, whatever happened to NRA.” Johnson, Hugh S. himself cites these accomplishments in his memoirs, The Blue Eagle from Egg to Earth (Garden City, N.Y.: Doubleday, Doran, 1935)Google Scholar, and proudly claims that “no labor organization on the earth and no conflict between labor and management could have done these things” (pp. 267–68).

68. In Bellush, Bernard, The Failure of the NRA (New York: Norton, 1975)Google Scholar, Bellush attributes the problems of the NRA to the lack of standards or principles guiding its behavior. Those guidelines could have been supplied by other institutional actors, but “neither Congress nor the President seriously faced up to the task of directing, let alone controlling, the administrative agency” (p. 176).

69. If administrators had been better acquainted with Robinson's, Joan book, The Economics of Imperfect Competition (London: Macmillan)Google Scholar or Chamberlin's, Edward book, The Theory of Monopolistic Competition (Cambridge: Harvard University Press)Google Scholar, both published in 1933, the NRA's attempt at market controls may have been somewhat more successful. However, there still remains a problem in setting prices if the market consists of primary, intermediary, and finished products. Price setting is a far less complex task when the majority of controlled products are primary, as in agriculture.

70. Fora more thorough explication of the 1934 Act, see Haggard, Stephan, “The Institutional Foundations of Hegemony: Explaining the Reciprocal Trade Agreement Act of 1934,” International Organization 42 (Winter 1988).CrossRefGoogle Scholar

71. Cited in Tasca, Henry J., The Reciprocal Trade Policy of the United States (Philadelphia: University of Pennsylvania Press, 1938), p. 12.CrossRefGoogle Scholar

72. Tasca, , Reciprocal Trade Policy, p. 28.Google Scholar

73. Previously, the United States had negotiated agreements based on conditionality, or the provision that tariff concessions would only be extended to third parties giving the United States equivalent concessions. This proviso led to discriminatory agreements among parties. If all nations cannot benefit from a tariff reduction, then the agreement by definition is discriminatory to those parties not involved. In reviewing America's record, however, no extensive history of discriminatory practices is found. Although the country had a history of high tariffs, the effect of having a single-column tariff schedule until 1909 led, de facto, to all nations being subjected to one set of custom barriers.

74. Culbertson, William J., Reciprocity (New York: McGraw-Hill, 1937), pp. 244–58.Google Scholar

75. Culbertson, , Reciprocity, p. 69Google Scholar; and Tasca, , Reciprocal Trade Policy, pp. 116–21.Google Scholar

76. There were sound functional reasons for a shift from conditional to unconditional MFN policies after World War I. In Kelly, , Studies, pp. 44–98Google Scholar, Kelly argues that the United States enjoyed relative immunity from discrimination before the war (1) because of the scarcity of occasions before 1890 when U.S. action might have inspired retaliation; (2) because the United States benefited from the unconditional treaties of other nations (particularly Europe); and (3) because of the predominance of noncompetitive agricultural goods in American exports. However, increasingly hostile trade, the necessity of new treaties, growing reliance on manufactured goods, and the shift from debtor to creditor made the United States vulnerable to discrimination after World War I.

77. Tasca, , Reciprocal Trade Policy, p. 6.Google Scholar

78. Ibid.

79. Viner, Jacob, International Economics (Glencoe, 111.: Free Press, 1951), p. 109.Google Scholar

80. See “Memoirs of Willard Thorp,” in Louchheim, Katie, ed., The Making of the New Deal (Cambridge: Harvard University Press, 1983), p. 276.Google Scholar

81. Even Hull had a limited understanding of why liberalization was in America's interest. William Allen, in a study of Hull's trade philosophy, states that “although Hull's conclusions were generally correct, they were correct for the wrong reasons.” See Allen, William, “The International Trade Philosophy of Cordell Hull, 1907–1933,” American Economic Review 43 (03 1953).Google Scholar

82. Rosen, Elliot A., Hoover, Roosevelt, and the Brain Trust (New York: Columbia University Press, 1977), p. 107Google Scholar. In his memoirs, Hull writes, “The granite rock of isolation and narrow-nationalism still stood in the middle of the road to the necessary international cooperation for a future world of peace and economic well-being.” See Hull, Cordell, Memoirs, vol. 1 (New York: Macmillan, 1948), p. 157.Google Scholar

83. Quoted in Rosen, , Hoover, Roosevelt, p. 107.Google Scholar

84. Ibid., p. 106.

85. Ibid., p. 345.

86. Ibid., p. 344.

87. Ibid., p. 346.

88. Ibid., p. 347.

89. Although Schlesinger claims that Roosevelt favored Hull for the vice-presidential spot in 1928 to help “liberalize” the party (Schlesinger, New Deal, p. 90), Hull himself apparently entertained few expectations of any appointment under Roosevelt (Hull, , Memoirs, vol. 1, p. 156)Google Scholar. Even so, Hull viewed Roosevelt's offer of the position of Secretary of State only in terms of complementary policy views: “We did not discuss foreign affairs to see whether we agreed in our attitudes toward them. Neither of us felt the need to do so. We had discussed foreign relations so many times in the past, especially during the later twenties when I used to meet him as he came through Washington, that we thoroughly knew each other's views in the main” (ibid., p. 159).

Other participants in the Roosevelt administration interpreted the Hull appointment in a less sanguine light. Hull enjoyed little support within the Brain Trust during the 1932 campaign, and his views were only solicited through sugar importer Charles Taussig (Rosen, , Hoover, Roosevelt, p. 343)Google Scholar. Hull had initially been brought to the attention of Roosevelt by Louis Howe who, according to Moley, later had second thoughts about his high recommendation (Moley, , After Seven Years [New York: Harper, 1939], p. 112)Google Scholar. In his later memoirs, Moley admits that another leading candidate for Secretary of State (Senator Key Pittman) was ruled out because he was a heavy drinker (Moley, , The First New Deal [New York: Harcourt, Brace, 1966], p. 87)Google Scholar. Even so, Moley himself recalls Roosevelt's comment that “Hull's appointment would be pleasing to the old-line party leaders” (After Seven Years, p. 112).

Determining Roosevelt's motivation in appointing Hull is not easy. Given the later appointment of George Peek as special adviser on foreign trade, it is difficult to argue that Hull's and Roosevelt's views on trade were entirely consonant. We know that Roosevelt resisted suggestions of Hull as vice president (Bernard M. Baruch [New York: Holt, Rinehart & Winston, 1960], p. 282). An alternative explanation of the State Department appointment is that Roosevelt wanted to bring Hull within the sphere of his administration so that he would not be an obstacle later, but Hull himself claims he accepted the job because he “could advance sound international views more effectively as head of the State Department than … in the Senate” (Hull, , Memoirs, vol. 1, p. 157)Google Scholar. We should recall Roosevelt's style of dealing with advisers (see Neustadt, Richard,Presidential Power [New York: Wiley, 1960], pp. 156–58)Google Scholar. Roosevelt enhanced his own power by surrounding himself with conflicting viewpoints and differing channels of information. He also knew that Hull's idea of liberalizing trade involved “empowering the president, free of the pressures of congressional logrolling, to negotiate agreements with other nations to lower duties” (Leuchtenberg, William E., Franklin D. Roosevelt and the New Deal, 1932–1940 [New York: Harper & Row, 1963], pp. 203–4Google Scholar; emphasis mine). Perhaps Roosevelt thought he could only stand to gain, either from the acceptance of Hull's ideas or from rising above the conflict that they created. Indeed, this would explain why Roosevelt “simultaneously encouraged both the internationalist and nationalist interpretation” (Dallek, Robert, Franklin D. Roosevelt and American Foreign Policy, 1932–1945[Oxford: Oxford University Press, 1979]. p. 84).Google Scholar

90. Cited in Tasca, , Reciprocal Trade Policy, p. 32.Google Scholar

91. Ibid.

92. Ibid., p. 33.

93 .U.S. Congress, House of Representatives, 8 March 1934, Hearings on Reciprocal Trade Agreements, 73d Congress, 2d sess. pp. 5–6.

94 .Sayre, Francis B., America Must Act (Boston: World Peace Foundation, 1936), p. 34.Google Scholar

95. Quoted in Schattschneider, C. E., Politics, Pressure and the Tariff (Hamden, Conn.: Archon, 1963), p. 283.Google Scholar

96. Tasca wrote at the time, “Summing up the entire situation, one can only state that the whole process of tariff-making by Congress offers a sad commentary on the degree to which a distortion of democratic methods is possible” (Tasca, , Reciprocal Trade Policy, p. 72)Google Scholar. Taussig also viewed logrolling as equally condemnable but also inevitable: “On the tariff the log-rollingprocess goes on without mitigation” (Taussig, F. W., The Tariff History of the United States [New York: Capricorn, 1964], p. 494)Google Scholar. Viner more generally contrasted tariff making by statesmen with what economists overwhelmingly advise (Viner, , International Economics, pp. 109–18).Google Scholar

97. Quoted in Kelly, , Studies, p. 78.Google Scholar

98. The Senate did debate the “constitutional” issue of transferring power. Senator William E. Borah proclaimed that “the constitutional question transcends all others in importance,” so much so that he could not vote for passage; and Senator Huey Long described the bill as further evidence to NRA and AAA of congressional divestment of power (Congressional Record, 17 May 1934). After the bill passed, The New York Times reported that Cordell Hull switched from protector of congressional dominion to advocate of executive delegation (New York Times, 6 June 1934). Hull himself defended executive authority as consistent with the actions of most other countries around the world (Ways, House and Committee, Means, Hearings on Reciprocal Trade Agreements, 1934, p. 5).Google Scholar

99. The vote in the House was 274 to 111, with only eleven Democrats defecting and two Republicans supporting the bill. The vote of 57 to 33 in the Senate included five from each party switching sides. The five Republicans who supported the bill in the Senate were, not surprisingly, Capper, Couzens, LaFollette, Norbeck, and Norris.

100. Wallace, , America Must Choose, p. 33.Google Scholar

101. Leddy, , “United States Commercial Policy,” p. 208.Google Scholar

102. For a thorough analysis of the Hull v. Peek controversy, see Harry C. Hawkins and Janet L. Norwood, “The Legislative Basis of United States Commercial Policy,” in Kelly, , Studies, pp. 93–95Google Scholar. See also Dallek, , Franklin D. Roosevelt, pp. 84 and 92Google Scholar; and Leuchtenberg, , FDR, pp. 204–5Google Scholar. Hull recounts the event in his Memoirs, vol. I, pp. 370–74, Peek, while offers his side in Why Quit Our Own? (New York: Nortrand, 1936), pp. 329–40.Google Scholar