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University Microfilms, Inc., Ann Arbor, Michigan the UNIVERSITY of OKLAHOMA 69- 13,912 BEDDOW, James Bellamy, 1942- ECONOMIC NATIONALISM OR INTERNATIONALISM: UPPER MIDWESTERN RESPONSE TO NEW DEAL TARIFF POLICY, 1934-1940. The University of Oklahoma, Ph.D., 1969 History, general University Microfilms, Inc., Ann Arbor, Michigan THE UNIVERSITY OF OKLAHOMA GRADUATE COLLEGE ECONOMIC NATIONALISM OR INTERNATIONALISM: UPPER MIDWESTERN RESPONSE TO NEW DEAL TARIFF POLICY, 1934-1940 A DISSERTATION SUBMITTED TO THE GRADUATE FACULTY in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY BY JAMES BELLAMY BEDDOW Norman, Oklahoma 1969 ECONOMIC NATIONALISM OR INTERNATIONALISM: UPPER MIDWESTERN RESPONSE TO NEW DEAL TARIFF POLICY, 1934-1940 APfPUVED BY L y —, DISSERTATION COMMITI^E TABLE OF CONTENTS Page PREFACE................................................... iv Chapter I. MIDWESTERN AGRICULTURE AND THE TARIFE . I II. RECIPROCAL TRADE AGREEMENTS PROGRAM ENACTED ............................. 13 III. ORGANIZATIONAL RESPONSE TO THE RECIPROCAL TRADE AGREEMENTS PROGRAM . 4] IV. NEW DEAL TARIFF POLICY AND THE ELECTION OF I936............................. 6? V. TRADE AGREEMENTS PROGRAM RENEWED...............96 VI. AMERICAN NATIONAL LIVE STOCK ASSOCIATION OPPOSES THE TRADE AGREEMENTS PROGRAM.......................... 128 VII. MIDWESTERN REACTION TO TRADE AGREEMENTS WITH GREAT BRITAIN AND CANADA .............144 VIII. THE NEW DEAL PROPOSES A TRADE AGREEMENT WITH ARGENTINA................... .....182 IX. TRADE AGREEMENTS PROGRAM RENEWED............. 200 X. CONCLUSIONS ....................................244 BIBLIOGRAPHY ........................................... 251 111 PREFACE In the years between I89O and 1930 congressmen and senators representing various interests groups had fought bitter battles over the McKinley, Wilson-Gorman, Payne- Aldrich, Simmons-Underwood, Fordney-McCumber, and the Smoot-Hawley tariff bills. The years immediately after the passage of the Smoot-Hawley act witnessed a continuing concern by many people over the tariff; however, the Great Depression with its unemployment, business failures, low farm prices and bank closings forced the issue into the background. Yet, despite the overriding importance of such domestic problems, the tariff question did receive serious consideration. Those who related the depression to previous tariff policies called for a different approach to tariff policy which, they believed, would stimulate in­ ternational trade and help to restore prosperity both at home and abroad. Their idea was to inaugurate a broad pro­ gram of reciprocal trade agreements. During the initial days of his administration. Pres­ ident Franklin D. Roosevelt turned his back on the inter­ national depression in order to concentrate on restoring America's prosperity. However, as time passed he became iv convinced tbat complete recovery by the United States was unlikely in the face of prolonged world-wide depression. As the year 1934 unfolded, the President decided to seek a "middle way" between extreme economic nationalism on one hand and internationalism on the other. The current conduct of international trade threat­ ened to obstruct any solution to the world economic crisis. Since the late 1920's world trade and, even more so, United States trade had experienced a serious drop. The adoption of nationalistic economic policies by a number of nations played a significant role in this collapse. Ever-increasing tariff walls, import quotas, monetary controls, sanitary restrictions, and myriad other practices impeded the flow of world trade. During the period 1929 to 1933 world exports decreased 64,6 percent while those of the United States fell 75-2 percent. The American export industries, including agriculture, quickly felt the effects of disap­ pearing world markets. Consequently, the Roosevelt admin­ istration sought to enhance the revival of international trade in order to stimulate recovery of the American export industries in particular and the entire economy in general. With this thought in mind, in March 1934, President Roosevelt proposed a major change in United States tariff policy--a change designed to attack the economic national­ ism which he believed was currently stifling the flow of international commerce. The Reciprocal Trade Agreements Act sought to lower trade barriers by giving the President authority to conclude trade treaties with other nations without congressional approval. Roosevelt's proposal sparked a great deal of interest in the six upper mid- western agricultural states of North Dakota, South Dakota, Minnesota, Nebraska, Iowa and Kansas. By 193^ many farm spokesmen in the Upper Midwest had become convinced that the previous tariff policies had done little to further the interests of agriculture. The trade agreements pro­ gram seemed to offer a method to reopen foreign markets which they considered essential to agricultural prosperity. While many farmers and their spokesmen in the Upper Midwest initially saw great potential in the reciprocity program, not all midwesterners shared their enthusiasm. By 1938 the New Deal tari ff program had become, as the American Farm Bureau Federation Official News Letter said, "one of the most controversial issues ever debated by farmers." The economic and political discussion prompted by the Roosevelt tariff policy assumed a nationalist versus internationalist character as people in the six states of the Upper Midwest, as well as elsewhere, debated the pro­ gram's objectives and accomplishments. Those of an inter­ nationalist persuasion maintained that the United States must seek to lower tariff barriers in order to reopen for­ eign markets to American farm surpluses. The nationalists, on the other hand, contended that the days of prosperous vi foreign markets were gone and they demanded that the Roosevelt administration pursue a nationalistic tariff policy which would guarantee the entire American market to United States producers. An examination of midwestern editorial comment in newspapers and farm journals, correspondence and public statements of congressmen and the activities of the major farm organizations which had a large midwestern constitu­ ency reveals the hopes, fears and convictions of the mid- western farmer and his representatives as they evaluated the performance of the reciprocal trade agreements pro­ gram. While regional in the sense that it deals with only a six-state area, this study discloses the feelings, atti­ tudes and actions of midwestern agriculture in general, and its response to one important segment of the New Deal. The author would like to express appreciation to the many individuals and staffs who offered assistance during the research travel which covered l6 ,000 miles and many libraries and historical societies. A special word of thanks to Mr. Robert Richmond and his staff at the Kansas State Historical Society and the staffs of the Library of Congress, the National Archives and the Franklin D. Roosevelt Library. The author wishes to acknowledge the guidance and assistance of Dr. Gilbert C, Fite who in addition to di­ recting this study has been a continual source of vii encouragement and inspiration during the writer's grad­ uate studies at the University of Oklahoma. A special word of gratitude to my dear wife Jean who has endured four and one-half years of graduate school while at the same time working and encouraging the author's efforts. vxxx ECONOMIC NATIONALISM OR INTERNATIONALISM: UPPER MIDWESTERN RESPONSE TO NEW DEAL TARIFF POLICY, 1934-1940 CHAPTER I MIDWESTERN AGRICULTURE AND THE TARIFF The announcement of the Reciprocal Trade Agreements program in March 1934 opened a new chapter in the growing dialogue on the state of international trade and the rela­ tionship of United States tariff policy to that trade. The Midwest with its heavy reliance on agriculture had been vitally interested in tariff policy ever since the Civil War, but the relation of the tariff to overall agricultural prosperity had come in for closer scrutiny after the post- World War I recession. During the 1920's and early 1930's, the emphasis of tariff discussions experienced several changes, but it never diminished as agriculture failed to achieve full prosperity. With the beginning of the New Deal and the subsequent reciprocity proposal, the discourse became more vocal and controversial. During the 1920's there was very little criticism of the extreme protectionism afforded by the Fordney-McCumber 1 2 Act of 1922 in the increasing discussion of the tariff. Rather, the main emphasis was on how to include agriculture effectively within the framework of protection. According to James Conner, the major farm organizations were united in the belief that farmers stood to benefit immensely if agriculture could attain the same benefits from high tar­ iffs as industry.^ In fact, some suggested that if agri­ cultural tariff rates were boosted to the level of the manufacturing interests, the farmer could get back on the road to recovery- Only in isolated instances did the American Farm Bureau Federation, the Farmers Union or the Grange raise the question that perhaps all tariffs were too high. In addition to the battle to attain higher agri­ cultural tariff rates, farm representatives supported another attempt to further the interests of agriculture within the protectionist framework. The McNary-Haugen bills sought to make the tariff effective for agricultural products by establishing a government corporation to re­ move farm surpluses from the domestic market so that prices could rise behind a tariff wall.
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