WHEN this Administration came into power on March 4, 1933, we knew that more than 40 million acres of land in the United States were producing material which could not be consumed within the country. We knew also that with the American government as it is, it would be impossible for a number of years to reëstablish a large American trade in world markets.
By suddenly changing long-established debtor and creditor relationships the World War stemmed and profoundly altered international currents of trade. In no other country was the shift from a debtor to a creditor position so sudden or of so great significance as in the United States. This country went into the World War owing other nations 200 million dollars annually on interest account and came out with other nations owing it 500 million dollars annually. Moreover, the production of our farms and factories was enormously stimulated during the war. Our financial and political leaders tided over the situation, or glossed it over, by maintaining a false market for our surpluses abroad. To do so, we loaned an average of more than 500 million dollars a year to foreign countries. While this false foreign market for American exports was being maintained, Congress twice raised tariffs. Schedules were raised in 1922 and again in 1930.
From 1926 onward it became increasingly plain that modern technique applied to agriculture and to the production of other raw materials was heaping up a world-wide oversupply. The reduced prices which resulted from these increased stocks had a serious effect on farm purchasing power the world over. Over-production played an important part in the ever-descending spiral which began in 1930. The situation was made worse, of course, by extraordinary nationalistic efforts put forth in nearly all of the food-importing nations of the world to raise as much as possible of their food at home. The import quotas of the British, the exchange quotas of the Germans, and the greatly increased food tariffs of nearly all European countries are well known; and it is also
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