Courtesy Reuters

A Trade Policy for National Defense

NARROWLY interpreted, national defense means simply preventing hostile armies from landing on our shores and keeping hostile airmen from bombing our cities. If this definition be accepted, then the area to be defended might be limited to the United States and its possessions. But in the broader sense in which we find the term generally used today, national defense means protecting ourselves against a variety of threats to vital national interests, not only threats to our physical security but also threats to the stability of our economic organization and to the permanence of our free institutions. As the content of "defense" is thus expanded, we find that the territory we are concerned with defending is enlarged. We begin to think about Canada, the Western Hemisphere and the British Empire. We begin to realize, also, that the methods of defense at our disposal include more than battleships, airplanes and tanks. We have powerful financial and economic weapons, and these have the advantage that they can be used now while our rearmament program is still in its preparatory stages. It is with the use of these weapons, our buying and selling power in foreign trade, and our lending capacity, that this article will chiefly deal.

The Nazis have now brought under their political and military control practically all of Continental Europe, except Russia and the Baltic states. The extension of German power over the entire Mediterranean basin and the Near East seems not improbable. The economic potential of this area, assuming that Germany could integrate its industries and agriculture, is enormous. To find a combination of nations which would be equally self-sufficient and equally powerful, judged by the ability of their economies to sustain modern armies and navies, one would have to bring together practically the entire non-German world.

The 400 million inhabitants of this German-dominated area would include some of the world's best disciplined and most productive industrial workers. The vast expanse of the area, lying between the North Sea and the Black

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