STATE DEPARTMENT versus COMMERCE DEPARTMENT

Relations of the Commerce Department and the State Department are, unfortunately, none too cordial. The State Department is properly imbued with its responsibility for foreign relations and bristles against encroachments. In years past officials in that Department have, to use the Washington expression, viewed with alarm, the development of the Bureau of Foreign and Domestic Commerce. Why should that Bureau publish the consular reports? Why in the world should it possess its own commercial attachés? The commercial attachés are an especially sensitive point. In congressional hearings, State Department officials have stated that the the commercial attachés are unnecessary, simply duplicating the work of consuls. The bogey is held up that these commercial attachés, not being within the State Department, may upset the apple cart on some delicate matter of foreign policy, and are therefore a menace to the conduct of foreign relations. Still another point made against the commercial attachés is that they get all the glory and have taken the heart out of the consuls, who see these higherpaid commercial men coming into the field, getting more and more credit for their accomplishments and more and more space in daily Commerce Reports, making more frequent trips to the States, while the effective work of the consuls is overlooked. Therefore, the argument goes, the commercial attachés should be eliminated, or at least be a part of either the consular service or the diplomatic service proper, on the State Department payroll, subject to State Department administration, and opening up to the competent consuls or diplomatic secretaries.

The Commerce Department argument on the point has run somewhat

as follows: It is hopeless for the Commerce Department to handle the major work of a central trade information bureau without having its own resident men abroad, schooled to cover the developments of national significance in foreign legislation, commercial policies and trade currents, and instantly available on telegraphic instructions; the Commerce Department tried to get service of this kind from the consuls, through the State Department for years up to 1914, but the results were unsatisfactory; the delay in the transmission of instructions and results through the State Department is serious; the work calls for a trained commercial man giving his full time to the work of trade promotion and can not await the attention of officials picked for less specifically commercial duties and burdened with a multitude of other things; the upsetting of the diplomatic apple cart has not occurred in six years and is not likely to occur, since the intelligent commercial attaché can sense the points of nicety in any commercial situation having diplomatic aspects without having grown up in the diplomatic service, and moreover the head of the diplomatic mission always has control over the commercial attaché housed in the diplomatic establishment; military and naval attachés are army or navy men-why should the commercial attaché not be a Commerce man? The duplication charge can not be sustained-the consul who can properly cover the local matters of his district does not, even with a big staff, have the time, freedom of movement or other facilities for observing and covering the national matters; many ambassadors and ministers have praised the work of the commercial attachés and others have asked to have commercial attachés assigned to them; their acknowledged success

under Commerce Department selection and instructions is no indication that the work could be as successfully conducted under the State Department. And so on.

THE COMMERCE DEPARTMENT CASE

The Commerce Department solution would include an expansion of the commercial attaché service to have an attaché of the Department of Commerce at each important capital, and to have the consular activities in trade promotion limited to matters pertaining to the consular district. Strengthen the consulates by economic specialists, but do not expect the consulates to cover the national questions now being handled by the commercial attachés. The Department of Commerce also has something in the State Department to "view with alarm." It is the office of the Foreign Trade Adviser. On several occasions in the past the corresponding office in the State Department showed a tendency to go as itself the center of trade information direct to the American business man. From a Commerce Department viewpoint and from an outside viewpoint, such a development looks pretty clearly like unwarranted duplication. The trade adviser in the State Department has a function, but clearly that function is not, so long as the Bureau of Foreign and Domestic Commerce still works, the supplying of trade information to the American public. It works the other way, within the Department, and should be developed only to the extent that State Department administrative requirements justify.

vision for experts, for editors and general staff in the Bureau of Foreign and Domestic Commerce; more adequate administrative machinery within the State Department; a clearer delimitation of the work of consuls and commercial attachés; a clearer delimitation of the work of the office of the Foreign Trade Adviser in the Department of State; better coördination of the State Department and Commerce Department work in this field; a stronger, better paid and more business-like diplomatic service; a better paid consular service. There is the outstanding need of a concerted foreign policy on trade matters at least, and there are numerous minor adjustments and administrative betterments that could be made to advantage.

The foregoing comment on the points of disagreement between the two departments has been given in its baldest form. There is no sharp clashing of efforts between the Commerce and State Departments; in the main, they work harmoniously, and possibly the very existence of a certain rivalry between the two departments has been beneficial in spurring each to its best efforts. Talk of "divided control" of foreign service exists and an effort has been made in this paper to point it out frankly in its most extreme issues.

In England, they have had the same question to consider and the conflict of interests between the British Foreign Office and the Board of Trade was deemed serious enough to require legislative action. That action has set up a separate Department of Overseas Trade, poised midway between the

COMMERCE

In summary, the outstanding needs of our governmental foreign trade promotion work are: more adequate pro

controlling and centralizing all the foreign trade work of the British Government. The policies and administration of the Overseas are in the hands partly

of the Foreign Office, partly of the Board of Trade and partly of the Overseas itself.

Many interested American business men and officials believe that a separate Bureau or Department of Foreign Commerce, consolidating the present Bureau of Foreign and Domestic Commerce and its commercial attachés and trade commissioners with the foreign trade work now being performed in the State Department, with

joint control by the head of the separate Bureau or Department and the Commerce Department and the State Department, offers the biggest chance for improvement and coördination of our own governmental foreign trade. work. Mr. Harding, in a speech at Louisville, has indicated that he is considering this subject. It will undoubtedly come up for a hearing in this country, and probably in the not distant future.

S foreign trade matters have as

sumed more importance in the course of business in individual business concerns in the United States, they have naturally occupied to a growing extent the attention of the chambers of commerce and national and sectional industrial and trade associations. This development has been reflected in the activities of the Chamber of Commerce of the United States, which is a national headquarters for the chambers of commerce and most of the trade associations, as well as having an individual and associate membership itself, consisting of thousands of business men and business houses. From the time of its organization, in 1912, the National Chamber has continuously dealt with important questions in the growth and promotion of the foreign trade of the United States. This was contemplated in its organization purposes and has been noticeable from the outset in the resolutions and discussions in annual and special conventions and in the referenda by which the Chamber endeavors to reflect the concentration of business opinion on vital

national questions in the United States. The opening of a Foreign Commerce Department in the National Chamber in 1920 did not mark the taking up of a new activity but simply the recognition of foreign trade as one of the outstanding sides of American business presenting national problems. Adequate machinery was set up within the Chamber to assure proper attention to foreign trade matters arising in the regular course of the organization's work.

In the membership of the Chamber of Commerce of the United States are found such organizations as the American Manufacturers' Export Association, the tion, the Philadelphia Commercial Museum, the National Association of Manufacturers, the American Exporters' and Importers' Association, the Export and Import Board of Trade of Baltimore, and the Foreign Trade Club of San Francisco, all of which are either exclusively or to a very large extent concerned with the work of foreigntrade promotion. The membership also includes such chambers of commerce and similar organizations as the

New York Merchants' Association, the Chicago Association of Commerce, the New Orleans Association of Commerce, the Detroit Board of Commerce and the San Francisco, St. Louis, Seattle, Portland, Philadelphia, Cincinnati, Cleveland, Pittsburgh, Los Angeles and Boston Chambers of Commerce, to mention only a few of the most prominent local organizations maintaining definite and organized foreign trade activities.

Another important element in the membership of the National Chamber, from a foreign trade standpoint, is the American Chambers of Commerce in London, Paris, Milan and Naples, Brussels, Barcelona, Constantinople, Mexico City and Tampico, Buenos Aires, Havana, Rio de Janeiro, Sao Paulo, Shanghai, Peking and Tientsin. Further, national industrial and trade associations which have developed definite foreign trade activities, such as the Tanners' Council, the National Automobile Chamber of Commerce, the National Implement and Vehicle Association, the American Paper and Pulp Association and the Music Industries Chamber of Commerce, to mention only a few, are active organization members in the National Chamber. Every one of the organizations coming within these various classes has foreign trade matters, possibly in the shape of declarations or resolutions, possibly practical problems coming up in the run of business, which are taken up with the national organization in Washington. Foreign trade interests are recognized specifically in the appointment of two members of the Board of Directors of the Chamber of Commerce of the United States. Obviously, this character of organization membership and representation in the councils and work of the Chamber assures a pretty broad field of foreign trade endeavor, to say nothing about the problems and

inquiries presented by the business concerns which make up the individual and associate membership.

The broader activities of the Chamber of Commerce of the United States on foreign trade lines are numerous. It has taken part in building up the foreign trade promotion service of the government. At the first annual meeting the needs of improvement of the American consular service were taken up, and in 1913 a referendum gave the support of the organization membership to the development of the Bureau of Foreign and Domestic Commerce. In 1915 another referendum furthered the extension of the work of that Bureau and the improvement of the consular service on certain specific lines. The subject which later became embodied in the Webb-Pomerene Law was urged by the Chamber. The questions relating to the American merchant marine are another example of topics of nationwide interest bearing on American foreign trade on which the membership of the Chamber has gone on record and pressed toward constructive action.

In two of its national conventions, the organization has had special foreign trade meetings. It took the initiative in 1919 in inviting delegations of business men from Great Britain, France, Italy and Belgium to a conference at Atlantic City which led the way to the formation of the International Chamber of Commerce in 1920, and helped to clarify and point the way on some of the most clouded issues in connection with international financial transactions following the war. The Chamber of Commerce of the United States is the national organization in this country which has conducted the organization work of the International Chamber. Arbitration of commercial disputes between business men in the United States and buyers or sellers in foreign countries is

another line of foreign trade activity on which the Chamber of Commerce of the United States has made considerable progress. Following the first Pan-American Financial Conference, arrangements for the arbitration of commercial disputes between business houses in the United States and in Argentina were worked out with the Bolsa de Comercio in Buenos Aires. The agreement became effective in April, 1916, and some of the more serious commercial disputes have been settled under it. Similar agreements for arbitration have been negotiated with commercial organizations in some of the other Latin-American countries and further agreements are now being negotiated. The Chamber has also given its good offices in clearing up misunderstandings and bringing about satisfactory settlements in many commercial disputes between Americans and foreigners before the matters involved came up formally for arbitration. Increasing contacts with trade bodies in foreign countries are being made from year to year.

The Chamber is working to build up a solid appreciation of the importance of foreign trade, in every part of the United States, in which it is meeting with the coöperation of its organization members. Foreign trade matters are brought to the attention of the entire membership through regular publications: The Nation's Business has a distinct foreign trade slant, the Legislative Bulletin covers federal legislation touching on foreign trade and the General Bulletin carries a record of important government publications, regulations and orders affecting foreign business. The Foreign Commerce Department Committee of the Chamber, consisting of three members of the Board of Directors and nine other business men from various parts of the country, each directly interested

in some line of foreign business, meets every two months and recommends to the Board of Directors action on the most important questions that have arisen in the Department. A phase of the general work of promoting interest and increasing the spread of foreign trade education and publicity is the contact with the Department of Commerce and the Department of State. The Chamber arranges with its member organizations for the visit of returning government officials from abroad and foreign visitors, in delegations and singly, a strong point in developing interest and spreading information.

The Chamber is especially interested in the increase and betterment of the facilities for foreign trade, such as the postal service, the cable and radio services, shipping facilities, marine and other insurance, banking and all the services of foreign trade information,credit reports, reports on business conditions, trade opportunities, laws and rules and regulations in foreign countries which are pertinent to the business interests of the United States. The support given to the so-called McHugh Plan for a foreign financing corporation under the Edge Act, to operate on a large scale of long-term credit transactions in the foreign trade, as sponsored by the American Bankers' Association, is one concrete example of the Chamber's activity in connection with such matters. The Board of Directors of the Chamber, on a report by a special committee, recommended that the McHugh Plan be brought before all the members of the Chamber for their sympathetic consideration. In advance of the organization meeting in Chicago, a circular, with a covering letter giving all pertinent facts in regard to the plan, was sent to each member receiving service from the Chamber. Another example of this sort of work for better facilities is the Foreign Com