Collapse In Congress In The 1930's

3. Collapse in Congress

Prominent scholars and economists alike proclaimed that the Havana Charter “would quickly take effect and change the face of the free world's economy.” (Diebold 6) Even before the Charter was completed, the Council on Foreign Affairs deemed that “The ITO Charter is the only available safeguard” against a “return to the systematic economic warfare which prevailed in the 1930's, with its political tensions, its economic wastefulness, and its...ventures fatal to the world at large” (Viner 628). Yet just a year after the Charter was completed, President Truman judged that there was no chance for the Charter to become approved by Congress and decided to drop the Charter entirely. Without ratification by the United States
For instance, authors like Kurt Radkte assert that the United States Senate rejected the Charter because it was “dominated by an isolationist mood”. (Radkte 31) Yet while such isolationists do play a part in the rejection of the ITO, blaming it’s rejection solely on isolationism oversimplifies, if not mistakens, the root cause of its rejection. As William Diebold, member of the commercial policy division of the State Department, convincingly explains, opponents of the ITO were often proponents of liberal trade who criticised not the fundamental concepts of nondiscrimination and liberal trade encapsulated within the ITO, but the way the Charter attempted to promote these principles. (Diebold 14) More specifically, their criticisms stemmed from the latter three pillars of the ITO: Economic development, international investment, and full employment provisions. That is not to say that other components of the Charter were without criticism; Indeed, the National Foreign Trade Council, made up exclusively of firms concerned with foreign trade and investment and one of the staunchest detractor of the ITO, issued a 161-page analysis that spelled out their objections to nearly every single line of the Charter. (National Foreign Trade Council) However, the main voices of opposition found criticisms within the latter three pillars of the ITO, which ultimately
The investment stipulations proved to be so objectionable to United States business groups that the Committee for Economic Development recommended Congress ratify the Havana Charter only if the articles dealing with international investment were eliminated. (Congress 445) The committee’s basic complaint was that a large amount of international investment would be needed to encourage the development of underdeveloped countries, yet the Charter does not provide private foreign investments with protection against discriminatory policies by foreign governments. (Congress 448/449) On a similar note, the American Bar Association pointed out that the crucial passages of the investment articles were full of adjectives like "just," "reasonable," and "appropriate." (Congress 531) By ratifying the Charter, the United States would lose the ability to protect American investors. Such provisions, said the businessmen of the National Trade Foreign Council, were worse than nothing at all and acted as a “terrific deterrent to private foreign investment.” (Foreign Trade 10) Unsurprisingly, investors directly threatened by the Havana Charter condemned the