Trade Expert Minimizes War Repercussions on U.S. Business

Repeal of the Arms Embargo is very unlikely to cause a war boom in this country and will affect American business much less than is generally realized according in Alvin H. Hansen, Lucius N. Littauer Professor of Political Economy.

The former State Department economist was inclined to minimize the repression of the European War on American business, and played down the economic importance of the Neutrality Act, in an interview yesterday.

Canada to Build Plants

Should Congress revoke the Embargo Act, the country would, of course, be able to sell directly to the Allies planes and tanks which would otherwise be built in Canada, Professor Hansen said. "If we don't repeal the Embargo, new plants will be built in Canada for the manufacture of heavy munitions," he added.

Already American industry is able to sell raw materials and partially finished products to Britain and France, it was pointed out.


Professor Hansen believes that the Allies will not be so dependent on American goods as in the last war, since the British Empire is far more self-sufficient than it was 25 years ago.

England Relles on Dominions

Remarking that "people don't realize the extent to which England has become dependent on her own Dominions," Professor Hansen pointed to the vast resources and new industrial plants in the Dominions for producing munitions.

Much of the Allied war material will be manufactured in the British Isles, he said. For "England has oriented her economy directly toward her war needs. It will be guns, not butter."

Professor Hansen expects the British to take drastic steps to regulate civilian purchases.

It will be some time before the Allies will be forced to import heavily from the United States, according to the international trade authority. If the Allies should buy large supplies of war materials from this country, he foresees a centralized purchasing agency here under Allied, and perhaps American, control.

No Individual Dealing

The British and French will never deal with individual American manufacturers, Professor Hansen maintains. "The days of fat war profits are gone."

He doubts that alteration of the Johnson Act, which prohibits leans to defaulter nations, would affect our trade with Britain. "I think she probably has ample resources to pay in cash for all of the goods she will need to buy from us," he stated.