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Editorial
October 27, 1947
The Nome Nugget
Nome, Nome County, Alaska
What is this article about?
The editorial warns that Mexico's new restrictions on US luxury imports, due to shrinking dollar reserves from heavy post-war purchases and recession, foreshadow broader declines in foreign trade unless dollar-poor nations receive loans, credits, or expand exports. It highlights blocked cattle sales due to foot-and-mouth disease and urges productive use of dollars for balanced trade.
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Full Text
Mexico's Buying Curbs
(Washington Post)
THE DRASTIC REDUCTIONS that Mexico has laid upon a long list of luxury and non-essential articles imported from the United States is only a foretaste of what is to come unless vanishing dollar balances of other nations are replenished by loans and credits or through an expansion of their exports. Since the end of the war Mexico has been buying heavily from this country, with the result that her dollar balances have shrunk from 355 million to 200 million. Mexico is also suffering from the effects of a business recession accompanied by a drop in prices that helps to cut down foreign buying.
Although the new restrictions are said to be temporary, it is obvious that Mexico cannot relinquish them unless she succeeds in expanding her exports. Otherwise the drain on her dollar reserves would become alarming.
One source of dollars that would normally be open to Mexico is the sale of cattle to the United States. At present, however, large herds are waiting at the border, denied entry into this country because of the prevalence of the foot and mouth disease in Mexico. If Mexico would permit Americans to enter the country, slaughter these cattle and pack the meat, it could be safely admitted, with advantage to both countries. So far, however, the Mexicans have rebuffed all our overtures and the cattle remain on overcrowded scanty ranges where they are rapidly deteriorating.
Mexico, therefore, presents an object lesson for us to consider in appraising the future of our foreign trade, in respect not only to exports but to imports, as well. For it is evident that we cannot bolster up our abnormally large export trade indefinitely by supplying other countries with dollars they have not earned with which to pay for our export. The dollars earned or lent must be put to work productively to enable foreign countries to send us more goods in payment for our exports. If dollar-poor countries were to rely solely upon reductions in imports to produce a balance in international payments, the result would be a progressive decline in foreign trade, injurious to all trading nations.
(Washington Post)
THE DRASTIC REDUCTIONS that Mexico has laid upon a long list of luxury and non-essential articles imported from the United States is only a foretaste of what is to come unless vanishing dollar balances of other nations are replenished by loans and credits or through an expansion of their exports. Since the end of the war Mexico has been buying heavily from this country, with the result that her dollar balances have shrunk from 355 million to 200 million. Mexico is also suffering from the effects of a business recession accompanied by a drop in prices that helps to cut down foreign buying.
Although the new restrictions are said to be temporary, it is obvious that Mexico cannot relinquish them unless she succeeds in expanding her exports. Otherwise the drain on her dollar reserves would become alarming.
One source of dollars that would normally be open to Mexico is the sale of cattle to the United States. At present, however, large herds are waiting at the border, denied entry into this country because of the prevalence of the foot and mouth disease in Mexico. If Mexico would permit Americans to enter the country, slaughter these cattle and pack the meat, it could be safely admitted, with advantage to both countries. So far, however, the Mexicans have rebuffed all our overtures and the cattle remain on overcrowded scanty ranges where they are rapidly deteriorating.
Mexico, therefore, presents an object lesson for us to consider in appraising the future of our foreign trade, in respect not only to exports but to imports, as well. For it is evident that we cannot bolster up our abnormally large export trade indefinitely by supplying other countries with dollars they have not earned with which to pay for our export. The dollars earned or lent must be put to work productively to enable foreign countries to send us more goods in payment for our exports. If dollar-poor countries were to rely solely upon reductions in imports to produce a balance in international payments, the result would be a progressive decline in foreign trade, injurious to all trading nations.
What sub-type of article is it?
Economic Policy
Foreign Affairs
Trade Or Commerce
What keywords are associated?
Mexico Import Curbs
Dollar Shortages
Foreign Trade Balance
Cattle Exports
Foot And Mouth Disease
Post War Economy
What entities or persons were involved?
Mexico
United States
Editorial Details
Primary Topic
Mexico's Import Restrictions And Implications For Us Foreign Trade
Stance / Tone
Cautionary Warning About Declining International Trade
Key Figures
Mexico
United States
Key Arguments
Mexico's Dollar Balances Shrunk From 355 Million To 200 Million Due To Heavy Us Purchases Post War
Business Recession And Price Drops Reduce Mexico's Foreign Buying
Import Restrictions Are Temporary But Require Export Expansion To Lift
Cattle Sales Blocked By Foot And Mouth Disease; Suggests On Site Slaughter Solution
Us Cannot Sustain Exports Without Foreign Nations Earning Or Borrowing Dollars Productively
Relying On Import Cuts Leads To Declining Global Trade Harmful To All