Trade Not Aid

The Eisenhower Administration has been anxious to represent itself as standing for political morality at home and liberal policies abroad. Its recent decision to reject the low bid of a British firm for turbines for an Arkansas dam has not helped to complete this image.

Acting contrary to its original plans, and obeying instructions of the Office of Civil and Defense mobilization, the Army Corps of Engineers has accepted a bid of $1,757,000 from a Philadelphia company and has rejected an English Electric Company bid that was $300,000 lower. In doing this, it was allegedly acting under the "Buy America Act," which provides for the rejection of foreign contracts in cases of national security.

In recent years the Act has become a protective devise for avoiding the liberal trade policies so hotly championed by the Administration. The Act provides that to require acceptance a foreign bid must be at least six per cent lower than a domestic one, and to this is added another six per cent in the case of unemployed areas. The English bid, however, even after import duty, was 19 per cent lower.

To avoid this argument, the Administration has urged vague claims of "national security" requiring the operation of the Philadelphia contractor. Since the war, this firm has been awarded contracts in England totalling over twelve times the value of the present one, all of which have been in areas affecting the "national security" of Great Britain. To discourage British trade is to invite retaliation, which would reduce the business of the very American company whose continued operation is the alleged goal of the present contract. Critics also point out that earlier the Administration said the dam was not worth constructing, but now it seems that its importance is such that the extra cost of the high bid is unimportant.

In any event, there is much resentment abroad that foreign bids are first invited, and that when successful they are then rejected on grounds which should have precluded their invitation. Secretary Dulles, hard pressed, conceded this "imperfection," but found the decision satisfying. His remark failed to comfort the British government, which, often at its own political expense, has supported the American policies of freer trade and economic interdependence. It has managed to stabilize the pound, increase convertability, maintain debt payments, and encourage sales efforts in the dollar area-all objectives which America has been encouraging. Now, with elections approaching, it appears that the United States is abandoning these objectives and is helping the Socialists.

Equally damaging are charges that the Philadelphia firm secured the contract due to lobbying on the part of Senator Hugh Scott, Republican of Pennsylvania. Shortly before his election last November, Scott told his electorate that he had personal assurances from the While House that the local company would get the contract. At that time the Army had not even completed its study of the bids. This has aroused the charge of "prostitution of the country's trade policy for political reasons," from the Democratic chairman of the Foreign Trade Policy Subcommittee.

Whether from caution, unconcern or inability, the President has failed to clarify the issue. His failure to do so not only raises suspicious of domestic political pandering, but has weakened international trust in the policies and integrity of the United States.