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The 54-nation London Economic Conference, meeting in the summer of 1933, revealed how intimately Roosevelt's early foreign policy was entwined with his schemes for domestic recovery. This distinguished assemblage, in which the USA was represented,
had as a major purpose a frontal attack on the globe-girdling depression. It was particularly eager to stabilize national currencies on a world-wide front; and to such a course Washington had apparently committed itself in advance.
But Roosevelt began to experience a change of heart. He evidently believed that his gold-juggling policies were stimulating faint blushes of returning prosperity. An international agreement on currency might tie his hands; and, as an astute politician, he was unwilling to sacrifice probable recovery at home for possible recovery abroad.
The President "torpedoed" the London Economic Conference in the summer of 1933, in order to retain America's freedom to manipulate currency and exchange to her own advantage. The rise of Hitler, however, caused a change of heart, and Henry Morgenthau, Jr., Woodin's successor in the treasury, negotiated a tripartite pact with Great Britain and France in 1936, for stabilizing the dollar-pound-franc exchange.
A constructive measure for lowering trade barriers was the Reciprocal Trade Agreements Act passed by Congress in 1934 at the earnest insistence of Secretary Hull. This allowed the President to lower customs duties against a nation as much as 50 per cent in return for similar favors. Since these agreements did not have to be ratified by the Senate, the traditional log-rolling and pressure politics were bypassed. By the end of 1938, American exports to the sixteen nations with which Hull had concluded these agreements had increased 40 per cent over the figures of 1930.
The main trend of New Deal foreign policy until 1940 was to continue to avoid European commitments, but to cultivate New World solidarity, and to attempt to persuade Japan through diplomacy to respect the integrity of China. The Latin-American aspect really worked. Secretary Hull's reciprocity agreements helped every American republic to get out of the depression, and at Montevideo in December he signed a treaty to the effect that "no state has the right to intervene in the internal or external affairs of another". This made binding Hoover's disavowal of the Roosevelt corollary to the Monroe Doctrine. In accordance with its "Good Neighbor" policy, the United States in 1934 formally renounced her right to intervene in Cuba under the Platt Amendment, withdrew the last of the marines from Haiti, and increased Panama's annuity for the Canal Zone. Roosevelt himself attended an Inter-American Conference for Peace at Buenos Aires in 1936, promising to consult with Latin-American nations "for mutual safety".
Another troublesome situation with Mexico arose in 1938, under President Cardenas, who identified himself with the interests of the peons and union labor. Partly as a result of their complaints against British and American oil companies in Mexico, Cardenas expropriated all foreign oil properties in 1938. After four years of negotiations, a commission valued the confiscated properties at $24 million — about one-tenth of what the oil companies claimed.
These acts implemented the Good Neighbor policy and resulted in Pan-American solidarity in World War II.
