like manner be brought under limited regulation, adequate to prevent injurious competition but not so comprehensive as to destroy individual initiative. All such regulations are, it is true, limitations upon the freedom of action of the particular state; but they are limitations upon a technical freedom which is of little value in comparison with the larger actual freedom resulting from the removal of obstacles which it is beyond the power of the individual state to remove. The American States have great natural resources as yet developed only in part. How is the development to proceed without giving rise to conflicts of interest between producers and consumers and between the individual members of each group? The answer may well lie in cooperative agreements for the mutual benefit of all parties. This would be to give practical application to the Good Neighbor policy and to permit law to perform its proper function of creating ordered liberty. Obviously such cooperative agreements will require some measure of constructive imagination on the part of the American Governments, as well as the ability to look beyond the more immediate gains of the present to the larger advantages to be obtained in the future.

A concrete illustration of the possibility of adjusting the conflicting claims of states in the more difficult political field by the adoption of new constructive rules of law may be found in the resolution adopted at the Conference on Problems of War and Peace, providing that the new Organic Pact of the Inter-American System is to be accompanied not only by a Declaration of the Rights and Duties of States but by a Declaration of the International Rights and Duties of Man. The first of the two declarations is to follow the traditional lines of inter-American declarations of fundamental principles. The second declaration is novel, and its adoption may

have far-reaching effects within and beyond the regional group of American States.

Resolution XL of the Mexico City Conference, in making provision for the formulation by the Inter-American Juridical Committee of a draft declaration to be submitted to the American States, contemplates that the international protection. of the essential rights of man would eliminate the misuse of the diplomatic protection of citizens abroad. If it should, indeed, be able to do so it would be a most valuable contribution to the development of inter-American law. For upon no other subject have American jurists found it more difficult to formulate constructive rules of law to regulate the conflicting interests of their governments. The declaration itself would constitute a standard of inter-American conduct which all of the American Governments would agree to observe as part of their individual national law. In presenting its separate project on the subject to the Conference on Problems of War and Peace, the Mexican delegation proposed that there be included in the inter-American system "an organ specially designed to watch over the regulation and practical application of the principles proclaimed in the declaration." Acting on this proposal, the Inter-American Juridical Committee proposed the creation of a special international court, the statute of which should be included as an integral part of the instrument in which the Declaration of Rights is adopted. The practical effect of such a court would be to eliminate claims of one state against another based upon alleged denial of justice. Additional constructive rules must, of course, be formulated covering other phases of the problem than the mere protection of fundamental rights. But there is reason to believe that this will be less difficult once the inter-American

community has adopted procedures for the orderly settlement of conflicting claims. Experience has shown that at times it is the lack of adequate procedures of settlement which makes it difficult to adopt substantive rules of law, just as at times it is difficult to persuade states to resort to pacific procedures when the rule of substantive law is uncertain.

What is true between the American nations is equally true in respect to the larger world community. The process of eliminating areas of conflicting interest by adopting general regulations of a constructive character has already begun, and the establishment of the Economic and Social Council of the United Nations gives promise of definite accomplishments in the near future. Each minor area of conflict that can be brought under control encourages the attempt to control more difficult ones. If the International Monetary Fund, for example, can succeed in regulating the

currencies of states and putting foreign exchange upon a stable basis, governments will then be in a position to go further and bring under control the more sharply competitive phases of their economic relations. This will call for some sacrifice of "sovereign rights," but the result will be an increase in "effective sovereignty," which is what counts in the daily life of the people.

The principle of equality has found expression in numerous inter-American declarations of fundamental rights, and it now stands at the forefront of the Charter of the United Nations, which proclaims that it is based on the principle of the "sovereign equality of all of its members." What meaning is to be attached to this principle which at first sight seems inconsistent with the wide divergencies of territorial size and degrees of material progress that are to be found both among the American States and in the world at large? The answer is not difficult. The principle

of equality rises above considerations of size of population, of extent of territory, of degrees of material resources. It is concerned with respect for the state as a member of the international community; it implies recognition of certain fundamental rights associated with the very personality of the state; it asserts that the same rules of law apply to one state as to another, the same rights and the same duties. That granted, the American States have had no difficulty in recognizing different degrees of interest within their group in the solution of political, economic, and social problems, where states with larger resources may be expected to assume a responsibility commensurate with their ability to contribute to the desired objective.

No principle has been more insistently proclaimed by the American States of recent years than the good faith of treaties. Mutual trust in the pledged word is an essential condition of the peaceful cooperation of states, as it is an essential condition of peaceful cooperation between individuals. To break faith between nations, as to break faith between individuals, is to destroy confidence and to invite open anarchy in international relations. But the maintenance of this principle is possible only if account is taken of the fact that many treaties have been entered into in the past under circumstances of direct or indirect compulsion; and it is natural that a state, acting under compulsion, should be reluctant to regard its good faith as pledged to the observance of the treaty. In other cases a fundamental change of circumstances may have taken place since the treaty was first entered into. How are these situations to be met? Obviously not by permitting the unilateral repudiation of treaties. But the alternative can only be the recognition on the part of the international community as a body of its responsibility for the removal of the condi

tions that make the continuance of the treaty unduly burdensome. Here again the principle of cooperation can be brought into play as the alternative to a narrowly nationalistic attitude. A constructive rule applicable to all similar situations within the international community may take the edge from the controversy between two states each seeking its own particular advantage in the matter under dispute.

In making provision for the formulation of a Declaration of the International Rights and Duties of Man, the Conference on Problems of War and Peace anticipated the provisions of the Charter of the United Nations looking to the promotion of respect for human rights and fundamental freedoms. A generation ago this matter was left to the separate control of the individual states. It was a domestic problem with which other states were not concerned. But it has now come to be seen that there is a very close connection between respect for human rights and the maintenance of peace between the nations. Unless there can be mutual understanding between states there can be no confidence between them, no real trust, no reliance upon the faith of treaties. The channels of communication must be kept open at all times. The sources of information must be accessible to all. The people must at all times be able to form just judgments of the foreign policy of other nations, as well as of their own. Any attempt of a government to stifle the expression of public opinion or to guide it into false channels must inevitably have the effect of destroying the confidence of other countries and of creating an attitude of suspicion hostile to international peace.

The problems before us are numerous and in some cases intricate; but the solution of them is not beyond our grasp. Our more immediate task is to endeavor to

create so large a body of common interests between the nations as to make the conflicts of interest between individual states seem relatively unimportant. This task. has already been begun, and there is evidence of progress year by year. In due time nations will come to realize that their stake in the maintenance of law and order in the whole international community is so great that no immediate interest of their own could warrant them in thwarting the general welfare. On the other hand, while these measures of cooperation are going forward, nations must reaffirm their determination to respect

the personality of other states and to refrain from the use of force in their relations with one another. Upon the good faith of these reciprocal pledges rests the possibility of that mutual confidence without which no progress can be made in the critical task of disarmament; and it would appear that no better assurance could be given by a state of the sincerity of its individual pledge not to encroach upon the liberties of other states than the fact that within its own borders it observes scrupulously the human rights and fundamental freedoms of its own people.

THE war has profoundly affected the currents of world commerce. Not only were the normal trade routes temporarily disrupted by the necessities of military action, but the pattern of international exchanges has been altered for an indefinite period by the physical destruction and social upheaval in some areas, and the stimulus given to new production facilities in other regions.

Among the more significant changes has been the increase in the productive capacity and the trade potential of the Western Hemisphere.

During the war years the foreign trade of the United States rose to unprecedented levels. Exports in 1944 soared to a total of $14,257 millions (excluding United States shipments to its armed forces overseas), of which all but about $3,000 million represented lend-lease shipments. Imports were also very large, reaching the wartime peak of $4,136 million in 1945. The volume of importations was held down by the physical shortage of goods and ships, and the shutting off of some important customary sources of supply.

Since the end of the war lend-lease deliveries have tapered off rapidly, but "cash" exports have risen. It is expected that the value of United States foreign trade during 1946 will amount to slightly under $10,000 million of exports, and slightly under $5,000 million of imports. If these expectations are realized, this will constitute the largest peacetime foreign trade in the history of the United States. During the decade of the 1920's, the United States annual exports averaged

$4,757 million and imports $3,960 million. During the 3-year period, 1936–38, United States annual exports averaged $2,967 million and imports $2,489 million.

Of course, the large values of recent years are in part accounted for by price increases. The unit value of exports (other than lend-lease) in 1945 showed an advance of 45 percent over the 1936-38 level, and the unit value of imports in 1945 showed an advance of 55 percent over the 1936-38 level.

The wartime trade of the United States with the other American republics showed a relatively greater increase of imports. than of exports. Purchases included not only larger amounts of strategic and critical materials usually procured from Latin America, but also included substantial quantities of essential goods which had previously come largely from the Far East. There were also important purchases of such articles as alcoholic beverages, candy, jewelry, leather goods, and textiles. On the other hand, United States exports were held in check by the Gargantuan appetite of the military services, although the United States allocated to the other American republics supplies of manufactured goods and raw materials on the "share-and-share-alike" principle.

While the exigencies of the war resulted in temporary inconveniences and hardships to all participants, there is reason to believe that the steps taken during the war to promote Latin American exports to the United States may have the effect of opening up permanently larger markets in the United States for the products of the other