Tariff Teetotalism
TARIFF TEETOTALISM AFTER having been well-nigh dead for a good while, ¦**• the tariff as an issue has bounded back into exuberant life. The Hawley-Smoot bill, with its endless lists of duty...
...But the two are alike in so far as they saddle Mr...
...Assuming that protectionism has benefited American industry during many generations, it was argued that the lever for raising farm commodity prices to the general high point ought to be placed in the hands of customs officers...
...But on the subject of tariff teetotal* ism he must speak out...
...While this situation would severely impair its chances in anything like a world-wide tariff war, it does imply that the only way in which principal and interest payments can be met is through trade...
...This doctrine seems particularly commendable at a time when growing unemployment suggests to all how imperatively necessary corporate regard for the common good has become...
...Nationalistic circles abroad are already so committed to anti-Americanism that they could hardly wade deeper...
...Max Winkler has found that the total of United States foreign investments, excluding national debts, aggregated more than $16,500,000,000 at the close of 1929...
...To the internationally minded, Senator Smoot has come to seem very like unto Mars himself, provoking enmities and bitter trade rivalry...
...The protesting economists concur in this view, holding that farmers generally, will be affected by higher prices on manufactured goods and by foreign reprisals against staple export commodities...
...Some of the HawleySmoot regulations most resented in the dominion are the new duties on hides, furs, dairy products and fish...
...Nevertheless the problem is serious indeed...
...The Hawley-Smoot bill, with its endless lists of duty increases, seems an indigestible document, but its effect upon political discussion suggests the famed properties of cod liver oil, yeast and Kentucky bourbon...
...And the economists, more than one thousand of whom have been publicly heard from, have profited by the opportunity to marshal their statistics and such deductions as followOstensibly this legislation had its primary source in the desire, to utilize the tariff for farm relief...
...The solution of the farm problem, for instance, must certainly be sought in efforts to take up the slack of inefficiency by absorbing surplus labor and bringing cooperative intelligence to the fore...
...It is hard to understand the temper of a mind capable of writing so stupidly...
...This situation is reflected in the tariff legislation...
...Hoover seems to realize this and to be groping for a solution...
...Of course Canada is in an unusually good position for this kind of retaliation, but Europe could take it up and so put a huge damper on our industrial activity...
...Certainly neither the Senate nor the House lacks men of distinction and experience...
...So far as one can see the final result would be simple...
...But the clamor from various manufacturing circles was equally strong, and once the bargainers got under way the only recipe for congressional solidarity was upward revision in the strangest possible forms...
...Why do this at all if at the same time gigantic tariff barriers shut out the good-will of other nations...
...In his Richard Cobden lecture, President Nicholas Murray Butler quoted approvingly these words of Garfield: "A properly adjusted competition between home and foreign products is the best gauge by which to regulate international trade...
...It has been widely accepted as a symbol of Mr...
...Renne concludes, therefore, that the vast majority of rural citizens have nothing to expect from the new tariff...
...the political embroglio which has been developed is another...
...The economic philosophy of the Hawley-Smoot bill is one thing...
...That, to all intents and purposes means war—not a conflict between armies but a struggle between the social organizations of peoples...
...Add such sums as this to the regular interest payments and one begins to sense the magnitude of these operations...
...This matter of reprisals has aroused much speculation...
...Whether or not Congress is now able to deal intelligently with such complicated problems is another matter...
...Possibly, however, the task is superhuman, not to be accomplished by an individual...
...The best reply to this query we have seen is that contributed to the New Republic by Mr...
...Essentially a compress of concessions, it does not embody a national point of view...
...that something like $47,000,000 extra will accrue from the $.34 a pound duty on wool, but that the beneficiaries can hardly include more folk than the wealthy western ranchman...
...Roland R. Renne...
...More philosophically considered, the question involved is the point at which protection begins to be a weapon of attack...
...Renne shows: that, owing to the steadily increasing production of butter, future prices will not be influenced by the new duties but may fall under the present figure which is below the price quoted for Danish butter in London...
...His own economic doctrine, particularly as expressed in the recent address to the United States Chamber of Commerce, has been broad and practical to a degree which has astonished even his friends...
...Our government spends millions in an effort to stimulate commerce, to effect curtailment of military strength and to foster diplomatic relations which may help advance the cause of world peace...
...Hoover with an exceedingly difficult problem...
...To insist upon this last would seem to have become the function of a President...
...The projected Canadian tariff program is an object lesson...
...How to apply it to tariff legislation—in particular how to make it triumph over Senate opposition—is, however, a mystery which must keep Mr...
...Hoover's inability to vanquish congressional sectionalisms or to get support for a comprehensive industrial program...
...Here and all the way down the line assistance is valuable but unearned prizes are not...
...The tendency to expect the federal government to create panaceas for social and moral ills has combined with a disposition to bargain for local advantages until most Washington solons can be little more than traveling salesmen for the folks back home...
...Even now the finished product is embedded in so much controversial soil that nobody is sure whether the plant has actually come up or not...
...Now a Europe which shoulders such a burden and at the same time faces constant and prohibitive discrimination against its products in American markets is a Europe which will, sooner or later, find effective ways to organize in opposition to the United States...
...Europe has absorbed 53 percent of American money invested abroad...
...On the whole it is a simple process—duplicating, across the border, the rates imposed by the assembled bargaining solons of Washington...
...The Department of Commerce estimates that if the plan goes into effect it will mean a loss of about $200,000,000 worth of Canadian business—more than a fifth of the total, which is in turn a little less than one-fifth of the value of all United States exports...
...It can be approached from two points of view— the effect on international relations by creating an attitude of bitterness toward the United States, and the economic effect upon investors in foreign securities or enterprises, who must count upon expanding rather than restricting world trade...
...The first domain is, of course, almost purely theoretical...
...Duties should be so high that our manufacturers can fairly compete with the foreign product, but not so high as to enable them to drive out the foreign article, enjoy a monoply of the trade and regulate the price as they please...
...As an antidote to the Hawley-Smoot bill, the dominion plans to impose retaliatory duties upon American products while granting favors to Great Britain...
...His failures may, after all, be the results of honest experimentation...
...the profit on $250,000,000 worth of business would be paid for by the consuming public in the United States without a penny's worth of compensation for anybody...
...Does the tariff do anything for the farmer...
...Taking the four commodities most affected by the proposed dose of protection, Mr...
...Hoover awake...
...and that while the increased tariff on flax will benefit growers of that commodity, these constitute hardly more than 1 percent of the farmers...
...that the consequence of the proposed rates on cream and milk will have for their chief effect cutting off the pres94 THE COMMONWEAL May 28, 1930 ent Canadian trade in Boston, with noticeable good results for dairymen generally...
...Thus a French journal, l'Animateur des Temps Nouveaux, commented upon the sale of American automobiles by saying that these should be excluded until such time as the United States lifted its embargo on champagne and cognac...
...Such good-will is easy to lose because of world financial conditions...
...During the past year European government loans to the extent of $71,421,000 were repaid in cash...
...During recent years, however, the congressional outlook has perforce become sectional...
Vol. 12 • May 1930 • No. 4
