The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-21
VICIOUS CIRCLE
DROPS BRITISH
MONEY VALUES
Tariff Board and McKenna
Throw Light Oh Menace
/ in Fall in Exchange.
HEAVY TAXES STIFLING
Excess Profits Levy Factor in
Striking at the Root of In
dustrial System.

Specie, Cable to THE New York HERALD.
Copyright, 1890. bp TIE NEW YORK HERALD.
New York Herald Bureau.
London, Nov. 90
Two statements this week throw
powerful sidelight on why the pound
sterling is at discount of more than
25 per cent. in the United States. The
Tariff Commission has just published
figures showing that while British ex-
ports have increased largely in money
value since before the war they have
actually shown an alarming decrease
in volume. The commission calls at
tention to the fact that the changed
value of money vitiates pecuniary COM
parsons.
The other statement was an address
by Reginald McKenna, head Of one of
the largest London banks. before the
Manchester University, in which he
showed how heavy taxation was strik-
ing at the root of the nations entire
industrial system by compelling mel
chants actually to borrow money 70 pay
taxes, at the same time depriving thcn
Of any stimulus to greater and moro
efficient production, because the Govern
ment seizes all their rewards.
Both statements chow how each s'tua-
ton works to further the imitation of
prices and involves the Empire in II
further vicious circle of falling ex-
change. Recognition of the hard facts
of the case and efforts to act accord
ingly already are evident, however This
probably will be reflected in raising the
value Of sterling in the American mar
kets during the course of next week.
Government Realizes Facts.
Tho Government, realizing Its position.
already has slgnified in its decisions TO
hold down armament expenditures ana
10 reduce commitments to such "adven-
lures" as that in Mesopotamia. Mean
while, too. there is strong agitation
for reform of the excess profits tax and
other shocking burdens on industry.
Even Austen Chamberlain. Chancellor OF
the rlxcheouer and father of the excess
profits scheme, has admitted 1t Is not
pleasant expedient and that he adhered
10 It only because no better one was sug-
eested,
The most recent Exchequer figures,
however have revealed that the excess
profits tax was no longer justified even
as an expedient, as industry, by refinanc-
ing. reinvestments and reducing profits,
has already cut down contributions IN
such fashion as TO put the entire budget
awry and necessitate an almost entirely
new deal" on the first OF next year.
However, naval and military Expenditures
have been cut down already to what the
imperialsts call below the danger line
Although various subsidies. like those
on bread and coal, and out of work doles
and unemployment and other insurance
contributions are kept up growing prot
ests are being aroused because OF IL. as
was instanced in the revolt of the Tory
members of the coalition and the defeat
OF the expensive new health legislation
last Tuesday. The troublesome increase
in unemployment and the general air OF
uncertainty here Is inclining politicians,
laborltes and capitalists to welcome a
new deal. even though each OF these In
terests may have to sacrifice some of
their pet schemes.
Figures Awaken the People.
Actual traders for a long time have
been aware that British exports were not
as healthy as they looked. while the man
in the street has been somewhat lulled
by figures showing great increases In
export values In money. The tariff
commissions figures acted as a cold
douche on many Of these persons.
Iron and steel exports are a typical as
we'll as a most important illustration.
Values rose from f54, 800. 900 in 1913 to
f63.500,000 in 1919. while the tonnage
exported fell from s.9o0, 900 tons in 1919
to 2200 600 tons I'm 1919. The iron and
steel trade shows continued depression
- 1920. although other groups show
some signs of improvement in 1920 from
what might be called the postwar asS-
justment depression Of 1919. There Is
an impressive general discrepancy be-
tween the figures for before the war and
those for now and there is serious fall
I'm tho figures for September and Octo-
months of 1920.
Exports of cotton piece goods amounted
TO 7.075.252.000 yards in 1918. while In
1919 they were only 3,523. sec. 900 yards.
The first six months OF 1920 show 1885,
Tss, 900 yards exported. as against S.5s2,-
TSs,S00 yards for the same period in
1913. with shipments last October only
half OF what they were In October, 1913.
Woollen and worsted yarns are placed al
54.716,600 pounds in 1913. as against
2s.677, 400 pounds In 1919. with further
decreases In 1920, shipments In October
of this year being half of what they were
IN 1913.
Wool tissues alone show a substantial
Increase in October, 1920, amounting to
16,444100 square yards. as against H.
s54,600 square yards in 1913. Linen
piece tOouS are pldceu NJ lt5,bol,3UU
yards In 1913 and 76.863.6 yards In
1919, and although there v-'.- II substan-
tial increase during the first six months
of 1920 there was heavy drop in Octo-
Der, 1920. when they are put at 4,043.500
yards, as compared with 1890, 900 In
1918.
Commodities show Effects.
Boots shoes, hats and bonnots prac-
tically duplicate these figures. although
during the last few months the situation
with regard to these articles has been
slightly more encouraging.
Cotton gloves. however. constitute
line wherein is shown the strength OF
the revival OF German competition. AL
though 1919 showed n fine Increase over
1913, testifying the extent the British
had replaced the Germans in this mar
kct, 1920 - an eloquent testimony Of
Tho German recovery,