The Washington herald., 1921-08-19
GUARANTY TRUST
RAPS AMERICAN
TVALUATION PLAN
issues Booklet Contain
ing Financial Analy-
sis of Situation.
WANTS NEW LAW
Sees Little Danger From
Flooding Country With
Foreign Goods.

FOTciSH UOOuS.
Although the adoption of a high
protective tariff for a few indus
tries may seem desirable. the pend
ing tariff bill has been subject
to much criticism, states the Guar
anty Survey. issued by the Guar
anty Trust Company Of New York.
The American valuation plan has
likewise been the subject of serious
objection. IL is pointed out Under
this plan the duty Is based on the
value of similar articles In the
American market instead of on the
cost of the article TO the importer.
The purpose of this innovation in
the law is to equalize the duty as be-
tween countries the value of whose
currencies fluctuate widely and
also to secure the full benefit OF
the results which the protective. ad
valorem duties are designed to pro-
duce.
Ad valorem levies. as compared
with specific duties. ii is pointed
out, are liable to variable and ar
bitrary Interpretation. Owing to the
Iations Of importers would be sub
ject to additional uncertainty. with
the consequence that they would
have to allow larger margins OF
profit. TO the detriment of consum-
ers. Moreover, as foreign goods In
crease in cost to the importer by
reason OF the appreciation of eI-
change, this scheme would operate
more promptly to debar them from
our markets than would duties
based on invoice valuations. The
intrinsic merits of q revival OF this
method Of valuation, therefore. are
considered extremely doubtful.
Prior to War.
Prior to the war, the United
States was q debtor nation and COM
paratively little thought was given
to the effect OF a protective tariff
on our export trade. Today, an al
together different situation obtains
and the adoption OF tariff law with
rates high enough to interfere Sc
riously with our export trade. II is
believed, would Gauss serious in
jury to our commercial and indus
trial life. !
The United States has become the
leading creditor nation and as soon
as foreign governments are pre-
pared to pay interest on their in
debtedness we shall be entitled to
receive more than 100000 900 an
nual interest payments from abroad.
While this amount may be offset
in considerable degree by tourists
expenditures, freights. insurs noes.
etc, the balance Is bound TO be in
our favor. even though no part Of
Il -
the relation of our exports to our
imports or the reinvestment abroad
of large capital sums must be ex-
be -liauidated. While it is true
that the date Of such liquidation
may be temporarily postponed
through the extension of credits
and the adoption of similar devices.
il Is, nevertheless, true that the
debt must be paid eventually in
goods. or not at all.
Meaning OF Increase.
10 is. Of course. important that
the highest possible volume of ex-
port trade should be maintained IL
we are to have normal production
in our mines and factories and on
our farms. and II we are not to be
forced to scrap'a large part Of our
new productive equipment. But an
increase in imports does not make
NECESSARY a corresponding decrease
in Exports It is possible that the
present relation between exports
and, imports may be reversed with
out in any way decreasing the
VOLUME OF exports. We may be
able to buy more without selling
pean debtors to pay off their obli-
cations without Gripping our in
dustries or decreasing our national
wealth in order to do so.
During the last few years we
have increased our production Of
many commodities far beyond our
own capacity to consume and we
have been developing foreign mar
kets. especially in Latin American
to absorb this surplus. From such
markets we import many articles,
some Of which are not produced in
this, country. II we now limit the
importation Of those goods by high
tariffs We should do irreparable
hartn to our export trade by pre-
venting the free exchange Of those
commodities which our customers
have to offer in payment for what
they-purchase from US.
- staEnation of Today.
The business stagnation of TODAY
is not due, as some advocates of
high. protective duties assert, to a
foodI OF foreign goods competing
with the produce of our own fields
and directories. Moreover, in large
part, our imports are non-competi-
tivemgoods. and 1t is in industries
represented by some Of these. such
as csftee and rubber. in which stag
naticn is most pronounced at the
present time. Although IT is esti-
mated that our export trade con-
stitutes only about 10. per cent of
the total trade OF the country, IL Is
commonly looked upon as the outlet
for our surplus productive capacity
OF agriculture, transportation and
manufacture and as a stabilizer of
business