Capital journal. (Salem, Or.) 1919-1980, 1921-03-07
Tariff Plans
Dangerous Is
Experts Word
Alleged Protection
W ould Prove Boom
erang to Supposed
BenefactorS

L
understanding of today's worlc
trade situation, influenced by any
provincial or political views, mus
guide the course of the tariff leg.
islation now pending cefore con-
gress If the United States is to ben,
eft in full measure from her posi-.
ton as creditor nation of the
world, according to the current is.
sue of american Goods and For.
eign Markets." the international
trade survey Of the Guaranty Trust
company of New York. The banl
emphasizes the dangers of plans
which imply commercial isolation
and of temporizing devices which
propose to hamper the free world
wide movement of the great staple
raw materials and food products
1t says, in part:
Whole Outlook Wrong
The emergency tariff act thai
passed both the house and the sen.
ate at the last session, but which
was vetoed by President Wilson
cannot be said to reflect any clear
appreciation of the present world
situation and the new relations
which the United States holds ir
interna nal trade and finance.
At a time when vast debts are
owed by foreign countries to the
United States-debts that are sc
great that the possibility of pay
ment in gold is out of the ques-
tion-it is a matter of concern
that it should be seriously propos-
ed to erect additional heavy bar
riers to such payment as might be
made through the importation OF
foreign raw materials, food pro-
ducts and manufactured commod-
tiles.
Fear Boomerang Effect
While the unfortunate position
of holders of agricultural products,
in whose behalf this legislation IS
chiefly urged, may be fully recog-
nized, it is stih difficult to see in
what respect the imposition of tar
iffs can help them materially, wnfle
it is certain that the effect upon
the welfare of the nation as
whole cannot fail to be seriously
adverse. There is no certainty
whatever that domestic markets
can be stimulated by tariff exclus-
ion of foreign goods, nor that do
nestle prices will thereby be ap-
preciably enhanced. If Canadian
and Argentine wheat, for example,
are excluded from the United
States, it is clear that this surplus
will then compete in foreign mar
kets with our own wheat exports,
with a resulting disadvantage 10
the trade which would probably
offset any supposed advantages
gained in the domestic market. The
chilling effect of the loss of for
eign markets upon our domesuc
industries will certainly be reflect
ed in a lessened demand for our
raw materials here. and this IN
turn will tend further to depress
the prices received for such mater
ials. Our farmers and cotton grow
ers. especially, should remember
that only as Europe's purchasing
mower is restored will she be able
TO buy the surplus products of our
fields, and that there is more TO
be lost in retarding the restora-
ton of Europe's purchasing pow
er than is to be gained by tariff
differentials.
Foreign Trade at Stake
The United States, with exports
of $4,000, 900, 900 in 1920, and with
an aggregate favorable trade bal
ance exceeding II billion dollars
for the last seven years, now has a
very heavy stake in foreign trade,
too heavy to ignore or to risk by
or ill-considered leg
islation. There was never a great
er need for a widespread recogni-
tion by the people of the United
states of the broad basic princi-
pIes of trade. 1t is axiomatic that
in the long view, nationsa must
prosper commercially with other
nations, and not at their expense
buying in interpational com meree
must approximately balance sell
ing. either through exchange oil
goods or services. or trade soon
lags and finally ceases. Ill-adsust-
Cd tr.da relations cannot persist
indefinitely.