The Washington herald., 1921-01-26
l have never seen a greater monster or
nliaeie than myseIf.-Montaigne
A Creditor Counry's Tariffs.

~ Europe will the United States and
its people $eoooo,oooooo by 1924. He es-
Inmates the present debt, including the government
loans and interest due, at $I4ooo,oooooo
This means that the people of this country
have bought European bonds and securities and
extended credits totaling around SI4ooo 100000
and that in the next two three years will add
another S6,oooooo,ooo to this.
It is to be hoped that this prophecy is correct
and that the S6,oooooo,ooo will be wisely Invested
to help and not burden the recovery of European
industry. That amount used IN this way can and
viii bring peace and prosperity to all these peo-
pies
But to do this, which should be the prime OBJ
jective, this huge should be placed largely in
the form Of investments. 1t should be used to
promote industry, the development of natural re-
sources the rebuilding of devastated areas with
their mills, factories and transportation facilities
1t should be used in each country to put its
people back in profitable work at industries famil-
lar to them and to which their resources and
physical conditions are adapted. Every dollar
should have this objective.
While this is being done it would seem but
that common sense which is wisdom to adjust
tariffs to this condition. 1t should be made not
only possible but certain that European countries
could pay both the interest and dividends, and
also set aside a retirement fund increasing
basis OF substantial value to the investment.
Congress and the people would therefore, nee
esssrily face conditions entirely new to the United
States in fixing tariffs. They would no longer
have in view primarily TO build up our own paying
ability. This would be the investor nation with
"a vast material interest based upon Europe's pay
ing capacity.
1t would be reversal Of the situation of the
years before the when the objective was to
make it not only possible, but comparatively easy
for Americans to pay foreign debts. Nov it will
be quite essential to make it as comparatively
sure that Europe can pay its debts to Us, in the
only medium possible-goods.
This OF course does not advise any sacrifice of
American industry production. 1t takes into
account, too the selling advantage which the ex-
change condition alone gives to Europe Those
people are living and working, producing and
trading much lower monetary standard than
are the people of this country.
But any hard and fast tariff schedules fix on
both the nominal difference in cost of production
and difference in exchange, will in fact constantly
increase exchange difference decrease. 1t would
then seem that by some arrangement whatever
schedules are determined as Immediately fair must
also be flexible.
There must be process by which read
justments could be constantly made as exchange
rates change. Moreover, these schedules should
keep lar enough from the prohlb1tive line to per-
NIT inflow Of trading: The very payment of
interest on this European debt will decidedly in
crease the buying ability of our own products, while
whatever might be done to impede this payment
will reduce, make uncertain, this buying ability
and might even bring disaster
The plain fact is that the United States is now,
and increasingly will be, so tied financially to
Europe that it will be impossible for it to think,
act, do business or legislate in other than world
terms. We are now business partners with all
other nations, and if this government stays out
OF the League of Nations it simply will refuse to
help itself collect its own dues from its own
debtors
1t Will refuse to associate socially and politi-
eally and In the broader fields of economics, with
its own business partners It will but refuse to
put substance and adequate security back of this
saoJooooooooo its European partners owe its people