New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-25
Sees New Effect of
Tariff Caused bv
Economic Change
Guaranty Survey Points Out
Difference Between Time
of Payne-Aldrich Bill and
the Fordney Measure

The changed economic status of the
country since the war, according to The
Guaranty Survey, monthly review of
business conditions here and abroad
published by the Guaranty Trust Com
pany, renders the effect of a tariff now
much different from that of the Pavne
Aldrich bill.
Prior to the war;" says The Survey,
the United States was debtor nation.
and comparatively little thought was
given to the effect of protective tariff
on our export trade. To-day en- alto
getner different situation obtains, and
the adoption of tariff law with rates
high enough to interfere seriously with
our export trade is destined to cause
Serious injury to our commercial and
industrial life.
1T is estimated that prior to the be-
ginning of the war European capital was
invested in American securities to the
approximate amount of $4,000 900 600.
The net payments Of interest and diyi-
dends on this capital, after deducting
the amount owed to citizens of the
United States on account of their for
elgn investments, required the annual
remittance abroad Of between $175, 00O,-
ooo and S225,oo0,oO0. Other payments,
such as expenditures of American tour
lists, remittances by migrants, freight.
insurance, etc, brought the total up to
about S5OO,000 600 In order that these
payments might be met it was neces-
sary that our merchandise exports
should exceed our imports by approx
lmately the same amount. And in fact,
the average excess of exports over i'm
ports for the years 1911 to 1914, in
elusive, amounted to approximately
$3.50, ,000
HOnr y,ro,u,r c+o4,,u l..
pletely reversed. From 1915 to 1917,
inclusive, the demand of European ma
tons for our goods was so great that
at the time of our entrance into the
war our Indebtedness to European in
vestors had been more than balanced
by the excess of our exports over i'm
ports. After we entered the war we
loaned approximately $4,000, 900 900
to the Allies, but up to the present time
the accumulated interest thereon. In
addition to this amount, we put billions
more at the disposal of Europe through
the repurchase of large quantities of
American securities held there and by
large private investments in foreign
currency and dollar bonds, as we'll as
short-term export credits.
The United States has thus become
the leading creditor nation, and as
OWN e'1 ASAStSI governments are pre-
pared to pay interest on their in
debetedness we shall be entitled to re-
ceive more than $500,o00,OO0 annual
interest payments from abroad. While
this amount may be offset in consider
able degree by tourists expenditures,
freights, assurances, etc, the balance
is bound to be in our favor, even though
no part Of the principal is paid. A
change in tho relation of our exports
to our imports or the reinvestment
abroad of large capital sums must be
be liquidated. While it is true that
the date of such liquidation bay
temporarily be postponed through the
extension of credits and the adoption
of similar devices, it is, nevertheless,
true that the debt must be paid even
| tually in goods, or not at all.
THE business stagnation Of to-day
is not due, as some advocates of high
protective duties assert, to a food of
foreign goods competing with the prod
uce of our own fields and factories.
Moreover, in large part our imports
are competitive goods, and it is in
industries represented by some of
these, such as coffee and rubber. in
which stagnation is most pronounced
at the present time. Although it is es-
tildteu thaI Sui eHpoit lidUc consul
tutes but about 10 per cent of the total
trade of the country, it is commonly
looked upon as the outlet for our sur
plus productive capacity of agriculture.
transportation and manufacture and as
q stabilizer of business. A healthy and
prosperous foreign trade has become Of
| increased Importance to a great many
of our citizens. 1t is consequently Of
serious domestic concern.
while it is possible that high pro
tective tariff on some articles may be
proper, there is surely nothing in our
| economic situation which justifies the
adoption of n general tariff policy that
will in effect erect barrier around our
lports and isolate us commercially"