The Washington herald., 1921-07-18


OTTAWA. July 17.-The new
Fordney bill is the subject Of much
earnest consideration both by Cana
dian business generally and the
government Affecting as it does
possibly about 100000. 900 of ex-
ports on last years valuation. or
fully one-third Of the total value Of
Canada's exports to the United
States, IL is naturally a matter of
much concern: but hardly of less
Importance is the question OF its
proba BILE effect on imports from the
United States.
As Canada's ability TO purchase
is in direct proportion to her ability
to sell. it can hardly be otherwise
than that the loss OF such a large
amount of trade will make a big
hole in the ss5e. 100000 OF commod-
itics that this country imported from
the republic during the last fiscal
year. Even under the stimulus OF
comparatively high premium on
American funds. which had the ef-
feet OF increasing exports to the
United States to an extent never
experienced before. the trade bal
ance in favor Of the republic last
year remained as high as about
$500. .oo0. 900. II Canadian exports
are reduced anything like the ex-
tent that the trainers Of the new
tariff bill expect. then the balance
Of trade will undoubtedly result in
an exchange rate SO high as to very
effectually check imports from the
United States.
Exchange Rates Affect Trade.
The rate OF exchange is hound to
be a mucn more important factor IN
regulating trade between the two
countries than IL has been in the
past. This is quite understood by
many American concerns doing bus
mess with this country. and who.
realizing the danger to their own
| interests through an unduly appre-
ciated premium on American funds,
are endeavoring to oounteract this
effect through the promoting of a
trade with Canada" movement. But
efforts of this kind will be quite set
| at naught by legislation such as is
| embodied in the Fordney bill. now
before Congress.
In view of the very heavy invest
ments made by Americans in Cam
| ada during the last few years, IL Is
| rather surprising that the tariff
should be raised to such an extent
as to make the payment of the an
nual return. which must be in COM
modities or services. more difficult
And yet the proposed scale OF du-
ties cannot but have this effect
II is impossible TO say at this
time what the policy of the gov
ernment will he on this new tariff
Legislation. The revision of the
tariff. promised last spring. was
nurposelv left over until the ma
ture of the permanent tnrifT Iegis-
lation was made known. This how
ever. cannot be determined before
the middle of the summer. The en-
pectation is that the strong objec-
| items to which some features of the
hill will be subjected. especially
that relating to lumber may have
the effect of considerably modifying
its provisions. On the main fea-
lures Canadian opinion is reconciled
to the inevitable.
Earlier Tariffs More Injurious.
While the new tariff bill will bear
heavily on certain branches of Ca
madam industry, its general effects
| Will hardly be as severe as were
felt when the reciprocity treaty was
denounced nearly sixty years ago.
| nor as severe, indeed. as those that
followed the enactment of the Nc
kinley tariff. Canada survived
these experiences. and while she
| would sooner trade more extensive
ly with the United States. she will
| survive any new fiscal legislation,
severe though 1t may be. Forced
out of the American market. she
will seek new markets in other
| countries. For this task she is well
prepared. For one thing. she has
an extensive foreign banking con-
| nection, the branches of her char
| tered banks now numbering about
| two hundred and fifty.
II the Harding Administration
nanifests a desire to enter into a
| reciprocal trade arrangement. un-
| doubtedly such advances would be
! well received in this country. The
close association of these two coun-
| tries during the war and since has
| naturally prepared the way for
closer relations in trade, and the
tendency in this direction in Canada
is probably stronger than at any
other time during the last twenty