The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-09-16
TOPEKA STATE JOURNAL
Information Bureau
EREDERIC ,. HAsKIN. Dsrecbse.
washington, d. O.
NEW TARIFF AMENDMENTS.

] representatives within short time
will report to their houses new
measure revising the rates of customs
duties which must be paid to bring
foreign merchandise into the United
States. This measure Is of unusual in
terest because it represents the first
great tariff revision since the European
war, a struggle which exercised the
most profound effect in history on the
economic position of the world.
One of the notable facts in connec-
ton with it is that there has been a
radical alteration in the alignment of
high tariff advocates. For genera
tions the Republican party has stood
for high protective tariff, while the
Democrats have varied between out
right free trade and tariff for revenue
only.
The great strength of the Repub1i-
can protectionist5 always has reposed
in the northern states, where are
located the manufacturing industries.
These industries have supported the
Republicans because the Republicans
favored high protection.
Closely affiliated with the manufac-
turing interests have been the bank
ing interests of the country; in fact
manufacturing enterprises and banks
frequently are owned by the same
persons This has meant that the
banking power of the United States
has been in favor of high tariff duties.
A great change has come about
quietly in this regard as a result of
the astounding events of the war. The
people as a whole put up the money
to buy the liberty bonds and lend
money to our European allies but the
banks also were heavy investors. In
deed, the banks made it possible for
many of the people to buy. 1t will
be remembered how banks arranged
to sell bonds to the people during
the drives, on a monthly installmet
plan. The banks had to pay the gov
eminent within a shorter period, so
they were actually putting up much of
the money. Many purchasers did not
complete their installment purchases
and the banks found themselves COM
PEELED to take over the bonds. The
consequence was that the banks be-
came great holders of these securities.
Bonds Make Free Traders. =
Now more than S1,Oo0,OOo,O0o in
liberty loan money is in Europe and
EuNope is slow in making repayment.
Europe is poor and cannot pay US in
gold, as we already have so large
proportion of the worlds gold-about
half of it. There are three ways fer
nation to make payments; in gold,
in goods, or in services. Europe can
not pay in gold. She is paying in
in her ships and by entertaining
American tourists The bulk of the
payment must. be in goods.
To pay in goods European countries
must export to US all manner of COM
modities of the sort we require. Most
of these goods are of the sort made
in the United States.
A protective tariff is designed to
keep out foreign goods so that the
American made product will not be
competition. Foreign costs of pro-
duction are lower than American costs.
This applies chiefly to labor which is
the big item in manufacture of all
kinds. American wages are higher
than in any other country in the world.
The bankers realize that to get their
money back from Europe they must
let Europe bring in goods to sell here.
A high protective tariff would prevent
this. Therefore, for the first time
in history, the American banking
community has departed from its ira
tariff and has leaned toward low
rates.
Because of the close affinity be-
tween the banking and manufacturing
interests, the change has not been so
marked as otherwise would be the
and has had a profound effect on the
passage of the tariff bill.
Cause of Delay with Tariff Bill
This doubt on the part of the fl
nancial interests is responsible to a
large extent for the delay of a year
and a half in enacting the tariff re-
vision and it has had an effect in
keeping some of the rates lower than
old time proteetionist Republicans
would have put them.
A statement which shows how the
banks feel about the tariff is con-
tanned in a recent bulletin of the Ma
tional City Bank of New York, the
great financial institution which
stands at the head Of American banks.
Discussing the international situation
with special reference to Europes
need of selling her manufactures here
so that she can earn money with
which to buy American food, the bank
says:
''It seems altogether probable that
some means will be found for pur-
chasing it, altho the difficulties are
great and the pending unfinished
tariff legislation at Washington tends
to increase them"
This shows clearly how the banks
feel that the high protective tariff,
once pet scheme of theirs now is
regarded as a factor which increases
the difficulties of doing business.
In a word what the American
creditors of Europe say is: Europe
owes us billions which we are de-
handing. The only way to get the
money is to take European goods A
high protective tariff prevents those
goods from coming in and being sold
here. Therefore, by our own legisla-
lation, we prevent Europe from pay
ing US the money we want in the only
manner which she has of paying"
II is an impasse and is reminiscent
of the old system of the debtors
prison. In the old days when a man
could not pay his debts he was put
in Jail. In jail he had no means of
earning money and therefore could
not pay the debt and be released. /
America wants Europe to pay its debt
but a high protective tariff puts Eu-
rope in a debtors prison by removing
her one avenue of payment
Such a problem is a good example
of the difficulties which confront a
statesman for there is the other side
of the picture. If goods made in Eu-
rope with cheap labor come into the
TTnifad Yndar IOry fhay