Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-09-17
EUROPEAN DEBT
NOT PAID WITH
A HIGH TARIFF
BY FREDERICK j. HAsKIN.

washington, ID. c. sept. IT,
The conferees of the senate and
house of representatives within a
short time will report to their
houses a 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 inter
est because it represents the first
great tariff revision since the Euro
pean war, a struggle which exer-
Cised the most profound effect in
history on the economic position
of the world.
One of the notable facts in con-
nectiOn with it Is that there has
been q radical alteration in the
alignment of high tariff advocates.
For generations, the republican
party has stood for a high protec-
tive tariff while the democrats
have varied between outright free
trade and tariff for revenue only.
The great strength Of the repub-
lican protectionists always has re-
posed in the northern states where
are located the manufacturing in
dustries. These industries have
supported the republicans because
the republicans favored high pro-
lection.
Closely affiliated with the manu-
featuring interests have been the
banking 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
I'D the money to buy the Liberty
bonds and lend money to our Euro
pean allies but the banks also were
heavy investors. Indeed, the banks
made it possible for many of the
people to buy. 1t will be remem-
bered how banks arranged to sell
bonds to the people during the
drives, on a monthly installment
plan. The banks had to pay the
government 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 compelled
to take over the bonds. The con-
sequence was that the banks be-
came great holders Of these Sc
curities.
Bonds Make Free Traders.
Now more than $1,000, 000,0 600
in Liberty loan money is in Europe
and Europe is slow in making re-
payment. Europe is poor and can
D. .~ 'l gold. as we already
have so large a proportion of the
worlds gold-about half of 1t.
There are three ways for a nation
to make payments; in gold, in
goods. or In services. Europe can
not pay in gold. She Is paying in
services by carrying American
cargoes in her ships and by en-
tertaining American tourists. The
bulk of the payment must be In
goods.
To pay in goods, European
countries must export to US all
manner Of commodities OF the
sort we require. Most OF these
goods IRE of the sort made in the
United States.
A protective tariff Is designed
TO keep out foreign goods so thai
the American made product will
not be met in it's home market by
foreign competition. Foreign costs
Of production 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 protec-
tive tariff would prevent this.
Therefore, for the first time in
history, the American banking
community has departed from its
traditional advocacy Of a high
protective tariff and has leaned
toward low rates.
Because Of the close affinity be-
tween the banking and manufac-
turing interests, the change has
not been so marked as otherwise
would be the case, but nevertheless
it is apparent and has had a pro-
found effect on the passage of
the tariff bill.
Cause of Delay With Tariff Bill.
This doubt on the part of the
financial interests is responsible to