, 1923-03-23
Disproving Theories

pARADoNICAL as it may seem, the fact is that
L the export trade of the United States increases
tariff has nothing Whatever to do with exports, for
the tariff is imposed only on imports. The consti-
tuition forbids a duty on exports.
Theoretically, a protective tariff would tend to
decrease our export trade. The Democratic party
has adopted that theory, which sounds plausible,
but ignores history. When the tariff measure was
under discussion, Democrats in congress and Dem
ocrats in editorial sanctums declared persistently
that the enactment of the law would decrease our
purchases from abroad and thereby decrease the
power of other nations to buy from us, with the
result that our export trade would be ruined.
Foreign trade records for every month since the
law went into effect disprove the theory.
Perhaps one explanation for this rather remark.
able phenomenon in foreign trade may be ex.
pressed by the old saying, "Them that has, gets"
All the world likes to deal with a prosperous
dealer. That is true of individuals and true of
international trade. People are. afraid to deal
with a private enterprise that is doing business
on such a small margin or such low competitive
prices that its stability is questioned. However
great the inducement that may be offered in the
way of high rates of interest on deposits, people
are afraid to do business with a bank that is
doubtful in its stability. 1t is human nature to
deal with the man who is making a success and
when IA nation is proceeding on an economic pol
icy that insures its economic prosperity, it in
eyitably increases its dealings with other nations.
Under n protective tariff policy the producers of
the United States are assured of their own home
market. Being assured of their local market they
are free to give their attention to the production of
goods and the forming of trade affiliations for
the development of foreign markets. The pros
American producer can send his salesman
abroad; he can establish agencies abroad; he can
ship his goods in advance of sale and hold them
abroad ready for prompt delivery when orders are
received; he can establish banking connections
abroad, advertise his wares, build up his good will,
and proceed with a degree of confidence that es-
tablishes confidence in those with whom he ex-
poets to trade. All these factors tend to enhance
our foreign sales at the same time that, theoretical
ly, we are checking our imports by the establish
ment of a higher rate of import duty. Thus far,
under the new tariff law We have not decreased our
imports although we have prevented competition
from abroad that would have been ruinous to our
own producers.
In the first year after the passage of tho Nc
Kinley bill, our exports of merchandise increased
from $Ss4,O0O,0OO to 81, O30,00O,0O0. In the first year
after the enactment of the Dingley bill, our exports
increased from 81, 050,0 900, 900 to 81 ,231, 900, 1000. In
the first year after the enactment of the Payne
Aldrich bill our exports increased Aom 81, 744,-
100000 to 5000, 100000. Our presela increased
exports under the Fordney law are what might
reasonably be expected by students of economic
history. They utterly confute the predictions made
by the opponents of the protective system and of
the law as passed. Those who were misled in the
last congressional campaign into voting against
candidates having tariff protection convictions
may now exercise their handsight since they failed
to exercise their foresight at the appropriate tire.