Evening star., 1927-09-18

duties on imports from
wv America two weeks ago, she
fired the first shot in a
trade war which has al
ready brought emissaries scurryinS
forward from both camps with pro-
posals for truce, If not permanent
reace. The shot may signal only a
skirmish which will not develop into
a war But the fact remains that the
shot has been fired. 1t was not a
chance shot, the result of somebody s
gerrinc careless with the lanyard. 1t
was a premeditated shot. well aimed,
and those who fired it did so with the
belief that there was enough am
.munitiou in reserve to follow it up, II
need be. with more.
The first shell exploded in the ranks
of an army that has a Big Bertha"
all its own. Interest in the question
is whether the diplomatic exchanges
now going forward between the two
countries will end peacefully, or
whether this Big Bertha" now COW
cred with gun grease and stored
away. is TO be brought out for the
first time and trained on the enemy.
Big Bertha" is section 317 of the
tariff act. which enables the President
TO execute reprsals where there is
justification. If fired it would make
tremendous racket and kick up no
end of dust.
Widely Divergent Views.
The greatest difficulty toward
peaceful adjustment of the business
is that the trade rupture has occurred
sDetween two nations which, however
friendly they might be, hold widely
divergent views on the fundamental
theories of the tariff as a policy
France has always regarded the tariff
as an instrument which can best be
used to make a bargain with the
other fellow. The United States has
regarded the tariff, philosophically at
least. as n means of protecting domes-
tic industry, plus the belief that those
who use luXuries must pay for them,
and has fixed the rate Of duty on the
strength of what the protected in
dustries need, and not on what the
other fellow can give in return.
France wants the United States to
lower these duties, as they apply to
French exports, and in return is WILL
ing to talk business about scaling
down the maximum, or marked up"
duties on American exports. Mini
mum rates in the United States are
fixed by statute and apply equally to
all. They cannot be lowered in favor
of France. But they can be raised
against France. So, in return for a
guarantee that these minimum rates
pwill not be raised, the United States
wants France to agree to apply the
same rates to American exports as
she applies to German, English or
Belgian exports
The principle of high or low tariff
is not concerned in the present situa-
ton. American exporters would have
no basis for complaint if France fixed
a high rate of tariff applying to every
body. Trade can adjust itself to a
high duty, but not to unfair competi-
ton. A nation is at liberty to fix as
high duty as she pleases on imports.
land America would be the last Nation
In the world to complain against a
high tariff. The complaint in this
case is that America has been dis.
eliminated against and virtually shut
out of market which, at the same
time, is left open to competitor ma
tons. France has fixed rates, on the
. same commodities, four times higher
for American-made products than for
those made in Germany, England and
other countries of a favored status.
The result is to exclude these Ameri-
can goods from the French market.
Trade War Possibility.
Comments by critics of the Amer
lean tariff policy, therefore, who take
the view that in the present case the
United States has got taste of her
own medicine, are out of place. The
right Of a nation to fix a high rate of
duty is not questioned America has
preached and practiced that doctrine.
But the right of a nation deliberately
to discriminate against a friendly
power in the hope of getting some
thing from that friendly power by
agreeing to cease the discrimination
under conditions, while it may not be
a subject for debate. is at least con-
ducive of strong protest from the
nation which is a victim of the
discrimination.
The present incident, already lead
Ing to dire conjecture regarding the
possibility Of a long -drawn-out trade
. war between the United States and
France, was not born overnight.
There is a long and involved story
behind it. For five years after the
signing of the Versailles treaty,
France enjoyed in her relations with
Germany the privileges of a victor,
and was able virtually to dictate her
own trade terms. But the expiration
of the five-year period saw Germany
in position to do little bargaining
Z herself. Forced to the step, France
negotiated a commercial treaty with
Germany which required two and one
half years of hard work to complete.
Under this treaty France gave Ger
many minimum rates on some prod
ucts and fixed rates on others, accord
ing to what Germany would grant in
return. The treaty was a bargaining
process, pure and simple.
German-American Agreement.
Germany, in the meantime, conclud
ed a commercial treaty with the
United States, containing the most
favored nation" clause, which means
that the German duty on imports from
the United States will be fixed at the
minimum rate of duty for the com
modties concerned, and that the
United States guarantees that German
products will be admitted to this
country under minimum rates.
But while there has been talk of 1t,
France and the United States have
never found the time opportune for
concluding a commercial treaty be-
tween themselves. For some time
France has been planning to revise
her whole tariff structure. Revisions
have been made necessary because of
her depreciated currency and other
nost-war economic factors. But she
has never accomplished the entire
revision. A bill for revising her tariff
rates failed of action in the last ses'
sion of Parliament. Meanwhile, how
ever, the rates on those commodities
involved in her treaty with Germany,
and some others, amounting in all to
400 items. were revised, and the re
...r;o, wa G mostly inward The result
ia that while Germany received sub
etantially most st-favored.nation treat
ment and on most of her products
-. ,An,.S mi irnrt,n dllfies the rates