Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-12
AMERICAN TARIFF
UNION IS FAVORED
Chilean Foreign Minister'S
. Proposal May Result in
! Congressional Action.
BY JOHN F. SINCLAIR.

NEW YORK, June l2-Should the
United States follow the lead of Ger
many and Austria and form her own
customs union with the Latin Amer1-
can republics? Senior Antonio Planet,
Chilean foreign minister, thinks SO, and
q number of American Congressman
will probably look with favor on the
suggestion.
There is a general disposition among
all Americans to sympathize with the
desire of South American statesmen Tor
better export markets. but many con-
tend that this can be brought ABOUT
mast easily by lowering tariff rates.
This splendid South American mar
ket. where the United States made such
spectacular strides during and after the
war. is somewhat antagoniStlc now. Inc
determined efforts of Great Britain ana
Canada to get a foothold there VIII
make the Pan-American tariff union a
lively subject for the next Congress to
tackle.
Trade Display Planned.
Sometimes it looks as though Canada
is more alive to her strategic geo.
graphical location with respect to world
trade than is the much more favor
ably situated United States. Thus, dur
ing the past year, Canadian business
leaders have actively considered plans
for getting larger share OF trade III
the Orient, South America and the
Caribbean,
Groundwork is being prepared for a
little worlds fair in Vancouver, British
Columbia, in the near future. Shipping
facilities to the Far East from Can
ada's western seaboard will be empha-
sized The possibilities of exchange OF
the DOminion'S wheat and timber prod
ucts for the products of China, Japan
and other Aslatic countries will be eX-
plotted in numerous exhibits.
During the past Winter group OF
Canadian business men toured these
oriental nations, drumming up inter-
est in Canadian trade.
The latest Canadian move concerns
the Caribbean area. 1t Is proposed to
arrange a series of mutual preference
trade treaties, especially with the Brit
ish West Indies. This would resemble
somewhat the American reciprocity
agreement with Cuba. A special Cana
da-West Indies conference will be held
in Ottawa this Summer to consider
these subjects.
The well planned competition of Eu-
rope and Canada should force the
United States to take similar steps, II
American export leaders expect to hold
their present business with foreign ma
tons.
Proposed Rate Increase.
When the big Eastern railroads de-
manded recently an increase in freight
rates. a cry went up that such action
would not solve the problem OF the
falling off in railroad revenues. and 1t
would probably force more freight haul
age by auto truck than ever.
Now the National Retail Dry Goods
Association says that such an increase
would not go to the heart of the trou-
bic at all, that it is unsound and that
it would bring greater confusion.
The clement of transportation cost,
the dry goods group contends, ''enters
into the cost of production, usually from
three to seven times in the progress
from producer to consumer. Any in
crease in freight rates will, therefore
reflect many times it's initial increase
in the ultimate cost of goods 10 the
people of the United States"
Until the interstate auto bus trans
po-tation is put under the supervision
of the Interstate Commerce Commits
sion, it is doubtful if any increase in
railroad freight rates would be of i'm
mediate effect.
Rediscount Rate Reduction.
For the third time in its history and
the first time since 1909, the Bank 81
England his reduced its rediscount rate
10 2la per cent. The lower rate was
considered inevitable in financial cir
Giles since the drastic reductions in bill
rites and rediscount by the United
Sites Federal Reserve.
During the period of intensive spec.
ulation in the New York stock market
in 1929, the Bank of England jackec
the rcii2count rate up to as high a!
6ia per cent to stem the flow of British
funds into that whirlpool of specu.a.
ton. Conversely, the lowering OF the
New York rate diverted money from
the United States to London for more
profitable returns.
If there is anything the past two
years OF money history should serve
to bring home to the world, it is tha
the monetary system of the world re-
wolves on the Federal Reserve pivot
Backed at present with 40 per cent Of
more of the earth'S gold, this maxim
gains added emphasis.
Chicago Bank ClOsings.
In the last 10 days % banks in the
outlying sections Of Chicago, with de
posits approximating $50 100000, have
been closed. The closing of these
banks was largely precipitated by thu
First National Bank taking over thu
Foreman State Bank, g 5000, 100000
institution, on last Monday morning
This, in turn was followed by {
merger of the National Bank of tn;
Republic and the Central Trust Co.
forming S35o,000 900 institution.
The outlying banks which closed hae
much real estate paper. Chicago rea
estate has dropped in value 50 rapid!
since the 1929 crash that many o.
these banks found their assets had de
preciated to a point where their capita
and surplus were either wiped out o.
badly impaired. Tire are about 20t
such banks in tie outlying sections o.
the city. Some Of them have KEEP
their assets in liquid condition, bu
others we're no. so fortunate.
The absorption CT the Foreman State
Bank by the First National means the
passing of the Foreman family from
the banking picture of Chicago. Mem
bers of this family have been leader!
in banking here for half century. Tbs
business was founded by the grand
father of the present generation, snc
wps widely expanded By his son. Thu
Fcremans of today were reckoned chi!
a few years ago among the richest mer
of Chicago.
THE banking situation in Chicago j
being cleared up very satisfactorily.
Melvin A. Taylor, president of the FRS
National Bank. said today. We arr
prepared to back up to the very limi
any correspondent bank of ours which
is in good shape and which needs ou
assistance. I am sure that every othe
depository bank in downtown Chicag'
has agreed to do the same thing for 1t
correspondent banks.
"Where a banks assets are so frozel
that there is no hope of it being able t.
come through. it is far better that 1t
officers close it in order to conserve TO
the stockholders what may be left.
feel that the banking 81 uation-whil
extremely distressin9-is being handled
as efficiently as possible"