Evening star., 1932-08-28
Economic Expert Believes
Tariffs Are Impediments
to World Commerce.
AMERICAN GOODS NEEDED
BY FOREIGN CONSUMERS
Establishment of Factories Abroad
by Many U. S. Manufacturers
Constitutes Problem, He Says.
BY DIR. MAX WINKLER.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. August 27-Despite the
pre-emipent place which the United
States Holds in the world of commerce
! there are still many Americans who,
even though actively engaged in it, con-
tinue mystified by the intricacies of
,, foreign trade.
Various bodies have been created for
the purpose of enlightening the public
regarding the true significance of for
eign commerce and the benefits accru-
ing therefrom to the nation engaged
in it. The myth that countries which
produce in excess Of their domestic
needs may continue to prosper despite
of foreign trade has been exploded and
the number Of those who adhere to this
view is very small indeed.
Among the agencies engaged in
furthering American commerce with
the rest Of the world, the National
Foreign Trade Council ranks promin-
ent. Its guiding genius is James E.
Farrell, late head of the United States
Steel Corporation. The work of this
organization is carried on by a group
Of men versed in international finance
and economics, headed by Gardner L.
Harding, associate and successor of the
late o. K. Davis, to whose indefatigable
work the reputation of the National
Foreign Trade Council is largely attrib-
utable.
Prosperous Rivals Needed.
Mr.. Harding's headquarters are at
the India House, located at Hanover
Square, in the heart of the commodities
exchanges of New York. The writer
approached Mr.. Harding, to whom for
eign commerce has become a second
nature, with view to securing clear
picture Of the present situation in
which the United States, nay the whole
world. finds itself in regard to trade.
IF We are to continue in interna-
tional trade in big way ourselves"
Mr.. Harding said, at is necessary that
our rivals be prosperous" adding that
few Americans realize that the great
nations of the world which are COM
peting with each other most vigorous
ly are at the same time carrying on
with each other more than half their
aggregate foreign trade. The chief
rivals of the United States in interna-
tional trade are England, Canada. Ger
many, Japan and France. And the ma
tions with whom we do more than SO
per cent Of our foreign trade-buying
and sellng-are England, Canada, Ger
many,-Japan and France"
If there are to be billion dollar mar
kets in 1912, and I believe there are"
Mr.. Harding continued. they are to be
found among the worlds friendly COM
petitors which are interdependent upon
one another.
These nations, as well as other ma
tions throughout the world, have erected
trade barriers, so that the aggregate of
oil hoe I,,,
than half since 1929. The first road
to prosperity is to clear away some of
those impediments to foreign trade.
Failure to do so betokens lack of CON-
fidence, lack of fortitude on the part
of the nations that set them up. Call
it 'distariffment' or call 1t what you will
we have got to make drastic clear
ance of some of these barriers before
the channels of trade are again fully
reopened. and the courage to carry on
world business in a generous spirit
comes back to U.S."
Trade Barriers"
els there anything wrong with Amer
ica's foreign trade policy?" Mr.. Harding
was asked
so far as the United States is con-
cerned," he replied I'VE must recog-
nize that some very radical changes
have taken place in the position of our
foreign trade. Trade barriers in all
parts Of the world have weeded out
many American exporters who simply
were engaged in the old-fashioned prac-
tice of sending abroad their surplus
products In these days, export sales
must be made definitely to markets.
They do not differ essentially from any
other kind of sales. What foreign
traders must teach the American public
in order to win their favoring spirit, Is
that there exists in Johannesburg, in
Shanghai, in Buenos Aires, genuine
honest-to-god markets for American
goods, which are every bit as reliable as
those in Oklahoma, Oregon and Florida.
I'VE must face the situation involved
in the export of American factories,
1,100 of which are in Canada alone.
We must distinguish between those fac
tories which have gone abroad because
a foreign manufacturing and distribut-
ing center offered superior facilities for
selling American goods, and those fac
tories which went abroad solely and ex-
clusively to escape from tariff barriers.
In some cases there IS mixture of the
two reasons, and it might properly be
said that necessity has shown us that
foreign manufacturing Is often neces-
sary.
BuL, essentially, Oui 1OlcA6A AuS-
tories still constitute q problem we have
not altogether solved" went on Mr..
Harding. Tariff rates everywhere will
not always be as prohibitive as they are
now and unless we develop saner rea-
sons for foreign manufacturing, that
phase of our exports will be temporary
rather than permanent. Another point
that foreign traders must revise their
opinions upon is that exporters in this
country must steadily cooperate with
importers in providing new markets in
the United States for foreign goods
that are not now imported. This re-
fers, of course, to goods which DO not
unduly raise the question Of competi-
tion here. but contribute, as practically
10 per cent Of our imports really do to
better processes and more suitable ma
terials in American manufacturing.
Negative Trade Balance.
This country can afford for some
years to come a negative trade balance.
Economists know that an import bal
ance is usually, in large manufac-
turing country like our own, a precursor
of prosperity. When manufacturers
buy more abroad, it is obviously with
home. Therefore, there need be no
alarm over this process and foreign
traders should set themselves to still
any signs of disquiet arising In the
always sensitive political mind as
necessary imports increase and null
tiply.
FINALLY, exports continue to be
about 10 per cent, even In the de-
pressed state Of our national economic
life as whole, Of the total OF our pres
ent manufacturing output. They have
49, q