Evening star., 1932-01-03
TARIFFS STIR FEAR
FOR WORLD TRADE
Complete Paralysis Expected
i Unless Nations Shift
Present Policies.
BY PAUL SCOTT MowRER.

and thought of all peoples, Is now in
full swing.
After nearly a century Of ceaseless
international trade and financial devel-
opment all the nations under the infiu-
ence of the world crisis are suddenly
isolating themselves. international
credit is already virtually paralyZed.
Now it is international trade which is
sinking toward the vanishing point.
DisagreeiEg regarding both the causes
and the cure of the depression and un-
able, therefore, to reach harmonious
international understandings on con-
structive measures which ought to be
taken in the general interest, each
country has begun to barricade itself
economically and to aim at self
sulticiency.
Crisis Made Worse. --.-.-.r
Not a day passes without news from
one country or another of new tariff
increases, foreign exchange restrictions,
embargoes on gold, or prohibitions or
allotments of imports. Whatever the
ultimate results may be, the immediate
results, all economists seem to agree,
are merely to make the crisis worse.
In order to maintain national sta
blity" says the current number of
World Trade, organ of the Interna-
tional Chamber of Commerce, the ma
tions are adopting methods which ST.
multaneously destroy the vital mechan-
ism of international exchange"
This mechanism, the same authority
continues, is in imminent danger of a
breakdown, owing to 'the sudden crea-
tion of new tariffs, the imposition of
import quotas, the introduction of sys-
TENS of contingentS, and the reStric-
tion or prohibition of foreign exchange
movements on the chief bill mar.
kets OF the world, activity is slowing
down to an alarming extent. If the
machinery of international exchange
comes to a stop it means all move
mentS of goods across frontiers and
oceans will come to stop"
Each nation" writes the French
economist, Gael Fain, is turning in on
itself and waiting passively for the end
of the crisis, to which this inturning
daily adds new difficulties.
Complete Stoppage Feared.
I'VE are heading straight toward an
almost total cessation of foreign sales"
warns r. P. Duchemin, head of the
general federation of French producers.
Whereas the progress of civilization
hitherto" declares Julien Durand. chair
man of the Commerce Commission of
the French Chamber of Deputies, has
coincided with the development of in
ternational economic relations, we are
now witnessing a sort of repression
toward the idea of Self-contained states
with closed frontiers, through whose
narrow, wellguarded doors they let
pass only allotments of goods indispens-
able to the populations need"
M -
ment accuses its neighbor of having
started the movement. In reality there
is a general instructive movement to try
to escape danger. All fear that national
production will be submerged by for
eign competition. All fear some more
or less ingenious system of dumping
which will somehow leap over even the
highest tariffs. And as world procuc-
ton has been stimulated in this order
ly manner without regard to the pos
sibility of markets to consume, all are
shutting themselves in TO let the storm
pass"
Business Slows Down.
The result, according to M Durand,
threatens to be a general slowing down
of each countrys economic life for
long period unless remedies are soon
sought and found.
The same story is told ironically by
the French humorous commentator,
Maurice Prax, who exclaims:
"At last the governments have dis
covered the solution of the formidable
and perilous problems which for months
have been overwhelming and exhaust
ing the world: Padlocks."
Virtually all the frontiers, Mr.. Prax
explains, are now being neatly and
completely padlocked.
The confusion of thought which led
to the adoption of isolationist instead
of international solutions is well de-
scribed ny M. Fain. This confusion, he
says, results from opposition of those
who want freer movement of goods,
money and men to those who want in
tense isolation;
OF those who want to base the new
economic equilibrium on def1ation to
those who want to get back to the levels
existing before the crisis;
Views Conflict Sharply.
OF those who want to remove all
trammels on production to those who
believe in voluntary limitation by car
tells and agreements;
OF those who want TO maintain high
wages in order to increase purchasing
power to those who think that high
wages cause unemployment and gen.
eral impoverishment;
OF those who want taxes lowered to
those who want governments to finance
big public works;
OF those who want the gold standard
20 those who want what they call an
elastic currency; and
or those who want to restrict credit
10 those who want to expand 1t by the
n
silver.
Generally speaking, European econ
omists attribute the credit paralysis to
business, political and monetary fears,
and the foreign trade paralysis to tariffs
end other import restrictions, currency
troubles and fears of dumping.
Suggests Definite Steps.
One Of the few Europeans who has
had the courage to propose definite and
immediate steps is M. Fain His thesis
Is that big general solutions would be
efficacious and lasting, but that they
are utterly impracticable in the present
state Of public opinion in all. countries.
He suggests, therefore, the following
relatively simple measures:
/. Consolidation Of short-term into
long-term credits.
2. Progressive liquidation Of frozen
credits, together with measures mean
while to help creditors maintain their
own liquidity.
3. Abolition of the gold exchange
standard, whereby the paper money of
one country was used as basis for
issuing paper money in another country.
f. Restoration Of a strict gold stand
ard in all the PRINCIPAL countries.
S. improvement of the international
clearing system.
6. All the foregoing measures are to
be taken without any new imitation OF
credit, either with or without security
Urges Loans on New Basis.
7. After confidence has been restored
and the international exchange system
improved new loans shall be made on
a new basis with much soldier guar
antees.
1t should be added that some OBJ