Evening star., 1936-03-03

these fallacies, experts declare, is the
fact that, for years prior to the World
War, as q growing debtor nation, the
United States was forced to export
more than 1t imported to meet its
foreign obligations-a situation con.
ducive to effective operation of pro-
tective tariffs.
Tariff Policy Not Shifted.
With the war. the picture sharply
shifted-but the Nation did not shift
its tariff policy to meet the change.
An uncannily accurate forecast was
made by President Wilson just after
the close of the war, December :.
1919. in a message to Congress. He
said:
Anything which would tend to pre-
vent foreign countries from settling
for our exports by shipments Of goods
into this country could only have the
effect Of preventing them from paying
for our exports and therefore of pre-
venting the exports from being made.
The productivity of the country,
greatly stimulated by the war, must
find an outlet by exports to foreign
countries, and any measure taken to
prevent imports will inevitably curtail
exports, force curtailment of produc-
ton, load the banking machinery of
the country with credits to carry un-
sold products and produce industrial
stagnation and unemployment.
If we want to sell we must be
prepared to buy Whatever, there
fore, may have been our ciews during
the period of growth of American
business concerning tariff legislation,
we must now adjust our own eco
nomic life to changed condition
growing out Of the fact that American
business is full grown and that Amer
lea is the greatest capitalist in the
world"
And what was the result when Con-
gress, instead of following Wilson's
advice, kept building our tariff walls
and shutting out imports? Let's have
the opinion, as expressed to q Senate
committee recently, of Russell c.
Lefngwell, partner and trade au-
thority of ]. P. Morgan g. Co.
Wilson's Principles Violated.
Said Mr.. Lef1ingwell:
Il think the determined efforts of
the United States to maintain the
position the war gave her as a net
exporter both of agricultural products
and of manufactured goods and a
net creditor on capital account, too,
was a major factor in bringing about
the def1ation and the depression. After
the war was over, however, the Ford
ney- -McCumber tariff in 1922 and the
Hawley-Smoot act in 1880, adopted
after the depression had started. both
violated the principles laid down by
President Wilson in his message and
did much to aggravate the disequilib-
rum in the world economy and re-
taliatory tariffs throughout the world
made trade more difficult.
LAS the depression grew. nations
tried each to protect its money, its
wage level and its price level by the
erection of more and more trade bar
riers. Tariffs weren't enough and
embargoes and quotas were added.
Exchange controls were established.
That was not enough and exchange
clearings were added. Trilateral and
multi-lateral trade was restricted in
some cases and bilateral trade only
permitted.
"All these things aggravated and
weakened the foreign exchanges they
were meant to strengthen. The defla-
ton impaired international credit and
the resulting defaults and restrictive
legislation closed the capital markets.
That is, every tendency is to reduce
trade to state of barter.
What is the remedy? Why, to undo
these things that have been done, to
lower tariffs and remove embargoes
and quotas; to let prices and produc-
ton readjust themselves; to stabilize
the exchanges at points Of natural,
not artificial, equilibrium. and to re-
open the capital markets"
(Copyright. 1896. by the North American
Newspaper Alliance. Inc.)