Evening star., 1938-02-14


two conflicting
theories as to 1850 ;
what should be @ z.SSss|a
our national pol $se 49,
Icy often are bur-
led in mass of ssss; =. -
figures from
which differing conclusions are drawn.
The contention of the high tariff
or isolationist school at present is
that because the physical volume of
world trade by the middle of 1887
had for rs countries gotten back to
the high peace-time levels of 1929
the state OF our own foreign trade
is so satisfactory that tariffs should
not be touched. Attention is drawn
by them to the fact that gold values
should not be yardstick of measure
ment. but the actual quantities of
goods passing each year to and from
our ports should be considered para
mount.
Using quantity as basis for COM
putation, it is agreed that our i'm
ports are slightly higher than 1929
already and our exports are about
"a per cent below the level of that
same year.
Hull Has Other Views.
The answer of the co-operationist
school Of thought. headed by Secre-
tary Cordell Hull, is that even though
one disregards the gold value Ct our
trade, which in 1887 was 81 per cent
below the 1929 level, the conditions
of world trade are far from salts
factory on a quantity basis, too.
The Secretarys main argument is
shat recovery in world trade has not
kept pace with the increase in world
production. In 1886. for example,
= world industrial production, excluding
Russia, was only 81 per cent below
the 1929 level, yet the quantity of
world trade in manufactures was still
24.5 below the level of 1929.
While world production in 1886
was at the same level as 1929, the
quantity Of world trade in raw mate
rias was as per cent below 1929
Foodstuffs showed an increase of 48
in world production, but the quantity
of world trade in foodstuffs remained
14.5 PEI cent below the 1929 level
The same trend was maintained in
1887, for which complete records are
not yet available, but it is shown
from the incomplete figures that the
greatest recovery in the quantity of
world trade has occurred in raw ma
terials. Manufactured goods in world
trade, on the other hand, showed the
greatest lag behind production. Food
stuffs. too, are not advancing in trade
quantities to keep pace with world
production.
Setback In World Prices.
Countries mainly dependent on the
export of raw materials have pros
pered. Recently, however. there has
been a setback in world prices which
1t is hoped may prove only temporary,
and if it does, these raw material pro-
ducing countries, in the view of the
reciprocity advocates, may be expected
to increase their purchases from in
dustrial countries so that our own
manufacturing industries should bene-
fit.
Comparisons with 1929 as a goal of
recovery, however, are considered fall
lacious by the sponsors of the Hull
policy, the principal contention now
being that since population and the
rate of output per worker have in
creased since 1929, it is necessary that
the total production and trade be
increased correspondingly in order to
avoid larger and larger unemployment.
Thus, for. instance, it is set forth
by the United States Bureau of Labor
Statistics that if there had been en-
ployed in the United States in 1886
the same proportion of the population
as in 1929 (using the 1886 rate of
output per worker) we would have had
in 1896 an increase of 20 per cent in
the combined production OF all manu-
featuring industries.
The enlargement of export markets |
for the United States is, therefore,
one means of stimulating domestic |
production and employment in the |
important export branches of industry |
and agriculture. Since the productive |
capacity Of those parts of agriculture
and industry which are on an export |
basis are not at present fully utilized,
san increase of exports is held by Sec
retary Hull to mean an increase in
domestic employment and incomes.
Policy Of Lower Tariffs.
To make possible such An increase
of exports it is the Governments
policy here to increase the purchasing
power of foreigners by reducing ex-
..cessive tariff duties that now limit
or shut out their buying. Increased
efficiency and lower prices within the
United States are, Of course, expected
to increase the purchasing power Of
our own people. These tariffs are
selected mostly from products that
are only remotely competitive with
domestic products. Hence, it is in
sisted that any reduction OF employ
ment or incomes which may result in
certain businesses in America from
the reduction of tariff duties is in
significant compared with the benefits
resulting to Nationwide employment
because of increased production at
home for export.
' Naturally those businesses "inci-
dentally" affected when trade as
whole u considered feel the pinch
acutely and are loudest In their pro-
tests. So they inevitably stir up the
apprehensions of others not affected
that their turn will come next. Mean
while readjustments and loss of In
come and employment are occurring
within our own borders because
Americas great productive powers
are not fully utilized for export. These
same companies which are "inci-
dentally" affected would make up at
,i1ome losses suffered by tariff reduc-
tions were it not for the fact that the
exchange OF goods within the United
States is impaired due to artificial