Evening star., 1938-11-27
Hull Trade Treaties
Declared Inadequate
BIZ OUen L. Scott

That policy has the f1rm packing OF
| President Roosevelt All who have tried
to cross the Secretary and to upset his
policy have lost their oficial heads.
Yet today, at the moment Of the great
est success for the program that he has
fathered, the Secretary Of State finds
that the very ofacials who have stood by
him most steadfastly now are convinced
that his policy holds out more hope than
| it does actual promise Of success.
Mr.. Hull set out almost ingle-handed
| four years ago to try to reverse the world
trend toward natienalism. He did this
by inducing Congress to permit the Sec
| retary of State to negotiate agreements
with other nations calling for reduc-
ton OF tariffs in order to permit freer
| flow of world trade. These agreements
were refused to nations that persisted in
a controlled export trade, utilizing barter
and import quotas and exchange clearing
arrangements. 1t is on the Hull policy
more than on any other single policy
that the totalitarian nations and the
democracies divide.
The Hull policy OF reciprocal trade
agreements now is capped by new
agreement with Great Britain and by a
renewal of the agreement with Canada
that first took effect in 1886.
Scarcely note of criticism came from
any disinterested quarter when the Brit
ish agreement was signed. The volume
of praise was unprecedented for any New
Deal achievement. Nobody questions the
sentimental value or the objective of the
agreement that will 60 into effect Janu-
ary l. But 1t is discovered that critical
analysis Of the effect of this agreement,
made by officials who had part in its
conclusion, does not hold the promise
that many seem to expect.
The British agreement was designed in
important part to reopen the markets Of
the British Isles to larger volume of
surplus American farm products. In ex-
change for larger opportunities for farm
products in the British market, the
United States agreed to let down its
tariff bars bit to allow more imports of
British manufactures.
1t is when the character of these con-
cessions is analyzed that Official opinion
cools.
The analysis made by the Department
of State shows that the British are CIV
ing some tariff reductions on American
products that sold in the British Isles in
an amount Of $50 000O, 900 during the year
1896. OF this amount s26,000000 were
farm products, principally wheat. This
country, in turn, will give tariff reduce
tions on British products that sold in
this country during 1886 in an amount
of $50, 900 900. Textiles and metal prod
ucts made up an important part of this
total.
When 1t is considered that total ex-
ports OF this country during 1896 amount
ed to 1886 100000 and total imports
amounted to 26e80oo0 900, there is pro-
vided clear evidence Of the direct i'm
portance of the agreement.
In addition. OF negative and indirect
Importance is the fact that both the
British and Americans agreed not to in
crease present tariffs or to impose new
tariffs on a number Of products, includ-
ing cotton.
But even the rather thinly sliced tariff
adjustments are subject to the effect of
other trade influences that can narrow
even further their real importance.
The reason? Simply because two fac
tors are of vital importance in foreign
trade. One of those factors is the use
of tariffs. This factor is dealt with in
the present agreement. The other factor
is that of currency. Right at the moment
the British pound sterling is weak in
relation to the dollar This means that a
British importer, looking for goods, finds
1t more difficult to buy American goods
than to buy goods from nation whose
currency is tied to the pound. At the
same time, the cheaper pound means
that an American merchant will find 1t
easier to buy British goods, because his
dollar will go farther.
The British, by cheapening their
pound, already have been gaining trade
advantage over this country. Now tariff
adjustments will accentuate that advan-
tage. The French, with whom we already
have reciprocal trade agreement, have,
like the British, permitted their currency
to decline in relation to the dollar.
Currency is being used at the moment
in a way that can narrow the effect of
the new British-American trade agree
ment. It remains to be seen how far
this currency readjustment is permitted
to go without nullifying the agreement
ITSELF
Again. great store is being placed by
the State Department in the agreement
by Great Britain to remove the Scent
preferential tariff that now favors wheat
imports from Canada and Australia at
the expense of American farmers. This
part of the agreement Is stressed as a
reason for giving tariff adjustments on
British products in this market.
Analysis shows, however, that any inn
portant result from this agreement on
the part Of Great Britain is hardly to be
expected. Reasons are two. One Is that
American wheat, even at present low
prices, still is selling IS to 20 cents higher
than other wheat available to British
buyers. A second reason is that this
country and other countries as well are
dumping wheat. Taxpayers are bearing
the cost Of government subsidies used to
make wheat cheaper for foreigners than
for domestic conslIners I'm tn date fnr.