Evening star., 1939-03-26

The Na1 Reich, sharp world trader,
feels the weight of Uncle Sans "big
stick" next month, an experience which
Is not particularly new, but has proved
especially persuasive in the past.
The big stick is Is per cent counter
vailing duties against German exports
to the United States which go into effect
April % pursuant to ruling by the
Treasury Department based on finding
by the Attorney General that Germany
Is subsidizing her export trade.
Last November the Treasury submit
ted to the Attorney General the facts of
Germanys trading practices with the
United States with the inquiry whether
the methods described required applica-
ton of Section 303 of the Tariff Act of
1880, which provides for Offset duties on
imports from countries found to be sub
sidizing their foreign trade by export
bounties or grants.
The Attorney Generals reply week
ago was affirmative. The Treasury was
required on the basis of the facts pre-
sented to impose extra duties on Ger
man goods equivalent to the bounties
being paid by Germany. The Treasury
announcement followed.
Consequently after April % all German
goods which are found to be exported to
the United States with benefit of the ex-
port bounties which have prevailed in
recent months will be placed under Is
per cent duty above the regular tariff
duty.
The regular tariff on German goods is
already higher in many cases than on
those of any other nation. for Germany.
on the American blacklist since ter
mination of MISREPRESENTATION treat
ment between the two countries in 1884,
does not benefit from generalization of
tariff reductions under reciprocal trade
agreements, as do all other countries.
New Duties Kill Barter Trade.
The new duties kill the barter trade
Germany has built up with the United
States since 1886 by means of inland
marks, special kind of blocked account
created for American German trade.
This is not the first time German trade
has been placed under offset duties in
the American market because of bounties
in subsidizing exports.
The Attorney General on June 2, 1896,
rendered an opinion to the Treasury De-
partment holding that German currency
manipulations through the use of con-
trolled, frozen and block mark accounts
constituted payment of bounties, which
required application of Section 303 Of
the Tariff Act
The special duties were collected until
August IS, their withdrawal following
Germany's discontinuance Of the use Of
Ask marks In financing exports to Amer
lea. A German economic mission out
lined to the Treasury plan for resump-
ton of barter trade in December, 1896,
and 1t was approved in the belief that 1t
would not involve payment Of bounties.
Under the December, 1886, arrange
ment the German government was per-
mitted to utilize its special marks for
American trade, but both the sale Of
American goods and the purchase Of
German goods in Germany were to be in
an uncontrolled market at current fair
open-market prices for such goods
In consequence of this agreement Ger
many built up her barter with United
States Arms until approximately third
of its exports to this country were dis
posed of in that fashion.
Based on the inland mark a highly
detailed and ingenious system of barter
was erected, which, according to Amer
ican ofncials, levied tribute upon Amer
ican cotton and copper producers to pay
for subsidies which permit the German
exporter to undersell the American manu-
facturer in his home market.
Method Explained in Decision.
The method devised by Nazi econo-
mists for this purpose is explained in the
decision Of the Attorney General which
advised levying of the countervailing
duties.
An American importer wishes to pur-
chase q quantity of German fountain
pens. His first step is to get in touch
with German agent, who places the
request before the Reich exchange con-
troll office, which has dictatorial power
over foreign trade.
The export permit is issued only If the
fountain pens fall outside three cate
gories Of goods, in the export Of which
Germany is not interested:
~ Articles in which Germany has q
virtual international monopoly to such
extent that their export at current
high German prices requires no a.
Mstance.
ca Goods Of which there is shortage
In Germany.
(0 Goods composed Of foreign ma
terials to such q large extent that their
export Is Objectionable because Of the
drain on Germany's foreign balances re-
sulting from the purchase Of materials
for their manufacture.
The fountain pens not falling within
one Of these categories, the export
permit is issued and the American i'm
porter or his German agent purchase
at the world price 81 900 worth Of Amer
can goods which the Reich needs
cotton or copper in the vast majority Of
cases, although which Of these u to be