Evening star., 1939-12-17
Hull Hits Cost Basis
OF Tariff in Letter
To Vandenberg
Adoption Of Policy
Would be Tragic
For Future He Says

eS'Ss sHS S0yS
Secretary of State Hull last night
assailed as wholly unsound and i'm
practicable" a proposal by Senator
Vandenberg, Republican, OF Michi-
gan, for adjustment of United
States tariffs on a basis Of the diff
ference in cost Of production at
home and abroad.
Experience has demonstrated the
failure OF the type of tariff adjust
ment which you are advocating"
Mr.. Hull said in letter to the G.
Q. P. presidential aspirant, adding
that "if experience counts for any
thing at all, it surely shows that
such q course would be tragic one
for the future of this Nation"
The Secretary asserted that the
existing reciprocal trade program
provides the best method for keep
ing away from the "old log-rolling
process" and scientifically adjusting
tariffs in order to increase foreign
markets for American farm and fac
tory products.
Mr.. Hull's letter, replying to one
from Senator Vandenberg last
month, carried forward a heated
battle Of words over the admins
tration's reciprocal trade policy,
which Is shaping up as one of the
major issues facing the session of
Congress convening January 3.
To Ask for Extension.
President Roosevelt has served
notice he will ask for prompt ex-
tension OF the authority to nego-
tlate trade agreements, which is due
to expire June II unless renewed
by Congress. Opponents of the pol
icy claim enough votes to defeat its
renewal.
Secretary Hull assured Senator
Vandenberg that his protests against
possible reduction of the duty on
beans and copper in pending trade
negotiations with Chile would be
carefully considered by the practical
experts of the various Government
departments collaborating in nego-
tiation of the proposed treaty.
Noting that it would be improper
Tor him to anticipate results of that
study Mr.. Hull said
Il do desire, however, to comment
upon that part of your letter in
which you state, in substance, that
you do not wish to return to the
old log-rolling tariff process in Con-
gress, but instead would like to
have all tariffs adjusted admins
tratlvely, under general formula
laid down by Congress, so as to
equal the difference in cost Of pro-
duction at home and abroad"
The Secretary said the suggested
method was the same as was in
effect from 1922 to 1884, climaxing
IN the 1880 Hawley- -Smoot "embar-
go tariff which he described as
the most ill-timed and costly piece
OF tariff legislation in the entire
history of this Nation"
Followed by Depression.
He noted that the Hawley -Smoot
Act, log rolled through Congress
by "combina ton of pressure
groups" Incorporated substantially
the same cost formula for adjust
ments and was soon discredited by
the rapid descent of the entire
country into the worst depression in
the Nations history"
The history of what happend in
the 1922-1935 period shows conclu-
slvely, Mr.. Hull asserted, that such
cost formula as the exclusive
basis for tariff adjustment SIS wholly
unsound and impracticable
He pointed out as practical OBJ
lection that full cost data seldom
could be obtained and were confus.
Ing anyway because of wide varia-
ton of costs among different pro-
ducers. There is no such thing as
the COST" he added.
However, Mr.. Hull said that when.
ever practicable cost of production
data are taken into consideration
along with all other factors in ad.
tustment of tariff rates under the
reciprocal trade program.
Must Solve Real Needs.
If we are to get away from the
old log-rolling process of tariff
making to which you say you are
opposed" the Secretary's letter con.
tinued, I'VE should adopt a system
that solves the real needs of oul
Nation. We cannot do that by
adopting a formula which is neither
sound in principal nor capable o.
scientific administration.
What the interests of this Ma.
ton demand, under existing abnor.
NAL conditions, is an emergency
method of adjusting our tariff struc.
ture with a view to obtaining
through reciprocal reduction O
trade barriers in foreign countries
better market outlets for our grea
exportable surpluses of farm ane
factory products
This means that we must have ,
method by which we can adjus
our tariff rates below the embarg,
levels of the Hawley- -Smoot Act
while at the same time exercisin,
the utmost care to make sure tina
the branches of production immedi
ately concerned, in agriculture an,
in industry, are amply safeguardeo
"The existing law-the Trad
Agreements Act-provides the bes
method Of attaining precisely thes
objectives, and has successfully stoo
the test of practical application il
the % agreements already negoti
ated.
"To abandon the trade-agreemen
method in the present emergenc
and to adopt your formula woule
in effect. be return, under tn
guise of scientific tariff adjustment
to Hawley-Smoot embargoes, or thei
equivalent. If experience counts fo
- 1 - 1