Evening star., 1940-03-17
State Barriers to Trade Invite
Federal Government Control
Depression Gave Impetus to Retaliation and
Tax Laws That Threaten to Strangle
Interstate Commerce
Bv Herbert M. Braffer.

use Of an article purchased outside the
State. Use taxes had their origin in
States enforcing local sales taxes and de-
string to prevent their residents from
buying goods outside the State.
Various State laws require that, in the
letting Of State contracts, home products
like coal and stone be stipulated. In
one State home -made butter only may
be used in State institutions. Another
State requires school text books to be
printed within the State. To stimulate
manufacturing at home. Maine prohibits
electric power to be sent out Of the
State. Most States have some form Of
preference law.
Buy-at- Home Crane.
Keeping in mind the Inevitable tend
ency of people to retaliate when their
neighbors discriminate against their
products and trade, it is obvious, carrying
the trend to its logical conclusion, that
in the end interstate trade will be lin
tied to those commodities which have
to be bought outside the State. When
the buy at home" craze prevents the
lowest cost producer from selling his
goods as cheaply as possible it is the
ultimate consumer who must pay. His
goods will cost him dearer. That is the
only result.
No nation has squawked as loudly as
our own at the barriers which foreign
countries have raised against imports.
Yet here at home there has been a wide
movement to do the very thing we find
so Objectionable abroad. This interstate
hostility is the Hull trade program in
reverse, as illustrated by CALIFORNIA; s
threat to boycott Michigan-made cars
because of Michigan's tax on California
wines.
The intolerable results of permitting
this trend to continue have long been
apparent. The affected business in
terests, economists, Government officials
and others have raised their voices in
protest, although the general public has
yet to be heard from. Among Federal
Government officials who have called
attention to the interstate barriers prob
lem are Attorney General jackson, Sec
retary Hopkins, Secretary Hull and the
President himself.
Council Checks Spread.
Outside the Federal Government, the
Council of State Governments has been
doing excellent work in educating the
Nation to the necessity of taking down
the barbed-wire legislative entangle-
ments which the States have been
stretching across the highways of trade.
The work of the council has tended to
check the spread of trade barriers. Re-
gional meetings Of officials Of States espe-
cially interested have been promoted and
Legislatures in some cases have been
persuaded to remove some of the OBJ
jectionable laws.
Thus, between the Federal Govern
ment and outside agencies, the problem
Is now receiving careful attention. A
vast amount of work still needs to be
done, however. and the question, is, who
is to do 1t? The issue posed by the
problem Of interstate economic warfare
is one Of sef-government VS.. centraliza-
ton.
If we are to rely chiefly on the Fed
eral Government for q solution, expanded
Federal authority over business is indi-
Gated. The States will then be forced
to look to Washington for guidance in
matters of State taxation and policing
powers.
The alternative is local solution of the
problem by the States themselves.
One way lies In bi-State compacts,
each State entering into an understand
ing with its neighbors individually that
discriminatory State laws and regula-
tions will not be enacted.
Another approach to a local solution
consists of model laws drafted by dis
interested committees and adopted by
the States comparatively.
If no local solution is adopted, we
may expect pressure to increase for a
Federal solution. In the words of the
present Attorney General, "The Federal
Authority must and will uphold the con-
stitutional mandate that commerce
among these United States be free" As
a last resort, advocates of such a solu-
ton could foster constitutional amend
ment designed to give Washington un-
equivocal authority.