Evening star., 1947-03-23

Deen Tie pOilcy OF The IOVeTluHenb
Trade Agreements Act in 1884, the
tural interests, especially in tho
South, which wished to sell their
surpluses in the world market and
buy their manufactured goods as
cheaply as possible, no matter whers
produced. That meant that this
opposition favored free trade or, at
most, a tariff for revenue only.
The War of 1872, which shut out
foreign imports for years because
of the British naval blockade, gave
a powerful stimulus to the growth
of American industry and created
protectionist interests strong enough
to raise tariff schedules. This so
infuriated the Southern free traders
that South Carolina raised the issue
of States rights" in 1882 and
threatened to nullify the Federal
tariff within its borders. This pre-
view of secession, later to be fought
out in the Civil War, was concluded
by the resolution of President An
drew Jackson that the Union must
be preserved. But from then on
until 1861, Southern influence was
strong enough to lower tariffs and
thereby encourage foreign manu-
factured imports.
The destruction of the Southern
planter aristocracy in the Civil
War, combined with the tremendous
extension of industry in the North
during the war itself, marked the
triumph of proteetionism as q ma
tional policy, embodied in high
tariffs, which was not seriously
challenged until the long period Of
Republican rule was broken by
Grover Cleveland's first administra-
ton in 1887. The tariff was burn
ing issue between the two parties
until the Democratic split over free
silver in 1896 again insured period
of Republican ascendancy which en-
dured until the Democrats under
Woodrow Wilson came to power in
1912. During that long Republican
rule, America was further indus
trialized under high tariff protec-
ton. Again there was Democratic
reduction of tariff schedules, to be
followed by higher tariffs once more
when the Republicans returned to
Office in 1921 and stayed in until the
1888 advent of Franklin D.
Roosevelt.
From Creditor to Debtor Nation.
Meanwhile, the whole issue OF
tariffs and foreign trade, had been
altered and complicated by the re-
suits of World War l.. Down to
1914, America had been what the
economists call debtor nation"
Its rapidly expanding economy had
been made possible largely through
great volume Of foreign invest
ment which was repaid through ex-
ports, mostly agricultural surpluses
and other raw materials. The pro-
ducts of its growing protected in
dustry were consumed mostly in the
home market.
But even before World War I, our
maturing industry was exporting
enough of its products tc make
foreign trade an important factor
in many lines. This trend was
sharply accentuated when America
emerged, not only further indus
trialized but also a creditor nation"
That logically implied that the basic
character of our foreign trade had
altered.
No longer was it simple matter
Of export surpluses (mostly agri-
culturaD to pay for foreign invested
capital. Henceforth, we must take
far more imports if our exporters,
agricultural and industrial alike,
were to hold and win foreign
markets; because only, through in
creased imports into America could
foreigners pay, in the long run, for
the things they bought from us.
A Great Psychological Factor.
Unfortunately, American public
opinion retained its older debtor.
nation" consciousness; so there was
little effective opposition to the
highly protected industries which
feared foreign competition and
which were so well organized in
Congress that tariff reductions were
next to impossible. This psychologi-
cal lag accounts in large part for the
foreign debt populations, unsound
foreign investments, and foreign
trade shrinkages which eliminated
in the great depression which over
whelmed America between 1925
and 1882.
Congressional "log rolling" on be-
half Of highly protected interests
was one of the main factors in the
enactment of the Reciprocal Trade
Agreements Act of 1884. This gave
the administration discretionary
change tariff schedules in the nego-
tiation of commercial treaties with
foreign nations, the object being
to further our foreign trade by the
use of our bargaining power in
gaining advantages for our exports
in return for tariff concessions on
our side.
1t is this policy which President
Truman seeks to perpetuate and to
embody in the functioning of the
International Trade Organization.
The President points out that, dur
ing the 13 years that the Reciprocal
Trade Agreements Act has been in
operation, some 80 commercial
agreements have been made with
other countries, to our net advan-
tage.
He further makes 1t clear that,
this Government does not intend,
in the coming negotiations Cat &C.
,oyaN N eliminate fo rife rr oefah