Evening star., 1948-12-12
WorldTrade
PolicyIsUp
ForDebate
High Tariff VS.. Low
Will Be the Issue
for Congress
By Sierid Arne
By Sierid Arne

By sisrid Arne
Not since the days of Smoot and
Hawley, in 1881, has this Nations
policy toward world trade faced
such a thorough combing by Con-
>gress.
Congress will argue the same old
issue: High tariff versus low. But
this time it will also talk about the
concessions other nations may be
willing to make to us in return for
lowered tariffs. Debate will rise on
two issues:
/. Whether, and if so, how, to ex-
tend the reciprocal trade agree
ments program. This is the plan
under which the State Department
horse trades with other countries
to gain advantages for American
goods sold abroad in return for ad-
vantages offered foreign goods in
our stores.
Plans Have Broad Purpose
2. Whether this Government
should sign the charter of the
International Trade Organization,
which the United States authored.
The ITO was put together last year
at Havana by 81 nations with the
hope of cutting down world trade
barriers.
Government architects of both
plans state a broad purpose: To
raise the worlds living standards
through better trade and thereby to
stop the spread of communism.
Violent objections to the Govern
ment program come from some sec
tions of American business, in par
ticular producers of wool, woolen
textiles. ceramics, some glass makers
and some mining concerns.
They have told congressional COM
mittees that they fear lower tariffs
will means that foreign goods will
get into our stores at lower prices.
They fear they will lose sales and
have to close down some Of their
business. They said they might
have to fire some workers.
Smaller opposition groups include
livestock raisers and raisers of nuts
This is the story on reciprocal
trade agreements:
The United States Chamber of
Commerce is much in favor Of them.
1t says the way to a richer and more
peaceful world lies in a world slogan
which 1t proposes:
More and more goods at less and
less cost to more and more people.
A Two.Way Street 4
Secretary of State Marshall, in
pointing out how many people the
program touches, said: Foreign
policy has taken a seat at the
dinner table"
Paul Hoffman, who heads the
European Recovery Program, and
who used to be president of the
studebaker Corp. told a congress
sional committee:
TT has to be two-way street.
Sooner or later we have to wake up
to the fact that unless we are will
ing to receive goods we cannot
expect to receive payment. Tariff
reductions should make payments
easier"
The reciprocal trade program
started in 1884 when the United
States had the highest Tariff Act in
its history, written by Senator
Smoot, Republican, of Utah and
Representative Hawley, Republican,
of Oregon.
The <Smoot- -Hawley tariffs came
into effect just when sales were drop
ping all over the world. They added
to the price of foreign goods sold in
our market. Foreign sales dropped
off here. Foreigners earned fewer
dollars and bought less here.
High-tariff men hoped that high
tariffs on foreign goods would help
keep up the price of American goods
in American stores.
But low-tariff men say the Smoot-
Hawley tariff caused other nations
TO throw up fences against foreign
goods lmany of them ours. Many
of those fences remain.
Hurdles for Foreign Goods
The other nations didn't rely on
tariffs so much. Instead they
erected various stumbling blocks to
foreign. goods. They limited the
amount of foreign goods their peo-
pies could buy. They taxed foreign
goods moving from city to city in
side their countries. They told their
citizens they could buy one type OF
foreign goods but not anotner. Ihey
told foreign traders inside their
borders that they could only change
a limited portion of their profits
into other money.
Former Secretary of State Cordell
Hull thought that II each country
gave in q little we would all sell
more to each other.
For example, the United States
could lower tariffs on stuff brought
in from Brazil in return for Brazil's
making it easier for Brazilians to
buy more American goods.
This was and is the reciprocal
trade agreements program. In the
past IA years Al nations have writ
ten trade agreements with us which
In different ways cut down barriers
to our goods in return for lowered
tariffs for their goods.
The State Department says that
under the last set Of trade agree
ments, written at Geneva, Switzer-