COMING TARIFF WAR.

Press, Volume L, Issue 15023, 18 July 1914, Page 6

COMING TARIFF WAR.

CONFLICT THAT MAY

CONTULSE EUROPE

GERMANY, AUSTRIA. ANl> RUSSIA. (lEOM A*ORItESrOXEEST.) ST. PETEKsiiuxlG, June 8- I h etatco are armia.; for a tariff war. The war will come m 1917; and Germany, Austria-B.uu£ary, and Russia will take part-. Perfiaps, ' also. Franco. Already bkirmishins has begun; and vigorous aggressive measures are being taken by Kussia against tbo favourite economic moasuros of Germany's agrarians. Germany i» derising measures of retaliation. Austria and Hungary have both officially proclaimed themselves unfriendly to the German tariff. Not sine© Count, "Wittc'a tariff war with Caprivi, in 1893, have prospects boon seen of such, a big eoonomic struggle. Germany's Imperial Secretary of State for the Interior, Vv. Clemens yon Delbriick, precipitated tuo tariff war. Ho proclaimed that Germany would stand meekly on tho defensive, and m this way ho encouraged nor ncighoours ti begin the attack. Germany's oi&----toais relations with Kussia and AustriaHungary are rcgulatod oy commercial treaties oPi&O6, which are based on tho Biilow tariff of 1903. This tariff is hJgnly protectionist. It raised iieaviiy the duties on the Caprivi tariff of Iowa; and in particular it increased the duties on rye and wheat. Tho iiiilow tauu satisfies no one in Germany and no on© oatsido. Iho German Socialists and the Radical People's Party ascribe to it tho high prices of bread and meat; and the Agrarian Conservatives complain taat ib is not high enough. The finishing manufacturers condemn it because it favours the raw material producer who burdens them with high coal and iron pricos. Between i-heco interests official Germany is in difficulties. To negotiate for commercial treaties on the basis of lower duties would estrange the Conservatives ; and against the Conservatives no Chancellor can stand, lo proclaim for higher duties is dangerous •owing to tho Reichstag s doubtful attitude, and to tho existing violent agitation against food prices. The Government, therefore, decided to do nothing. . In January. i>r. Delbriick told the Reichstag that no ohango would bo made. "Tariffs," he eaid, "are neither too high nor too low, but just right. Germany will stand on the defensive. She will not give notice in 1917 to terminate the commercial treaties; eh© hopes that foreign coun-tries-iwiat » mainly Russia and Aus-tria-Hungary) will let tho existing treaties stand." Thip peaceful declaration ishaving an effect exactly opposite to Delbriick's expectations. It nas produced breathings of war from the high-orotectionists of Austria-Hungary and Russia % and fiercer breathings still from Germany's high-protectionists. Germany's' highprotoctionists say they will not tolerate the present tariff. They want it replaced by a "water-tight," which practically means a prohibitive tariff. They demand that Austria and Russia JO forced by threat of retaliation to reduce existing duties on Uorinan manufactures. In this German determination that Germany shall raise hor duties, and in tho Kusso-Austriaa determination that Germany them dorm, are the elements of a tariff Arlnageddon which will convulse Europo; and oven, as tho inspired "Kolnischo Zeituag" savg, may lead to an Armageddon of blood. Austria-Hungary is determined to oprjoso Gormany's policy. The Foreign vrt> fico organ, "Fremdcnblatt," replied to Delbriick's programme with tho word "unthinkable." Tho present commercial treaties, it Kays, aro impossible. Scores of Austrian societies representing manufactures and agriculture have paseod resolutions declaring thai Germany must bo forced to cut down her duties, and that Austria must put up hers. Hungary is oven more interested than Austria. Hor landowners and farmers are in a strongly anti-German mood. They aro well led'by Baron Emerich Ghillany, the new Minister of fAfjfricufture, a igreat, export* and a fierce patriot. Baron Ghillany proclaims through hie newspaper that Germany's tariff oolicy towards Hungary must "be eteadfastly fought. The "Budapest Chamber of Commerce and the Hungarian Society o/ Industrials aro backins up Baron Ghillany's protest. . Russia's high protectionists aro in the same fighting mood. In February, after Delbriick's proclamation of poaoe, numerous congresses were hold for tho purpose Of declaring a commercial war. Iho congresses passed resolutions against coming to an agreement with Germany except on condition that Germany cuts down her food duties, stops the veterinary chicanery which is need as a nrefcoxt for excluding Russian cattle, and abolishes the present system of {riving veiled bounties on corn. The Moscow, Polish, and South Russian manufacturers demand higher duties against German finished goods. The present commercial treaty is assailed as humiliating. "The treaty," says a Duma Deputy, "is a worse disgrace for Rueeia than the Japanese War, and it must bo wiped out." Russia .started preparing for tho tariff war last year. An enquiry commission was appointed under the presidency of M. Timiriazeff, an ex-Minister of Commerce, and a strong protectionist. Tho enquiry oommissiou is working along lines which mako a tariff war inevitable. Timiriazeff declares thai tho now commercial treaties inusl foster tho industrialisation of Russia. Tho only way to do this is to rake tho duties on German manufactures. The Russian aomstvos and export chambers have also instituted commissions to draw up model tariffs, all of whioh have prohibitive character. The Russian aim is to exclude German ..goods, and at the same time to compel Germany to admit Russian goods. Econonv icaliy this ia impracticable, but the protectionists are in a fighting mood, and they desire to inflict on competitors sll the harm they can. Most serious or all conflict causes are Germany's "import certificates." Tbeee are a veiled bounty on exported German grain, ■β-nich Austria and Rue-

sia both resent. The "import certitieatos" were sJ v en in 1894 bj Chancellor Caprivi to tho agrarians as compensation for tne cutting uowu of tnc grain duties. The exporter of grain gct6 a certificate which entities him to import duty-free from abroad grain in equal quantity. At first these "import certificates" were accepted by the Customs officials only in payment of duty on tho same kind of grain for which they wero issued; but later the certificates were mado valid to nay import duty on other goods, including coffee and petroleum. Tho grain exporter sold tbo certificates on the Stock Exchange as Government 1.0.U.'s at practically their full nomiual value. The use of the import certificates was restricted two years ago, but the effect of the system remains. Germany is uofc self-supporting in tho matter of food, yet, with veiled bounties, sho finds it profitable to export rye to Russia. Tho production and export of no have grown enormously. In 1912 Grormany exported 800,000 tons of rye and imported only 300,000 tons. Russians buy German rye much cheaper than Germans can buy it, and even chfcaper than their home production cost. The Russian frontier provinces complain that they cannot compete. Aleo Hungary complains. As a grain exporting country she feels tho German competition. •In the coming tariff war the abolition of "import certificates" will probably bo insisted on by Russia and Austria-Hungary. , For fighting a general tariff war Germany is worse off than Jlussia and Austria. Tho Russian Duma in economic matters is entirely subservient to the Government; and tho Au6trian and Hungarian Parliaments aro thirsting for a tariff fight. The Reichstag is doubtful. Of tho 397 members, about 200. including the Conservatives and Centre, would support higher duties; and about ICO, counting Socialists and People's Party, stand for low duties or no duties at all. Between theso groups at-and 44 National Liberals, who are the deciding force. By voting against the Conservatives and Centre they could defeat the attempt to raise tariffs and to fight a tariff war. The 'National Liberals aro professed protectionists, but their leader, Herr Bassermann, declared himself emphatically against raising tho food duties. Tho party, %oworer, wobbles; and it contains two factions: As champion of the "Schwerindustrie" —the gre.it coal and iron producers—it tends towards high duties. The "Sohwfirindustrie" wants more and more protection of ite products; and in the past it Iras attained this by making a pact with tho agrarians on the basis: wo back your demand for higher food duties if you back our demand for higher iron dntiea. Herr Bassermann's party, if it is to foe faithful to its "Schwerindustrio" friends, must also support the agrarian food-tariff party, and in tho end it will probably stand for a higher tariff all round. That would f?ive tho high tariff coalition 250 Reichstag members; and make it impossible for tbc Imperial Government to maintain the present commercial treaties.