BRITAIN’S FISCAL POLICY

Otago Daily Times, Issue 21627, 23 April 1932, Page 8

BRITAIN’S FISCAL POLICY

TO TUB EDITOR. Sir, —Mr Baldwin’s apology for introducing tariff duties into England, while deprecating their ill effects elsewhere, is a very lame one. His explanation will not lie regarded as “ a thoroughly sufficient,” one by anyone who has studied attentively the public utterances of his chief supporters during recent years. It is a matter of common knowledge in England that the Conservative Party, having renounced the sale of honours, is dependent for the plenishment of its campaign, fund on subscriptions, the greater part of which is provided by the special industries that are benefited or expect to be benefited by tariffs. It/is the necessity of providing a quid pro quo for these people, rather than the /hope of bringing about freer trade bv the extraordinary method of taking a blind plunge into the morass of Protection that has brought about a change from a policy which, pursued for 70 years, has brought increasing wealth and prosperity to England, and has given a standard of comfort to her peopic.-not shared by any of her Protectionist rivals, in Europe at any rate. Of all the European nations that went through the war, England is the only one that has paid her way, besides having to-finance her Allies. All the Protectionist nations of Europe that engaged in the war have been obliged to repudiate the greater part of their debts as well as to depreciate enormously their currency. In every one of them unemployment is greatly worse than in England. and the standard of living much lower.

So far from welcoming any steps towards the lowering of tariff barriers in Europe, the party to which Mr Baldwin belongs has consistently stood aloof or thrown cold water on any attempts made in that direction. When in September, 1927, the Council of the League of Nations discussed the resolution passed unanimously by the World’s Economic Conference declaring that it was time to call a halt in the matter of tariffs and to move in the opposite direction, it was loft to Sir Austen Chamberlain to water down the otherwise unanimous resolution.

The verditt of history is against the use of the tariff as a bargaining weapon. For nearly two years wo have been bargaining with Canada. The result is still in doubt, but not even the most optimistic among ns hope for, or expect, a return to the happy state of affairs existing up to September, 1930.* As regards the situation in Europe, I have no hesitation in saying that the recent change of fiscal policy is the greatest blow to the cause of Frcetrade that has ever been dealt and that its effects on the world as a whole are likely to be calamitous in the extreme, ft is, so considered by leaders of the Freetrade movement throughout the world. European workers in the cause of Freetrade and peace regard it as much ns Ctesar is said to have regarded the stroke of Brutus’s dagger. There has been in recent years a considerable movement on the Continent in favour of Freefradc. quite enough to justify Sir George Paish, the British economist, in declaring, as he did not much more than a year ago. that “if England can hold fast to Freetrade a year or two longer wc shall see the world’s tariffs tumbling down, as the futility of tariffs as a cure for unemployment and other social ills will by thou become so obvious that

all nations will be obliged to lower their tariffs.” , Instead of any such result we are likely to see a state of things arising in England similar to that referred to by Mr C. G. Villard, the well-known New York publicist, who. in the New Statesman of December 12,* deals with Mr Baldwin’s declared intention to appoint a “ fool-proof ” Tariff Commission to draw up a scientific tariff. He says: “Great Britain has not been steeped in more than a century of tariff corruption, during which time tariff duties with us have been auctioned off to the highest bidders, who have paid thpir bids into the campaign chest. You have not raised up anyone like the head of the Manufacturers’ Association of Pennsylvania. This gentleman, who cameto Washington when the HawleySmoot tariff was in process of scientific log-rolling announced that his association had contributed 700,009 dollars to the Coolidge campaign funds, and 547,000 dollars to Mr Hoovers: that his association and he now demanded their pay in the shape of a .tariff so high that no article manufactured abroad of a kind and also manufactured anywhere in the United States, could possibly pass over the barriers. Again, England has yet to witness the brazen indecency of a, company’s appearing before a legislative committee, as here in 1929, demanding a highey duty in order to stave off a ‘ ruinous ’ foreign competition, when that same company had earned a profit of 12,000,000 dollars in 1922 and 103.000,000 dollars in 1928.” I think Mr Villard is unduly optimistic as far ns England is concerned. Two of those that clamour, loudest for protection in England are heads of firms which,_ in the year of the greatest trade -depression ever known in England, paid dividends, of 100 per cent. I should not be at all surprised if Mr Baldwin’s newly-appointed “scientific” Tariff Commission does not still further increase the protection they now enjoy.— l am, etc., J. E. Stevens. 40 Highgate, April 22.

[The value of our correspondent’s letter is not enhanced by his imputation of motives to the Conservative Party. Ed., O.D.T.]