Poverty Bay Herald. PUBLISHED EVERY EVENING GISBORNE, TUESDAY, OCTOBER 17, 1922. AMERICA’S POLICY OF HELPFULNESS.

Poverty Bay Herald, Volume XLVIII, Issue 15955, 17 October 1922, Page 2

Poverty Bay Herald. PUBLISHED EVERY EVENING GISBORNE, TUESDAY, OCTOBER 17, 1922. AMERICA’S POLICY OF HELPFULNESS.

For some time past there lias been a growing sentiment amongst leading statesmen, financiers, and publicists in the United States that, the country which helped the Allies to win the war should no longer refuse to take part in the deliberations which the statesmen of Europe arc pursuing, seeking to rescue the Old World from economic chaos after the war. The precise scheme of American participation has yet- to he designed, though the suggestion made by Governor Cox that Mr. U cover, now a member of Cabinet, should he sent over to assist in the reparations task, has met with general acceptance. President Harding, in his opening speech of the Congressional election reported to-day, makes a very gratifying pronouncement when he says “the last thing in our thoughts is aloofness from the'rest of the world." f( is difficult, however, to follow him in his reasoning that the new American tariff is going to be helpful, neighborly and useful, and that that tariff offers means for effecting unification and solidarity of industrial civilisation. Congress has just put the finishing touches on the tariff-—•the. first passed since the war. It might have been expected, writes the Washington correspondent of a. "British contemporary, that it would take into account, the many changes brought about by the war in America’s economic relation to the rest of the world; including the fact that the United States, from being before the war, the greatest borrowing country in the world, lias now become the greatest lending country. It might have been expected that it would take into account, specifically the fact that Europe owes the United States some fifteen billion dollars, in public and private debts. In fact, however, the new tariff does not lake these things into account at all. It. is the highest protective tariff law America has ever had. It makes no concession to the theory that, if Europe is to pay the money it owes, it will be wise for America to facilitate the payment of the principal and interest of these debts in the shape of goods rather than gold. The tariff is designed frankly with the object of discouraging the import of goods into America. The debtor nations must pay in cash, and they are not going to be helped to provide the cash by any stimulation of their industries through export to America. That this is unwise is firmly held by many American economists, bankers, ahd business men. Many of these hold that the changes wrought in America’s international relations by the war call upon their nation to abandon the policy of high protection. These elements of the community, however, the ' correspondent explains, were over-ridden in the making of the tariff. The reason for the continued, even the accelerated, policy of high protection which is now being adopted, lies in the fact that in the present state of politics the strongest single compact force is a union of the agricultural interests of the West, which expresses itself in Congress and the Senate in the shape of what is almost a third political party, and which goes by the name of the ‘‘farm bloc.” It was this faction that took the lead in the writing of the new tariff, and that has dominated it throughout: Having this leverage of power, the farm bloc constructed the new tariff upon the theory of starting with very high rates on farm products, including the raw materials of industry, especially wool. ' Upon raw wool, for example, the rate was fixed at 33 cents a pound, which is a tariff rate actually much higher than wool has sold for in the United States within the past two years. The farmers, having given to themselves these high rates, then proceeded upon the theory of allowing reasonable ‘‘compensatory” duties to the manufacturers of the East. The result of this theory has been a pyramiding of rates which makes the new tariff quite the highest the country has ever had. The manufacturers of the East are, for the most part, dissatisfied with it. They would have, preferred greatly to have low rates or no tariff at all on food products and raw materials, and a reasonable tariff on manufactured products. President Harding seeks to justify the tariff by speaking about its flexibility. An extraordinary provision not usual in the tariffs of any country is that the President is given. the power to change the rates from time to time within a range of fifty per cent., on tile basis of changes that may occur in cost of production. Just how this provision for llexibility will work out cannot be foretold accurately, but no one anticipates that in its operation it will make the new tariff materially less high. The policy of elasticity and flexibility, (he President avers, sets an example ol constructive foundation on which to base commercial policy. If he means that under this provision the President will reduce duties on the goods of countries such as Britain which are genuinely trying to meet their obligations then there may be something constructive, but the Legislature has put a power into" the hands of the President the exercise of which is liable to ho misunderstood or abused. The. question that now arises is: how the new tariff will be received by the public, how its operations will affect the cost of living and other economic aspects of the country,- and what will be the ultimate results of it- politically. The tariff is the work of the Republican party, which is now in power. In the debates that- have accompanied its adoption it lias been strenuously opposed by. the Democrats. The Democrats will now go to the country upon the theory that ft is a bad tariff and that, the country under its changed circumstances would do better to adopt a tariff 'much lower in its rates—a tariff, as the phrase is, “for revenue only.” A “tariff for revenue only” aims obviously, not at the minimum of imports, but rather at the maximum of imports, in order to produce the highest amount of revenue. This issue will give the principal color to American politics for the next two years. Tlio probability is that that period will sec on expression of dissatisfaction upon the part of the country with the new tariff, which dissatisfaction will express itself politically in a. material reduction of Republican strength, at least, and possibly in a return of the Democrats to power.