CANADA “FIGHTS BACK”

Taranaki Daily News, 23 July 1931, Page 5

CANADA “FIGHTS BACK”

UNITED STATES HARP HIT. HIGH TARIFF A BOOMERANG. San Francisco, June 23. , At the time of . ths worst industrial depression and largest Unemployment and largest Federal deficit in the history of the United States, the Hoover higher tariff has destroyed Uncle gam’s richest foreign market and strained the friendship of his best neighbour. That is the significance of the new Canadian tariff wall, raised in retaliation against the U.S.A. Last year Canada, Uncle Sam’s largest and friendliest customer, protested against , the proposed tariff s 'increases of the Hoover Administration, but the latter ignored it. Three times in a little more than a year Canada has struck back—in May, 1930, in September and on June 1, and now there is a prohibitive tariff, or a virtual embargo, on many of Uncle Sam’s exports, which in 1920 totalled almost one billion dollars. In the last twelve' months Canada’s imports dropped from, 847 to 584 million dollars. . Thus the higher tariff which was touted to protect American industry and wage-earners, has closed or put on part time many American factories,’and added to the 6,000,000 unemployed. To evade the retaliatory Canadian tariff wall, many American plants have moved to Canada, throwing more Americans out of jobs permanently. In Ottawa the Prime Minister, Mr, R. B, Bennett, announced that since the September tariff increase 75 new American industries had moved to Canada, in addition to the 389 American subsidiaries, valued at about 485,000,000 dollars, already operating there. To hasten and increase that flight of American capital and industries to Canada, the Qttawa Government has now provided only a low 2 per cent, income tax on Canadian investments of non-residents. An aroused Canada threatens to turn the Hawley-Smoot tariff into the biggest boomerang in the economic history of the United States. Unable to get past retaliatory tariff walls raised against American goods by foreign Powers, United States industries are building branch factories abroad, em- y ploying foreign labour and using these branches as bases for their export trade. Foreign reaction against America’s tariff policy is leaving them no alternative, they say. The strongly nationalist Government of Mr. Bennett, one of the shrewdest political war-horses Canada has ever produced, is now “fighting back,” and asking no quarter. Canada to-day aims nt nothing less than making herself perhaps the greatest manufacturing and exporting nation in the world—greater than England and greater than the United States, She j e . extending an open invitation to American industry to establish plants in the Dominion, and her inducements are many. One advantage is location in a country that is closer both to Europe and the newlyawakened Asia by several hundred miles than is the United States, and with only a slight disadvantage in reaching the 20 republics of Latin America. Another advantage is that cheap and plentiful hydro-electric power, over which the Government keeps strict control, is available. Canada possesses an unsurpassed base for foreign trade, with the benefits of preferential rates with other members of the British Empire and special trade relations with 23 foreign nations. Her domestic markets are expanding also. The rush to establish branch American factories in Canada continues. No loss than 107 important concerns opened branches in Canada in 1930, more.than doubling the 1929 exodus and quadrupling the number that migrated in 1928. °While parent factories in Cleveland, Detroit, Akron, Pittsburgh, Toledo, Buffalo and elsewhere in the States are working part time, branch plants on the other side of the international border are turning out identically the game goods for sale, not only to Canadians, but for export to the four corners of the globe. This is not the fault of American industry, for most American industrialists warned the tariffmakers that something of the sort was bound to happen. Canada is merely pro-i filing by America’s mistake. '