The Wanganui Chronicle. TUESDAY, MAY 3, 1949 THE TRUMAN WAY IN TRADE

Wanganui Chronicle, 3 May 1949, Page 4

The Wanganui Chronicle. TUESDAY, MAY 3, 1949 THE TRUMAN WAY IN TRADE

QNU of the results of the victory of the Democrat Party is that the progressive lowering of the tariff, a policy associated with the name of Mr Cordell Hull, is likelyto be continued. This is helpful in bringing about a rectification of the condition of unbalance which exists acutely in world trade.

The history of the tariff of the United States is summed up in the word “Excelsior.” higher and yet higher. It has been made increasingly plain by the leading economists and financiers of the United States that the country could not continue indefinitely a policy of selling to the world but not buying from it. It was urged that for trade to long continue it must be placed on a reciprocal basis, otherwise the drain on the one side exhausts the available spending power when the trade stream dries up. It is regrettably true that in no country has a “scientific tar iff” been devised, nor has the operation or fashioning of a tarili been free from log rolling and sectional dealing. In this unfortnn ate atmosphere, while it is agreed that the general interest of th community is promoted by international trade this general inter est is given only lip service and the hard bargaining of “I wil. support your case if you will support mine” continues all of th< time. It is clear that in a democracy a particular interest will nearly always beat a general interest. Does this constitute the seed of corruption which will in the end spell the downfall of democratic rule? It is a question worthy of being well pondered at the present time. In the year 1947 the United States signed an agreement with 22 other nations covering tariff rates on 45,090 items. This achievement was too good for no attempt to be made to put it into reverse and such attempt was not long in being made. In the summer of 1948 Congress reversed the whole trend. It extended what the Christian Science Monitor called “an emasculated act” for only one year “to await further attention when the Republicans had taken over both White House and Capitol and had reconciled their differences. ’ ’

It may here be asked whether it was this lack of cohesion in the Republican Party on the vital issue of the tariff that was the fundamental weakness which, operating on all sections of the community, resulted in the majority of the votes being cast for Truman in the recent Presidential campaign. The last Republican Presidents had supported the reciprocity policy, but in the Congress which met last year the majority of the Republicans elung to protection as their economic creed The weakness of the “emasculated act” was that it cut right across all programmes in industry. With the tariff policy uncertain there could be no planning ahead in business. It tied up negotiation and placed a palsying hand upon the whole economy of America. Small wonder that unemployment developed in every section of 1 lie country during last year I

“Congress never had any popular mandate for this backward step,” declared the “Monitor” on January 28. “It would be well now to return promptly and firmly to the policy of promoting trade. We welcome President Truman’s request to Congress to renew the Trade Agreements Act for three yars. We trust that the House Ways and Means Committee will not be, thrown off by the efforts of a few Republican diehards who cast suspicion on the State Department and to link the Hull policy with Communism. We hope the extreme nature of its unworthy effort only reflects weakness in the protectionist position. “For the necessity of lowering trade barriers has become increasingly clear as America’s new creditor position has become clear. The interests of farmers and of much of the business community are now directly lined up behind efforts to find foreign markets for American goods. An intelligent tariff policy is required to supplement the Marshall Plan in easing the dollar famine abroad. It is equally essential to undergird with economic cooperation the political and potential military co-operation outlined in the Atlantic Security Paet.” This eminently sane view needs to be stressed in more countries than the United States of America, and it is the business of every man to determine to what extent it requires to be stressed in New Zealand today. American policy will depend in the ultimate upon public opinion and public opinion there will be conditioned by what is done in other countries New Zealand, a small, insignificant country when the world’s international trade is being considered, absorbs about the half of one per cent, ot America s export trade, and is not going to make much of a contribution to the American economy no matter what policy is pursued in this Dominion, but because New Zealand is an .English-speaking community what she does becomes immediately appreciated by the people of the United States. Action in this country, therefore, has a larger influence upon American public opinion than has the volume of trade. I’his is why, at the present time, a sound trailing policy is desirable in this country. If New Zealand thinks that because she is insignificant she can do ill and have that evil policy passed unnoticed a very serious misconception is being entertained. The possibilities for damage arc immense in the world as it is poised today 1 President, Truman’s policy in the United States is essential for the wellbeing not only of his own country but. for the whole world. It ; s idle to mouth the word “Freedom” and then pursue a restrictive economic policy. Either people believe in freedom or they do not. The fleshpots of Egypt are as tempting today as to the eompiaining Hebrews in the wilderness in the time of Moses. There is this difference, however, the Hebrews of old-time were prepared to barter their own liberty for social security, whereas their modern counterparts are most willing to barter other people s liberties for their own benefit. The difference should be noted. American public opinion has for long been nurtured on the protectionist doctrine. The money has been on t hat side: the monopolist could sustain his lobby at the White House and in the Capitol The struggling share-cropper who was fighting against rising costs, a hungry soil that he could not feed, and prices that seldom showed a sufficient margin of profit to enable him to ini prove his position financially was in no situation to compete with the protectionist-fed industrialist. Opinion may still be precariously posed on this issue when the strength of the Protectionist lobby is taken into account. The more liberal minded amongst the American people need all the support from the outside that can be mustered to their aid.