Evening Post. WEDNESDAY JUNE 12, 1929. U.S.A. SELF-SUFFICIENCY

Evening Post, Volume CVII, Issue 135, 12 June 1929, Page 8

Evening Post. WEDNESDAY JUNE 12, 1929. U.S.A. SELF-SUFFICIENCY

Now that the Tariff Bill and the Farm Relief Bill have both passed the United Slates House of Representatives (though not the Senate) there is some opportunity to judge the strength of the outside world's disposition to retaliate. If the French, Belgian, and Italian resolutions cabled on 7th June, added to the previous protests from South America, Canada, and Australia, mean retaliation with a capital R, then for the first time the Senate will be really up against it on the question of foreign trade, which is now worth annually to the United States, in exports alone, over £1,000,000,000. Hitherto the higher protectionists in that country have pretended to be unawed by the threat of foreign reprisals against this huge American export. But quite possibly what they have been really discounting is not the reprisals so much as the will to make them. They have declined to believe in a general retaliatory campaign against the United States until they can see tangible evidence of it. If, however, Europe' and Canada and Argentina now penetrate this American psychology, and are at last determined to call the bluff, the real struggle will begin. The fighting spirit in Europe, as expressed by the French resolution, should at least impress the Senate with the possibility that after all the protest-' ing foreigners may really mean what they say. ■

As business men, the Americans are far too shrewd to harbour the thought that their thousand millions of exports do not matter. Once convince them that retaliation is a real force, and they will lay the cards on the table, and make a really business analysis of the situation—than which no more is required. It is therefore in the interests of everybody that the danger of a trade fight (if the protesting countries mean it, as they say they do) should be made clear before the real trial of the new tariff is staged before the Senate. Both in the Senate and in President Hoover's Administration—in fact, in the Presidential Chair itself—are men who, though pliant to political pressure, are probably loth to concede too much to the farming and other shelter-demanding industries; if so, their task of resistance may be lightened to the degree that foreign countries exert a counter-pressure of indubitable sincerity. And'the right time is now. In the Tariff Bill and the Farm Relief Bill two apples are dangled before the United States farmer's nose. Under the former (higher import duties) he is helped at the expense of .'foreign trade; under the. latter he is offered cheap Government loans (and apparently some .form of Government assistance for rural co-operative bodies) at the expense of the internal resources of the United States. Should foreign pressure help the United States Senate to moderate the tariff, so long as there is a Government Farm Relief Bill the farmer will still not be sent empty away. Of course, it is possible that retaliation may only strengthen the Senate's haughty resolve to stand for both measures. If so, well and good! At least the United States will-have pursued its policy open-eyed to consequences. There can be no possible objection to "the solution of a purely American question in a purely American way" so long as the cards are all on the table and everybody's sleeve is empty. If the purely American business of - collecting American money.loaned to Europe can be carried out by the purely American method of raising the tariff and making it much more difficult for European debtors to pay, then Europe will have been taught something. If Canada, who sells to .the United States about half as much as she buys, should find it expedient to accept through the new tariff a further diminution, of her sales, without attempting by similar method to reduce her American purchases, then Canada, too, will have been taught something; for Canada's present frame of mind is quite in the opposite direction, and amounts to undisguised retaliation. Concerning the price that the Washington Government must pay in Canada for tariff relief to United States farmers, Mr. F. H. Simonds, writing in the American Review, has no doubt whatever:

Ovor against this relief must be set two items: An immediate contraction of tho Canadian market for American manufactures, incident to reprisal; and tho worsening of our relations with Canada. ' We stand to lose a good customer and, a valuable friend. The same' situation manifestly exists in South America. . . . What is really to be expected is the combined action of tho American nations—to-day our most promising markets—and of the European countries which are our most active competitors Europe is steadily organising a supremo attempt to recover its pro-eminence lost to the United States as a consequence of the world war.

Mr. Simonds sums up the whole issue when he says that "American prosperity is: no longer a self-contained circumstance." The present United States tariff virtually proclaims the opposite; or, at least, it says either that outside countries will not retaliate or that the thousand millions of exports do not count. It is just here that evidence of retaliation becomes important. A correct Congressional estimate of the value of 3ie export trade depends on a sense that that trade is really in danger. Apparently in no other way can the theory of self-containment be brought to triaL