No Peace on Putin’s Terms
Why Russia Must Be Pushed Out of Ukraine
THE European response to the signing by President Hoover of the Hawley-Smoot Tariff Act was disapproval--immediate, undisguised and unanimous. Leading journals devoted columns to the discussion of the new American duties, analyzing their probable effect on exports to the United States and considering the possibilities of effective retaliation. A few conservative organs subjected the new act to cold-blooded analysis; but in Europe, as in the United States, such newspapers form a small minority. The popular press in Belgium, Italy, France, Germany, Spain, Sweden and Switzerland did not mince matters. In France our tariff was compared to a declaration of war, an economic blockade. In Sweden it was denounced as "the most terrible blow against the economic life of the world." A Spanish newspaper pictured the United States as "trampling on fair competition and on the peaceful spirit of international relationships." In Belgium the latest manifestation of American protectionism was assailed as narrow and malevolent, reckless, puerile, inopportune, highly damaging to trade and contrary to the traditions of friendship between the two nations. An English newspaper compared the Hawley-Smoot tariff to the German attack of 1914. One German daily complained that the United States by its haughty attitude had provoked the indignation of all trading nations, and another referred to the Hawley-Smoot tariff as "a monster of economic folly." There was a common note in the chorus of protests, however much they may have differed in expression, namely, the conviction that the new American import duties constituted a serious menace to the economic progress of western Europe.
Americans, even those of us who are most lukewarm about the merits of the new law, are astonished and perhaps somewhat irritated by the volume and tone of foreign comments. We are glad that the interminable and unenlightening tariff discussion is over. We want now to get down to business and make the best of an admittedly imperfect law. Why can't the foreigner do likewise? Aren't his protests exaggerated, and after all isn't the tariff a domestic policy, our own affair? It is the purpose of this article to explain the peculiar bitterness of the European reaction to the tariff of 1930 and to appraise its probable results on our commercial relations with European countries.
To begin with, the new American tariff hit Europe at a bad psychological moment. In June and July 1930, European business was in the trough of a depression comparable to that which prevailed in the United States six months earlier. In England unemployment figures showed a substantial increase, the coal trade lacked orders, automobile buying was reduced, and exports of chemicals had fallen off; in few if any industries was there confidence of revival in the immediate future. The Swiss watch and textile industries had curtailed production. In Belgium eight out of ten modern window-glass factories were shut down and the plate-glass factories were operating at only 30 percent of capacity. In northern France, in July, thousands of textile workers went on strike. Political uncertainties in Spain dashed the peseta to new low levels. In Germany the unemployment problem was acute, the stock exchange stagnant, and iron and steel production 33 percent below the 1929 level. In Italy an extreme deflationist policy and heavy and increasing taxation were aggravating an already unsatisfactory business situation.
But there are elements in the European attitude toward our new tariff law much more fundamental than those arising from the immediate business situation. They can be understood only by reference to American commercial policy and our economic relations with Europe during the past eight or ten years. While the United States has steadily strengthened its position year by year as the leading economic and financial power of the world, Europe has wrestled with only indifferent success with the problems of recovery from the war. One of the fundamental conditions for recovery is the development of export markets outside of Europe.
It is difficult for Americans to appreciate the vital necessity of export markets to the manufacturers of such nations as England, Germany, Belgium, Switzerland and Austria. Mr. Owen D. Young has lately pointed out the determining effect which the disposal of surpluses of 8 or 10 percent of production may exert on American industrial prosperity. Consider, then, the importance which must be attributed in Germany to export markets which absorb 25 percent of its silk goods, an equal proportion of its rolling mill products and from 50 to 60 percent of its metal wares; or in Belgium, which exports 90 percent of its plate glass and window glass and 60 percent of its cement; or in Switzerland, which exports 95 percent of its production of watches and 98 percent of its embroideries. In all of these countries, as in the United States, there are of course the sheltered trades, the public utility enterprises, professional and personal services and the building trades, which are only indirectly interested in the fluctuations of export trade; but to a far greater extent than with us the European commercial and industrial community, from wage earners to heads of enterprises, feel that their bread and butter depends on sales to foreigners.
In the United States there has developed since the war the greatest market for manufactured goods of all time, far exceeding in its purchasing power anything which the world has ever witnessed. Europeans feel that our protective tariffs have prevented them from securing a reasonable participation in supplying that market. Our first general tariff enacted after the war, the Fordney-McCumber Act of 1922, characterized by the Manchester Guardian, an organ which is sparing of superlatives, as "the most extreme protectionist measure ever undertaken by any country," was framed in a period of great uncertainty in international trade. All over the world, prices had suffered a severe collapse from the extraordinary peaks of the post-war boom. Currencies of practically all of the great trading nations, except the United States, were depreciated. European nations were having great difficulties in balancing their budgets. Some had given up the task entirely and were frankly paying current expenses with new issues of paper money. In the United States new industries had sprung up under the abnormal protection afforded by war-time embargoes and by high shipping charges. They as well as older industries had little idea of the potential competition of Europe. Exaggerated rumors were afloat of great stocks of finished goods in European warehouses ready to be dumped on American markets. A tariff act framed under such conditions by a party pledged to full protection of American industries was inevitably characterized by high rates. Some of those who were responsible for the rates were not convinced that they would prove permanently necessary. They looked upon the act as in some degree an emergency measure. Consequently they provided, in the so-called flexible clause, a means of modifying rates by executive action. Great hopes were entertained by the sponsors of this new departure in tariff making. Even so staunch a protectionist as Senator Smoot said: "If the conditions become normal, I expect the President of the United States to lower, I was going to say, the majority of rates."
European exporters, then as now, when they complained of the hardships imposed on their business by the new American tariff, were referred to the flexible provisions as a source of relief. But they did not derive much satisfaction from the operation of this new departure in scientific tariff making. In eight years rates were decreased by Presidential proclamation on six commodities. Taken altogether, the value of the imports of these commodities in 1929 was only $7,689,000, or one-half of 1 percent of total dutiable imports. Moreover, the new machinery of tariff making, which had been advertised as a relief from the high rates in 1922, actually operated to raise the rates as a whole still higher. Altogether there were 33 proclamations raising rates of duty, and the 1929 value of the imports affected was $78,500,000. Plate glass, window glass, linseed oil, butter and cheese were some of the items of substantial importance to European countries on which rates were increased by Presidential proclamation.
The United States enjoyed seven fat years under the Fordney-McCumber tariff. With the rapid strides in technical improvements and in labor organization, wages rose and the consumption of manufactured goods of all kinds reached fabulous sums. But only a small fraction of these goods came from European factories. In the years 1910--1914 Europe supplied us imports to the value of $836,498,000 annually, representing 50 percent of our total imports from all countries. In 1923--1928 the imports from Europe averaged in value $1,217,067,000, but they then constituted only 30 percent of the total. In pre-war years Europe sent us $309,400,000 annually of manufactured goods. During the first six years of the Fordney-McCumber tariff the average was $483,330,000, but whereas before the war about one-fifth of all our imports were European factory products, during six years of the Fordney-McCumber Act the proportion was between one-eighth and one-ninth.
If we contrast the growth in our national income with the growth of imports from Europe, putting both on a per capita basis, the results are still more striking. In 1913 our national money income per capita is estimated to have been about $325. Of this income $3.25, or exactly one dollar in a hundred, was spent in the purchase of European manufactures. Fifteen years later our per capita income had risen to $675, but the purchases of the products of European factories were only $4.32 per capita. With $350 of additional income we spent only $1.00 more than in pre-war years on European factory goods. Before the war Switzerland, Italy and the United Kingdom marketed in the United States between 8 and 10 percent of their total exports; France and Germany, 6 to 7 percent; and Holland, 4 percent. Notwithstanding the great expansion of the American market, these percentages remained substantially unchanged in the years 1923--1928. For the United Kingdom and Holland, the American market seems at present to be less important than before the war. It is facts of this kind which the European business man has had in mind in speaking of the rates of the Fordney-McCumber tariff as prohibitive. It is obvious that European goods have not been excluded from the American market, but the trade has been confined within narrow limits and its character has been altered.
The British "Survey of Overseas Markets" of 1925 said:
It is certain that, among the articles in which quality and fashion are the chief factors, the increased prices necessitated by the tariff have not reduced the volume of shipments from the United Kingdom to the United States. It is equally certain, however, that, in staple lines of manufactures in which quantity and low prices are important factors, the tariff has rendered competition from the United Kingdom practically impossible.[i]
A German specialist on international trade, after careful consideration of the effect of the American tariff policy on European industries, concludes:
A few branches of European industry can doubtless market something in the United States. In fact, they carry on a very good export business, since generally they can sell to America at higher prices than to other markets. But for European industry as a whole and, in particular, for those branches which may be called key industries, the possibility of export sales are so small that the assertion appears to be justified that herein lies an essential hindrance to the economic recovery of Europe. . . . The tariff is, of course, not the only cause. The increasing competitive ability of American industry, and the consuming habits of various classes of the American population are also involved, but outstanding importance should be assigned to the import duties. In fact the introduction of customs duties in America is nowadays justified on the ground that they make the import of foreign goods impossible, restricting the domestic market to American industries. American business has its attention fixed on the American market, and the tariff shuts off Europe by a Chinese wall.[ii]
The Hawley-Smoot tariff will necessitate a new adjustment on the part of European industry. General statements comparing the average level of our new tariff rates with the general level of the Act of 1922 have little significance and are apt to be misleading. Perhaps the best estimate is that the new duties are about 20 percent higher. But European importers are not so much interested in general trends or averages as in the increased rates on particular items which they consider of substantial importance.
Swiss watches, of which we imported 11 million dollars' worth in 1928, paid duties ranging from 40 to 60 percent of their foreign value. Exact comparison of the new and old tariff rates on watches is not possible owing to changes in classification, but a conservative estimate is that, under the Hawley-Smoot tariff, Swiss watches will pay about 50 percent more than under the former act. About 20 percent of the total output of Swiss watches in recent years has been sold in the United States. Embroidered cotton handkerchiefs, also a Swiss product, which paid 75 percent ad valorem under the old act, will now pay about 100 percent.
Germany will feel the increase in the import duties on porcelain dinnerware from 70 to 80 percent ad valorem, on optical instruments (45 to 60 percent), and on surgical instruments (45 to 55 percent). Silk embroidered articles and silk lace goods, a French specialty, will pay 90 percent instead of 75 percent. Brier pipes, also a French product, will pay about 100 percent instead of 60 percent. French clover seed will pay also double the rate of the 1922 act. Among the Italian manufactured goods which will pay higher duties are silk fabrics, hats and gloves. Belgian cement, formerly entered free of duty, is now dutiable at 6 cents per hundred pounds, which at present prices is equivalent to 17 percent of its foreign value. Belgian brick have also been taken off the free list, and are made dutiable at $1.25 per thousand. The rate on plate glass, imported principally from Belgium, has been stepped up from 80 to 86 percent. These increases will be only partially "sweetened" by lower duties on cut diamonds.
Spanish olive oil was raised from 7½ to 9½ cents per pound, and Spanish onions from 1 to 2½ cents per pound; the onion rate when computed on 1928 values amounts to 118 percent. The imposition of a new duty of 15 percent on shoe upper leather will hit import trade amounting to $9,000,000 annually, which has been shared by Canada, Great Britain, the Netherlands, Belgium, France and Czechoslovakia. France and Czechoslovakia will also be affected by the new duty of 20 percent on shoes. Increased duties on woolen goods (raised from 70 to 84 percent on the average) will be felt by textile mills in Great Britain, Italy, France and Germany. The list might be indefinitely extended. The samples are enough to show that European apprehension has not been unfounded. In certain cases the ratios which the new duties will bear to the foreign value of goods may prove greater than the figures cited, which are calculated on 1928 prices. When a part of the duty is specific, as in the case of woolen goods, i. e. so many cents per pound, the burden of the duty, i. e. its ad valorem equivalent, will depend upon market prices. If the present downward tendency of world prices continues, the obstruction to international trade afforded by the compound duties will tend to increase.
European business men, who have been told that the fundamental principle of American protectionism was the equalization of foreign and domestic costs of production, have been amazed at the disregard of this principle shown by the American Congress. Italian exporters of canned tomatoes find the new rate on their product to be 50 percent, whereas a recently published report of the United States Tariff Commission showed that 31 percent would equalize cost differences. The same report indicated that only a 20 percent duty was necessary to equalize foreign and domestic costs on tomato paste, but Congress raised the duty notwithstanding from 15 to 50 percent. Cherries in brine, also imported from Italy, were raised to 9½ cents per pound, although the Commission found that 7½ cents was sufficient to equalize costs. After an exhaustive investigation of the costs of butter production in the United States and in Denmark, three members of the Commission found that a rate of 11.95 cents a pound would be sufficient to equalize cost differences. A single commissioner found a difference of 14.95 cents, but two members of the board vigorously attacked the findings and contended that the facts shown by the investigation justified no increase from the 8 cent rate of the Act of 1922. The 1930 rate is 14 cents. Congress raised the rate on flaxseed to 65 cents a bushel, although the Commission's findings indicated a rate of 56 cents.
In tariff making, as in other provinces of international politics, it is often true that what you do does not count for as much as how you do it. The failure of European exporters, and some public men as well, to understand the American method of tariff making is partly responsible for the resentment which the Hawley-Smoot Act has aroused. In Europe, at least on the Continent, tariff making is a bargaining process. The usual form of customs tariff contains two or more columns of rates. A single commodity may be dutiable at any one of several rates according to the country of its origin, and the determination of the rate which is applicable to imports from a particular country depends upon the terms of the commercial treaty with that country. Thus periodical legislative revision of general tariff schedules is overshadowed in importance in Europe by the negotiation of commercial treaties. In such negotiations each group of delegates strives to gain the maximum advantages for its national industries and surrenders as little as possible to the opposing side. Inevitably a compromise results, not entirely satisfactory to either side, but each country feels that its economic interests have received full consideration.
The American process is quite different. Our tariff contains a single schedule of rates applying to all imports (with the exception of those from Cuba) without distinction of country of origin. The American principle is equality of treatment for all and special favors for none. It has manifest advantages and is perhaps better adapted than any other to our political institutions. But to Europeans it appears arbitrary, because it affords no opportunity for haggling or for the exchange of concessions, practices which are deep-rooted in European business and diplomacy. In the American system there seems to be small place even for the presentation of the point of view of foreign nations. From time to time during the course of the tariff debate, and particularly in its last stages, foreign governments attempted to get our Congress to consider the effects which some of the proposed changes in rates would have on their industries. Altogether more than thirty nations transmitted memoranda on our tariff to the Secretary of State, who forwarded them to the Senate Finance Committee. Among these communications were some obviously ex parte statements. Others made extended use of fallacious arguments. But a respectable number, particularly those from Switzerland, Austria, Belgium and Italy, contained carefully prepared analyses of competitive conditions which were entitled to thoughtful consideration. The communications were printed as a public document, but that was about all the satisfaction that their authors obtained. It would probably be an exaggeration to say that Congress paid no attention to the representations of foreign governments. Senators opposing rate increases called attention to them in debates, but in the committees where the important decisions were made it was the domestic and not the foreign situation which claimed attention. Even had our Congressmen been more interested than they were in the foreign repercussions of our tariff rates, still the presentation of the foreign point of view by letter or in a printed document is far less effective and gives less satisfaction to the foreigner than the system with which he is familiar, namely, face to face discussion in the negotiation of commercial treaties.
Perhaps it ought to be said here that the Hawley-Smoot tariff was to some extent the occasion and not the cause of the recent explosion of European opinion. French, Belgian or Italian business men seldom think of our tariff policy by itself, that is, apart from other manifestations of our foreign policy. You can't talk tariffs with any one of them for five minutes without his bringing up the question of debt settlements. It is of little use to explain how unrelated these matters are from the point of view of the American Congress. Immigration restriction may be the nexttopic, and before your conversation is ended, prohibition; or the gold policy of the Federal Reserve Board may be cited as an additional evidence of America's disregard of European interests. Your European acquaintance will not think of denying that immigration, banking, and the tariff are "domestic questions" and that in legislating on them the American Government is exercising sovereign rights. But he may suggest that in matters which so intimately affect the welfare of other nations even sovereign rights might well be exercised with "a decent respect to the opinion of mankind."
The European reaction to the Hawley-Smoot tariff is thus a complex of many factors. Among the sentiments aroused is a large measure of disappointment. When the news reached Europe that Mr. Hoover had been elected by an overwhelming majority President of the United States, the friends of America rejoiced in the anticipation that a new spirit of sympathetic understanding of Europe's problems would characterize our foreign policy. In Brussels, King Albert honored with his presence a distinguished gathering in celebration of the victory at the American polls of "the friend of the Belgian people." Throughout the long course of the tariff debate, until the very end, the hope lingered in Europe that the President would be able to curb the excesses, as they seemed, of Congressional protectionism. It is a striking tribute to the greatness of Mr. Hoover's reputation in Europe that German and French newspapers, recovering from their disillusion, now express confidence in the President's ability to afford relief to European industries by the use of the new flexible provision.
What will Europe do? In what practical way will the resentment aroused by our new tariff express itself? It is needless to insist that this is a question of first-class importance to American business men. They are told by tariff apologists that they need not worry. Foreigners, it is said, always protest against our tariffs. They made a great fuss in 1922 about the Fordney-McCumber Act, but it all blew over. But business men appreciate, better than those who were responsible for the increase in duties, that 1930 is not 1922. Last year the European market absorbed $2,341,000,000 of American exports as compared with $2,083,000,000 in 1922. American firms now have about $650,000,000 invested in branch factories in Europe. These are indications of the extent to which American business has exposed itself to changes in European public opinion and European legislation. We can no longer disregard the European attitude toward our policies, for we have become vulnerable, and Europe knows it.
Retaliatory tariffs are the most obvious weapons to oppose the new American barriers to European trade. The popular press of France, Belgium and other countries promptly demanded that their governments increase tariff rates on American goods. The example of Canada was cited and applauded. Without waiting for the final stages of our tariff legislation, the Canadian Parliament on May 19, 1930, enacted a new customs tariff which by increasing the rates on certain American goods and by widening the margin of British preference put our trade at a disadvantage. The Prime Minister, Mr. Mackenzie King, although avoiding the word "retaliation," stated that the Canadian legislation was influenced by the increased rates proposed in the American tariff. Mr. King's government has since been turned out of office by the Conservatives, who propose more drastic treatment of the American trade. But Canada is in an exceptional position, because of its dominion status, to retaliate without technically discriminating against the commerce of the United States. Most European countries would find direct action of this kind impossible or inadvisable. To a certain extent American exporters are protected by commercial treaties guaranteeing most-favored-nation treatment. But even countries such as France and Spain, with whom we have only executive agreements terminable at short notice, would hesitate to denounce them and thus proclaim a tariff war on the United States. No European country wishes single-handed to initiate so uneven a struggle. Besides, while it was bearing the brunt of the conflict, its European neighbors might displace its goods in American markets.
Of course, a combination of European nations would have a better chance of bringing the United States to terms by united tariff action. The encouragement of schemes for economic and political federation, such as that of M. Briand, is an interesting by-product of the Hawley-Smoot Tariff Act. In this article we cannot attempt to analyze these schemes or to weigh the chances of their success. But however important the movement may be and however fruitful in future development, it need not enter for the moment into the practical calculations of American business men. Even the more limited scheme of a European customs union, such as was discussed in Paris early in July by unofficial delegates from fourteen European states, gives little promise of practical accomplishment. Leaving aside the nationalistic prejudices which have so long kept these countries apart, the great obstacle to all schemes for raising a customs wall around Europe is that at the same time inter-European tariffs would have to be lowered. Small states such as the Netherlands or Belgium fear to enter a combination which might be dominated by large units. By agreeing to lower their tariffs they would lose a means of securing favorable treatment for their industries by international cartels. The new states of central Europe, anxious to hasten the process of industrialization, would be reluctant to expose their infant industries to German or Belgian competition. It is true that the lowering of trade barriers in Europe has been the subject of active discussion at Geneva, and has been the subject of several international conferences. The conferences were fruitful in noble sentiments but barren of practical achievement, and meanwhile the trend of European tariffs has been upward. It should not be overlooked that European tariff policies for generations have been framed principally with European competition in view, and to substitute as a determining influence competition with the United States is a change too radical to be accepted overnight.
But there are a variety of methods of discriminating against American trade which can be undertaken by a single country, and without violation of treaty obligations. In Italy, for example, a royal decree which became effective on June 27, ten days after President Hoover signed the Hawley-Smoot Tariff Act, made substantial increases in the import duties on automobiles. The lowerpriced American cars will now pay double the former duty and the increase on higher-priced cars will be even greater. The depressed condition of the Italian automobile industry was the reason assigned for the change in duties; retaliation was disclaimed.[iii] The fact remains that since over 80 percent of all Italian imports of automobiles originate in the United States, the American automobile industry will chiefly suffer. In Spain a new tariff schedule published July 23, 1930, increased, among others, the rates on such typically American products as automobiles, motorcycles, pneumatic tires, safety-razor blades and sewing machines. It was explained officially that the new tariff duties were not intended as a reprisal against the United States, and that the revision had been in preparation for a long time. In April the French tariff duties on imported automobiles and parts, imported principally from the United States, were increased substantially and in July the rates applicable to American lard were doubled.
In international affairs, as well as in the behavior of individuals, motives are mixed and it would be unjust to impute a single motive to administrative decrees which may have been based on a variety of causes. In the tariff changes which have been cited, and others such as those recently enacted in Australia and New Zealand, the protection of national industries may have been of fundamental importance, but this does not exclude the possibility that resentment against America was also involved. Tariff policies the world over are shaped by the pressure of conflicting interests and in the conflict the desire to pay off America may occasionally be decisive. Besides, politicians and even statesmen are not averse to killing two birds with one stone.
Obstacles to American trade can often be interposed quite as effectively by administrative regulations as by legislative measures. Take for example the embargoes imposed for sanitary purposes. Three days after the Hawley-Smoot bill became effective Great Britain prohibited the importation of certain grades of raw apples from the United States. Argentina has recently imposed restrictions on the importation of American eggs. The necessity of taking every means to protect the public health and the health of plants and animals against disease furnishes the strongest kind of justification for sanitary measures such as these, but experience has abundantly shown the possibilities of their use as weapons of commercial policy. The guarantees of most-favored-nation treatment under commercial treaties cannot be invoked against embargoes based on sanitary reasons, or against the rationing of automobiles as now practiced by Poland and Czechoslovakia, or the fixing of quotas for films imported into France and Germany. In cases of this sort American exporters must rely for fair treatment on the protests and representations of our diplomatic and consular officers and commercial attachés. But in the atmosphere created by the Hawley-Smoot Act these officers will not find their task easy.
More serious in its ultimate consequences to American business interests than either retaliatory tariffs or unsatisfactory treatment of our exports at the hands of foreign administrative officials is the threatened loss of the good will of our European customers. As long as the typical American exports to Europe were food stuffs in their crude form, raw materials or semi-manufactures, it did not matter so much what the man in the street in Switzerland or Italy thought about Americans and their tariffs. He continued to eat bread made of American wheat and to wear shirts of American cotton without even knowing the difference. Most of our exports lost their national character before coming into the possession of ultimate consumers. But now highly advertised consumers' goods are making up a steadily increasing proportion of our sales to Europe. By dint of extensive publicity in European newspapers and the vigorous and intelligent efforts of American sales managers, the word "American" when applied to automobiles, typewriters, adding machines, sewing machines, and even socks, shirts and razor blades, has acquired enormous value as a sales slogan. It is an intangible asset which may be destroyed by the resentment of our European customers to what they consider an unfair American tariff. This is the real danger with which American export interests are faced.
Certain journals in Switzerland and in France have not hesitated to urge consumers to refuse to purchase American goods, and there are indications that this appeal has already been responsible for the increasing difficulty of marketing American specialties in those countries. A general boycott of American goods in any European country would be difficult to organize, since it would require individual consumers to sacrifice the immediate advantage which American goods offer in the way of lower prices or better quality to the rather problematical benefit to be gained by the entire community in punishing America. But once set in motion, the boycott is a most effective weapon and has incalculable consequences. High tariffs are notoriously ineffective in checking the imports of luxury goods, and to an increasing extent imports from the United States partake of the character of luxuries. But a boycott such as that proposed in 1929 by the Royal Automobile Club of Italy, by branding the purchaser of American goods as unpatriotic, puts a most effective end to their importation.
There are other possible repercussions to the Hawley-Smoot tariff lying outside the scope of this article, and these may prove in the long run as unfortunate in their effects on American business interests as those we have discussed. I refer to the losses which may be sustained by American prestige and leadership in international affairs. It would be only natural to expect that for a time at least American appeals to European states to join with us in far-reaching schemes for the improvement of international relations and the welfare of mankind will fall on somewhat unresponsive ears.
Dissatisfaction with American tariff policy has long been evident in academic circles in the United States. The hopeful element in the present situation is the spread of this spirit among thoughtful business men and men of affairs. The new attitude found fine expression in an address made at San Francisco by Mr. Owen D. Young shortly after the new tariff act became effective. He said: "How can we market either our agricultural or industrial surplus to the world so long as we act on the principle that we are not interested in the welfare of any one but ourselves? I had hoped that that old doctrine of narrow and self-destroying selfishness was being supplanted in this new day by a consciousness that men helped themselves the most by helping others, too. Isolation in our politics, exclusion in our tariff, means that we will retain as a just penalty to our own littleness the surpluses which we might otherwise market to the peoples of the world and which, so long as they stay with us, destroy our own prosperity."
[i] Report of Committee on Industry and Trade (Balfour Committee), Vol. 1, p. 454.
[ii] Grotkopp, "Amerikas Schutzzoll Politik" (1929), p. 240.
[iii] The Milan correspondent of the London Times, however, reported in the issue of July 5, 1930: "It is generally stated that the new customs duties are the natural consequence of the increased United States duties affecting Italian exports to America."