By the enactment of this measure, other countries were compelled to ship their agricultural products to Europe and accept time payments. This was done especially by Argentina as well as by ourselves, but we did not loan our own surplus of products, and that of Argentina as well.

The Emergency Tariff thus served a double purpose, it compelled other nations to ship their products to Europe and thus lend products to those countries, and it also reduced the world's indebtedness to us. Would Argentina have loaned its products to Germany if the Emergency Tariff had not been enacted?

PART II

POWERS CONferred on the President of the United STATES BY FORDNEY-MCCUMBER TARIFF

The Fordney-McCumber Act, approved Sept .21, 1922, is "to provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, and for other purposes."

Upon the President of the United States is conferred, in Title III of the Act in Section 315, the power to investigate "the differences in costs of production of articles wholly or in part the growth or product of the United States and of like or similar articles wholly or in part the growth or product of competing foreign countries" and if he "shall find it thereby shown that the duties fixed in this Act do not equalize the said differences in costs of production in the United States and the principal competing country he shall, by such investigation, ascertain said differences and determine and proclaim the changes in classifications or increases or decreases in any rate of duty provided in this Act shown by said ascertained differences in such costs of production necessary to equalize the same."

Recognition is accorded the Tariff Commission by Congress in regard to this power. The President may direct the United States Tariff Commission to investigate and prepare such reports as he may deem necessary, and no proclamation can be issued until an investigation and hearing has been concluded.30

30 United States Tariff Commission, 1922: Chairman, Thomas O. Marvin, Massachusetts. Vice-chairman, Thomas Walker Page. Commissioners: David J. Lewis, Maryland; William S. Culbertson, Kansas; Edward P. Costigan, Colorado; William Burgess, Pennsylvania. Secretary, John F. Bethune, Falls Church, Va.

A bill creating the United States Tariff Commission was approved September 8, 1916, and Professor Taussig of Harvard University was appointed its first Chairman by President Wilson. The law provides that power is conferred on the board to investigate tariff relations between the United States and foreign countries, commercial agreements, and economic alliances, etc., and to make reports as may be requested by Congress and the President. DISCRIMINATION AIMED AT AMERICAN PRODUCTS BY FOREIGN GOVERNMENTS

Foreign governments in many instances have discriminated against the United States either indirectly by allowing preferences to other countries, or directly, by granting other countries lower rates on products unquestionably a manufacture of the United States.

Great Britain grants reduced rates on products from parts of her Empire on currants, dried or preserved fruits, sugar, glucose, molasses, saccharin, spirits, motor cars, musical instruments, clocks, watches and cinematograph films, and sixty per cent of export rates on hides and skins from India, are remitted when hides are received at a British tannery.

The Dominions give preferences to the mother country and to each other. The Customs Unions of South Africa grant preferences to Great Britain while Australia has done so since 1907, even enacting, in 1920, a three schedule tariff in Great Britain's favor even though it retained some measure of protection for young industries.

New Zealand effects the same result by imposing surtaxes on goods exported from countries outside of the British Empire.

The granting of preferences to the mother countries by the colonies is not limited to those of the British Empire, since all the colonial powers receive this benefit, with the exception of Belgium and Holland.

Administration of the French Tariff results in discrimination against the United States, in fountain pens, canned salmon, fresh or refrigerated meat, petroleum, and also to many American products which reach France by way of other countries.

South American tariff measures are detrimental to American canned fruit, vegetables and preserves. Many parts of Africa ship only to English ports to the exclusion of the United States.

Italy, Austria-Hungary, Bulgaria, and Portugal discriminate against American cotton-seed oil.

Salvador favors French, German, Belgian and Italian products to the detriment of the United States. Hayti favors France and Germany in preference to the United States.31

THE OBJECT OF TARIFF BARGAINING IS TO INCREASE EXPORTS

In all matters of preference, the object of all of this tariff bargaining is to bring about a relation by which a country is able to increase its exports.

It is considered to be an advantage to us when a foreign country lowers its rates to such an extent that we can export to it. Logically, this really prevents our people from acquiring a useful commodity, besides which, with every export there is a corresponding depletion of our own resources in that we have used up our soil, lands, and, in the case of lumber, of our forests.

THE COLLAPSE OF MONEY MEDIUM SHOULD ACCRUE TO OUR BENEFIT

Our present "Money economy" signifies an economic order, based upon the exchange of goods through the medium of money, and operates so that money is placed against a commodity instead of a commodity being placed against a commodity.

At this moment, owing to a collapse of the money medium in Russia, it would be to our great advantage if that country were to purchase our wheat in exchange for its platinum or other natural resources. Our object should be to export to that country as little wheat as possible in exchange for its resources, with the result that we would retain a larger amount of our own commodities.

FORDNEY-MCCUMBER BILL A "MAGNA CHARTA" FOR AMERICAN STANDARD Of Living

The Fordney-McCumber Act is highly protective in principle and intent, and includes an element of American valuation.

31 See Pan-Pacific, March-April, 1921, p. 33.

"Tariff Preferences and Discriminations," Culbertson, W. S., United States Tariff Commission, pp. 39-59.

"American Foreign Trade Relations," Academy of Political Science, Vol. IX, No. 2.

American valuation" was the basis upon which the duties of the first Tariff Act of 1789 were levied. This plan was also adopted in 1842, but the Act was repealed and thus failed to go into effect in 1843, owing to the fear that it would be too expensive to put into practice at that critical time of the government finances.32

This present scheme is a partial revival of the basis of American valuation and means the foreign cost price plus the freight and insurance, of articles when sold or freely offered for sale in the usual wholesale quantities in the United States markets. However, when such value of imported merchandise cannot be satisfactorily ascertained by the appraising officers, then the value is reckoned from the value of the imported merchandise sold for use or consumption in the United States.

The tariff bill had been introduced into the House of Representatives on June 29, 1921, and is described by its framer, Hon. Joseph W. Fordney, of Michigan, as a "Magna Charta " for the perpetuation of American standards of living.33

By transferring one hundred and ten items to the dutiable list, out of the three hundred items on the free list of the Underwood Tariff, Hon. Joseph W. Fordney, of Michigan, on July 8, 1921, in the House, expressed his belief that " we are going to help maintain our standard of living and our scale of wages in the country.'

ADVANTAGES THAT MAY BE Derived froM THIS MEASURE

9934

During the discussions of the bill in the House of Representatives, Sherman E. Burroughs, of New Hampshire, on July 14, 1921, considered that its passage would prevent the foreigner from obtaining any advantage over the American producer owing to his cheaper production costs, and thus we may maintain American standards of living and the American scale of wages.

66

35

Expressing the viewpoint of the manufacturers in his advocacy of the pending tariff because of his fear that Germany will make sewing machines and ship them to the United States at a lower

32 See Tariff Acts of 1789-1909, p. 15, Act of July 4, House Document No. 671 61st Cong., 2nd Ses.

The Manufacturers Record, July 14, 1921.

33 See Congressional Record, 67th Cong., Vol. LXI, p. 3228.

34 Ibid., p. 3482.

35 Ibid., 1st Ses., p 3964.

cost than they can be manufactured here, Hon. Charles E. Fuller, of Illinois, on July 20, 1921, claims that the most important effect of a protective tariff is the benefit of the toiler, and adds: “Without protection the American standard of living and the American scale of wages cannot be maintained." 36

An editorial in the Outlook directly after the passage of the Fordney-McCumber Tariff Bill in the House of Representatives on July 21, 1921, gives an analysis of the measure, and among the benefits to be derived considers that "it tends to maintain steady wages and an American standard of living and thus to preserve the home market to labor." 37

SWEDEN ALARMED OVER THE POSSIBLE EFFECT ON ITS STEEL INDUSTRY

This tariff, like previous ones, elicited many representations from foreign governments.

It was claimed that the present tariff measure would work great injury to their industries and an indication of this is shown in the attitude of the Minister of Sweden on July 7, 1921, who requested Secretary Hughes to obtain information from the Ways and Means Committee relative to certain clauses of the present Tariff Bill (H. R. 7456). He seemed troubled over the fact that Swedish steel might be affected by an apparent differentiation between raw materials imported to the United States for manufacturing purposes, upon which American labor would be employed, and materials upon which there would be no necessity for this work. He stated that the steels imported from Sweden are usually in the raw, to be manufactured and finished in the United States into the form of ball-bearings, cutlery and other products, and one clause of the bill would seem to treat this steel as the finished product.

CHAMBER OF COMMERCE OF LYONS, FRANCE, DEPLORES THE AMERICAN VALUATION PLAN

The Chamber of Commerce of Lyons, France, on July 9, 1921, appealed to the French Government regarding the provisions of the new tariff. The protest particularly centered around the

36 See Congressional Record, 67th Cong.. Vol. LXI p. 4315 (Daily Record).

37 Outlook, August 10, 1921, p. 563; Lyman Abbott, editor.