Evening Star Newspaper, August 16, 1931, Page 25

NEW COOLING DEVICE MAY MEAN REVIVAL OF BUSINESS Held Likely to Influence Next 10 Years as Radio and Automobile Industries Have Done in Past. 'REVIVAL IN WORLD TRADE | HELD ONLY CURE OF CRISIS Loans, Short or Long Term,Must Be Paid in Goods, and Economists Show Neces- sity of Removing Political Barriers. Real Land of Destiny Latin America Is One of Mightiest Reservoirs of Wealth in the World Today. admit free or at & low rate of duty imports from the United States. When certain countries, including Colombia, Venezuela and Hayti, failed to meet our terms, we penalty duties on their s. Following the Dingley tariff act of 1897 the United | States threatened to impose a duty on | Brazillan coffee unless Brazil lowered |its duty on American flour. As & re- !sult an agreement was made whereby | Brazil lowered its tariff on our flour 20 BY RAYMOND LESLIE BUELL. URING the last month the bankers have been playing the leading role on the interna- tional stage. ‘Governments and industries have been ask- ing alms at the doorstep of high finance. ‘When a n'w loan or short-term credit 1s finally granted, the supplicant heaves a sight of relief as if his problem had at last been solved. In the long BY MARK SULLIVAN. | artificial cooling, and was theretore an VERYBODY knows that the A B | 2518 fuge from an otherwise ex- C, as well as the X ¥ Z, and | tFomely heated e . likewise the O P Q of next year's | presidential election is the state | of business. Republicans count the very days: Here it is August 16; 1 year 2 months 2 weeks and 4 days until the presideptial election. In that much . can business re- |18 in cover? Not recover entirely, you un-|Otherwise most trying in derstand. The Republicans, in _the Some of the New York business run, however, a policy of borrowing is no solution for the acute problems | confronting the world today. Sooner or later loans must be repaid; and this must be done with goods. . The funda- mental solution of the present world | erisis is a revival in international trade. For many years economists have preached the doctrine that this revival cannot take place until the present litical barriers to trade are reduced. n 1927 the World Economic Conference formally declared that “in view of the fact that harmful effects upon produc- tion and trade result from the high and constantly changing tariffis which are applied in many countries, and in view of the fact that tariffs, though within the sovereign jurisdiction of the separate states, are not a matter of ly domestic interest, but ‘reltlyl fluence the trade of the world s the time has come to put & stop on| increase in tariffs and to move in the | opposite direction.” | resolution has not been applied, | Nearly every nation in the | however. world has increased its tariff during the last three years. The tendency to | do so became particularly acute as a| result of the world depression, which | fi in the Fall of lP?l‘ Each state | attempted, . if unsuccessfully, to stave off this depression by heightenin, tariff walls. Follow! per cent below that imposed on flour from other countries. Upon several occasions European governments asked the benefitg of the tariff concessions made by the United States in these agreements, under the most-favored-nation clause in their commercial treaties with the United States, but we invariably refused to grant such requests, on the ground that reciprocal commercial concessions were not gratuitus privileges, but could be given only for a valuable consideration. Saw Gain in Bargaining. In other words, a European govern- ment could not claim the benefits of our reciprocity agreement with Brazil unless it made to us the same conces. slons that Brazil had made, and we served the right to refuse such conces sions if offered. In other words, again, the United States accepted the most- favored-nation clause only in a condi- tional form, in contrast fo the uncon- ditional policy followed by Europe. Ap- parently the United States believed it :‘:d m?re h‘:}:m "‘1:“ tariff bargaining an from the principle of non-dis- T i . n 1922, however, the policy of the United States underwent a change. The - Fordney-McCumber act of that year prohibited the principle of reci- procity, and subsequently the State De- partment deserted the conditional most- d | favored-nation clause in favor of the their duties on American goods during the last year. For- & time the League of Nations bravely to combat the pro- | tectionist movement upon an interna- tional scale. In February, 1930, it con- vened a conference, attended for the most part by only European states, for the purpose of adopting a tariff truce League conference failed to adopt the tariff truce. As a substitute it drew a year without first negotiating with other parties to the convention. In case negotiations falled to produce settlement, the convention as a whole could be denounced. Although two conferences were sub- sequently held at Geneva, in an at- tempt to put this limited agreement into force, it proved impossible to se- cure enough ratification to do so, and the efforts of the league to reduce tariffs by international agreement thus eame to an end. The League's experience seems to demonstrate that at present it is virtu- ally impossible to expect the 27 na- tions of Europe, not to mention the 50 or 60 states of the world, to arrive at any multilateral agreement providing | tariff reduction. In the first place, the economic interests of such a large regime of free trade, but T 8 ree ] FPrance not wish to do so, since this would mean the destruction of the ch peasant. Moreover, the reduction of tariffs and the growth of international trade means an increase in the economic dependence of one state upon another, and states which still live in fear of attack will not, if they d:n pflflb}:’:‘::id it, kbe’; come dependent upon marke! for vital economic needs. Such depend- | ence might mean defeat in time of war. | Until the political fears of nations are removed, universal tariff reduction seems out of the question. Reduction Movement Begun. ‘Nevertheless, as an outgrowth of the | League eff a_movement for tariff| reduction upon a limited scale is faking | place, applying only to those States willing to make mutual con ons. German toms this union may be dead, there are other | jects which .may soon be realized. Ru, in ¢ Summer of 1930, four | countries, each hav- ing an export surplus of grain, held| three conferences at which they pro- that the industrial countries of | , which are obliged to im gain, give s preference to graty, from | term Europe. | That is, if Prance, for example, should | charge a general duty of 20 per cent on | wheat it should charge only 10 per cent | on grain from the Balkans. This idea of Euopean preference has been in- corsed by several other international gatherings, including the international | wheat conference at Rome last May. In the following month what appears to be the first concrefe agreement em- bodying this prineiple was concluded between Rumania and Germany. In this treaty Germany reduced its duty on Rumanian grain roughly by half in return for similar tariff reductions on German exports by Rumania. It is significant that this agreement was discussed by one of the committees on European unlon, meeting at Geneva, to determine whether or not it would in- gj“re the general economic interests of rope. The committee decided in the negative and approved the treaty as the ing of what may become a gen- eral movement In fact, the fundamental basis of any plan for European union seems to be mutual tariff reduction in which the goods of European countries are given preferential treatment over goods from the United States and other non European countries. At present the extent to which ex- clusive tariff preferences may be granted is limited by what is calk the most-favored nation clause. A ni- tion acoepting this clause promises not to favor one nation more than another in its eommercial policy—that i State A grants a tariff reduction to State C benefit of that reduction must also be given to State B. ning with the famous Cobden 860 between England and favored nation clause opean eom- | mercial policy. Before the World War | atly , while | ineffective when nations | abrogated their commercial treaties to embark on “tariff wars.” Nevertheless | on the whole, it worked against tariff | | United ~ states | has many objectignable features. unconditional form. of notes of October swfiy and Brazil al procity agreement, while partm In an exchange 18, 1923, the United thelr recl- State De- Germany on December 8, 1923, which said: “Any advantage of whatsoever kind which either high contracting party may extend to any article, the growth. product or manufacture of any other foreign countries, shall simulta- neously Il;fl ;;{;,cnndlfionuly. ‘without W an out compensation, extended to the like lrtlckp.ethz ::’::wt?: product or manufacture of the other high contracting party.” Protectionist Sentiment Strong. ‘This adoption by the United States | of the unconditional most-favored.na- tion clause was partly due to the recog- nition that the policy of dllcflmlmtlgn is likely to cause international il will; but primarily to a desire to secure every advantage for American foreign trade without giving anything in re- turn. Protectionist sentiment in the Lm‘x:ieghielym following ( as since visibl; weakened) was so strong as to pm!Z hibit any derogation from a high tariff evene h': ‘;‘e!tm;nm:or eoncessions. At the sam ) sentiment e-rlun n!d our markets. TN , for example, France and Germany made a treaty provi for a reduction of 20 per cent in duties the United Sta could not claim the benefit of such a reduction for American the World War out maki any changes in its own rates, provided, of course, we have a commercial treaty containing the un- :ondmoml clause with the nations af- Europe Voices Objections. To many Europeans the most.fa- vored-nation clause, thus interpreted, The: point out that if this clause remains 1:'1 effect it will defeat or severely injure the efforts to develop free trade in Europe, to give preference to Balkan or Danublan wheat. For example, if a in conference should conclude an agreement granting a 20 per cent preference to such wheat, Argentina and the United States might claim the benefit of such reduction for their own | wheat under the unconditional clause. In practice, however, the State De- partment has experienced considerable difficulty in concluding commercial treaties accepting this new principle. By | July, 1931, the United States treaties providing for unconditional m vored-nation treatment with only 10 States, of which Germany was industrially the most important. We have temporary executive agreements, subject to termination at the discrim- ination of either party upon a few months’ notice with 15 other coun- tries, including Poland, Rumania and Spain. We have no kind of agreement, treaty or otherwise, embodying this new principle with Prance, the British Em- pire, Italy, Argentina or Japan. lIssue Acute In 1927. Most nations do not wish to accord the unconditiona! most-favored-nation clause to the United States so long as the United States maintains what they regard as an excessive tariff. This issue arose in rather acute form in 1927. In had | connection with its commercial treaty its | with Germany, Prance increased duties so that, for example, American machinery would have to pay duties four times as high as the same ma- chinery from Germany. Although the United States has no most-favored.na- tion treaty with France, it protested against the discriminatios Prance replied, however, that it would be a step backward to grant the United States most - favored - nation treatment without taking into account the “protectionism of some countries and the liberalism of others” Prance used almost the same arguments in this spute that the United States had used | in defending tariff bergaining between 1778 and 1923. The issue i5 between tariff discrimination and excessive tarief | walls. If present tendencies contnue it seems probable that European govern- ments will ask the United States to waive its rights under the most-fav- ored-nation clause, so that the Euro- pean countries may proceed to some form of mutual tariff reduction, such as envisaged in the plan for a United States of Europe racommended in a limited form by various agrarian conferences. The immediate result of any eystem of European preference may be to injure American foreign trade. To prevent such injury the American Government may attempt to stand on its rights under the most-favored-nation clause. It s doubtful, however, whether such & policy would be effective. Of the ten commercial treaties embodying this clause only six are with European countties, namely, Germany, Austria, Hungary, Esthonia, Latvia and Jugosl: via. The other 20 states are not bound It seems clear, therefore, that if the United-States is to t discrimina- its it must be pre- BY WALLACE THOMPSON. | EW markets! the world cries out today for new markets in which to sell its goods—new markets to revive trade and bring the nations out of the shadow of | depression into the sunlight of a more | prosperous day. But where can new' markets be found? for this new impetus to business? Look to the South, to the wide lands of Latin America. For here is one of the mightiest reservoirs of wealth in | human history—a reservoir that has lain virtually untouched for four cen- | turies. It is the last of the world's great treasure houses—a land with potentiali- ~Drawn for The Sunday Star by J. Scott Williams. in our present economic picture. This treasure house must now opened. For 300 years of Latin America’s life, Old World adventurers scraped up the accumulated gold and silver of millen- niums of Indian civilizations, opened the richest mines and carried the spices and “specialties” of a barbarous Amer- Where can we look ties that are the most reassuring factica to Europe. That Europe, bowed and | slipping in the misery of the poverty ilnhenud from the Dark Ages, raised its head, grew, prospered, became the | proud mistress of the world. Latin America, virtually alone economically, and under the crudest exploitation imaginable, rehabilitated Europe. And “(Continued on Fourth Page.) LATIN nant of Absolutism BY GASTON NERVAL. | NE more—and the count goes up o seven. Chile has gone the way of Bolivia, Peru, Argen- tina, Brazil, Guatemala and Panama. In the short period of 13 months seven of the young re- publies lying south of the Rio Grande have experienced a violent change of government. With the fall of President Tbanez of Chile one of the last remnants of abso- lytism and dictatorial rule in Latin America disappears. In little more than a year five of the Southern “strong men” who had announced the bank- ruptey of democratic government and imposed their personalistic and auto- cratic reigns upon the country have seen their fate change with dramatic suddenness. One by one in rapid succession the Latin American imitators of Mussolini kave made an ungraceful exit. The | Bolivians were the first to initiate the anti-personalistic movement by ousting President Siles when he planned to | petuate himself in power. Soon afte | ward the Peruvians followed this lead by | overthrowing one of the oldest and | strongest Latin American dictatorships, | that of Augusto B. Leguia Brazil and Panama Follow. Then the Argentines forced the resig- | nation of Irigoyen, their eccentric and | arbitrary president. President Luiz of | Brazil and President Arosemena of | Panama were next in the list to fall { although, more than personal dictators, they were the representatives of a clique | of politicians who had enthroned them- selves upon the governments of those | countries and wielded the scepter for rears |” While scarcely a year ago almost half of all the nations of Latin America were under the strong hand of some Kind of a personalistic, autocratic regime, today | there remain only two representatives | of force in the governments of the Latin American republics. It is not necessary to mention them. and it i« not venture- | some to say that one of them at least | will very soon follow the fate of his | colleagues | The Chilean revolution has all the characteristics of those which pre- vailed in Bolivia, Peru, Argentina, Bra- | 21, Panama, etc. It is only another chapter in that series of violent up- heavals which I described long ago as & movement of internal renovation in | Latin America | | What has just happened in Chile cor- roborates what I said several months ago when the first outbursts of violence broke out in Bolivia and Peru, and mean increased unemployment and would not give us any foreign markets in_return. Nevertheless, President Hoover could | 'N consistent with his former pos on the tariff and secure the end of | non-discrimination by returning to the reciprocity principle followed 80 many | years by the United Sta | AMERICA | OFF DICTATORIAL RULE Fall of Ibanez of Chile Marks Last Rem-; ward True Democratic Maturity. SHAKES | and First Step To- : domestic restlessness was being reported in Argentina, Brazil and other coun- tries. After the Chilean incidents, I need not add a word to the explanation I gave of the Latin American crisis when Bolivia. Peru and Argentina ousted their old executives. This seems to prove two things—first, that the movement was, in fact, a general one, (Continued on Fourth Page.) BALANCED BUDGET PLAN STARTLES BRITISH PUBLIC Heavy Odds Against Success Seen, Even Through Mass Hynotism by BY HAROLD E. SCARBOROUGH. ONDON.—Many Britons must have rubbed their eyes and wondered whether they had seen aright when they picked up their newspapers from the breakfast tables during the past few mornings. Readers of the ponderous | London ‘Times and the aristocratic | Where Business Is to ~!_3lame BY BRUCE BARTON WAS lunching with a group of high executives, and the discussion turned to economic problems. l Presently out came the usual line of comment: “Congress is a bunch of idiots. How can we hope for any sensible program when our laws are made by such men?” 1 was annoyed. All my business life I have listened to that sort of talk. 1 have known a good many Senators and Representatives. My judgment is that they are fairly representative of the Nation, neither better nor worse than the rest of us. They do not originate very much in the matter of na- tional policy and legislation. They merely record in laws the sentiment that grows up in the country around them. They respond to public opin- fon. And what does Big Business do to create and guide an in- telligent public opinion? Prac- tically nothing. Every young man who en- ters Big Business is told in ef- fect: “Now you have taken the veil. From now on you must not express any opinion on a controversial subject. You are no longer merely an individual; you are the sentative of a la body of stockholders who d diver- gent views on almost every- thing. You must not offend either our stockholders or our customers. Your duty is to and keep your mouth - Big bankers and corporation officials regard this a policy of “dignified silence.” As a mat- ter of fact, it is laziness and cowardice. My father was a distin- guished clezgyman, the spokes- man of a large congregation. He never hesitated to have views or to give them vigor- ous expression. Sometimes arishioners criticized him. e said to me once: “If I do not know better than the members of my congregation what sort of preaching my people should have, then T am {1:&‘ entitled to be their pas- r.” The president of a corpora- tion with world-wide interests ought to know more than his stockholders or his customers. He ought to know whether our present tariff policy is a help or a hindrance to our economic life, and have the courage to say so. He ought to know whether our war debts should or should not be revised, and ide his stockholders in their thinking. He ht to know what our ;‘;olley owld be toward Rus- a. Ours is & democracy. For a eneration or more we have n luring our best brains into business. The time is coming when those best brains must render some more positive service in the formation of a sound pub- back and gress. Press and Politicians. Morning Post had for once the ex- | perience of finding before them exactly | the same news as in the Daily Herald |and the News Chronicle—namely dis- played articles announcing in resound- tones that Premier MacDonald and other Labor leaders had decided to ‘balance next year's budget at all costs, and that they anticipated the collabora- tion yof the Liberal and Conservative parties in this endeavor. All these papers further added that it was anticipated the collaboration | would be forthcoming for all reasomable measures of reform; and the Evening Star was so far carried away by this | spizit of harmony that on Thursday it | proclaimed: “This is not the moment when any responsible man will seek to | advance the methods of Socialism or to insist upon a slowly arrived at tariff policy ‘of conservatism.” To this noble sentiment the only possible answer of the outside observer would consist in borrowing a line from American talkle dialogue—which, it is lamented, is becoming too popular here: “Oh, yeah?” That next year's budget, when - sented to the House og‘éommml‘% be found to balance is not to rea- sonable doubt. But that will be achieved through abandonment of the basic principles hitherto cher- ished by Liberal, Labor and Conserva- tive parties and that opposition will refrain from the use of weapons ab hitherto considered legitimate in rollucsl game argues a de- which, to n;‘::fl?deh dfluh':::!: 3 e as not | visible here since the wa: Odds Heavily Against It. Of course, not is impossible, and it may be that by the exercise of con- | sistent and unremitting mass hypnotism | British politiclans and the press may mobilize the nation to extricate the | Labor government from the pit which it has dug for itself. The view of the unprejudiced observer can only be tha are heavily against it. The whole development of the most recent “crisis” is full of interest for the student of social phenomena. Any one |reading the London newspapers this { week would infallibly be forced to the | conclusion that other countries had i g xfE f| culty, and the meekness of apprehended danger, don't ask 50 much as that. Their prayer is merely that business be on the up- grade, that the sap be rising in the business tree, enough for the voters to recognise it and feel cheerful—and vote for Mr. Hoover. It can happen. It has happened more | often than not. It is the exception for s business depression to last so long as three years. Since the preserit depres- sion began in October, 1929, it should be, according to the majority of prece- dents, well behind us by the time the election comes in November, 1932. The panic of 1907 was at its most acute stage in November, 1907: less than a| year later, by November, 1908, the panic had so far receded from men’s minds that the party in power, the Republic- ans, had no trouble in continuing to be the “ins.” In America, and increasingly under modern condftions, business con- ditions can reverse themselves very swiftly. Within the last 10 years the price of cotton once doubled within the space of*a year. So did the price of wheat within the same space of time. That sort of thing can happen again. New Things Over Horlzon. ‘Without J)l‘edl:un‘ (Heaven forbid) when this depression will end, one can call attention to & new thing which is just over the horizon ahead of us which is likely to figure largely in the next bulge of business activity, which may be to the next 10 years what the rise of the radio industry was to the past 10, or the automobile industry to the past 30. Pessimists frequently say there is nothing to take the place of the auto- mobile as a contributor to volume of business and employment in this coun- try since 1900, nor of the radio since 1920, and that therefore we cannot duplicate in the future the prosperity of the past. Such lack of faith is be- yond understanding. Here we live in | a generation which—since the birth of President Hoover in 1874, for example— has witnessed the coming of the tele- phone, electric light, electric power, the motion picture, the automobile, radio and the airplane. What sort of mind can it b: which denies the pos- sibility of future equivalents of these— or denies that America will again see the pulsing expansion of business that characterized the years between 1922 Cooling Device Perfected. There has been perfected a device— several different devices, indeed—for the cooling of houses, offices and other buildings. During the war, on & hot Washington day in,the Summer of said to the writer of this article: “This is all wrong. is intolerable! A man ought not to be at the mercy of 1s of cold in Winter. It ought to be, and it will be, that a man will turn a valve and cool his house in Summer, just the same as he turns on the steam heat to warm his house in Winter.” It seemed at the time a fantastic assertion. But it has come. In Wash- ington, New York and other cities, hun- dreds of thousands of patrons of motion picture theaters have had the experi- ence of sitting in delicious comfort in a room at a temperature in the agree- able 70s, while the street outside baked in the upper 90s. The writer of this article first had prolonged contact with the in June and July, 1928, at the Democratic National Convention in Houston, where one room, a restaurant in the basement of a new hotel, had it ettty practically unanimously published here —attracted less attention abroad than tgtn more or less unanimously of impractical. sudden zeal for reform? Nobody knows definitely. is in circulation; last decided to force the issue: that sity for the Bank of England accept- ing Pranco-American credit (the nego- tiations for which were curiously con- an ultimatum to the government; that MacDonald sua,w 1nlhh‘; l'lhhllflfln a fln“::- chance to mul e growing in- ‘;:enu of the Left Wing within the Labor party. Probably none of those is wholly true the state of British finances undoubt- edly were retailed to the cabinet. Equally frank admissions by even such conservative newspapers as London Times that national finances overhauling doubtless were not wi it effect. Finally the publication of national economy report a convenient peg on which to hang a reconsideration of the situation. Yet with the best will in the world it is not easy to see how this report furnishes the basis, hitherto lacking, on which~all the parties can combine in support of economy. Of the £99,- 000,000 cut in government expenditure which it recommended, £66,000,000 pounds were to have been accounted for by reducing the dole payments and reductions in teachers’ and policemen’s | salaries. There is nothing to indicate that Labor is any more willing to ac- | cept the dole reductions than it was { when on June 5 the Daily Herald, the “Reductions in the rates of benefit are simply unthinkable.” ‘The Conservative and Liberal parties | have even less reason to single out | teachers and policemen for wage cuts than has Labor. There remains minor departmental economies which any gov- ernment could enforce without m. bility of conversion of the loan would save 20,000,- ~| 000 pounds annually in the interest charges. Liberal Press Asks Bold Plan. committee’s economy report was wb-l lished. be “This report—contrary to statements had the earlier developments, and was | passed in England ss being desirable but | ‘What then cause the Labor cabinet's or wholly false. Frank opinions as to | most of the remaining £33,000,000 by | party's official organ declared flatly: | men | who served the Government the | war and made the trip between New :n:w::mr;‘uml times & week |« e eir lives by the X | Now, with those znb’mww | running, an agreeable use of a hot on the Atlantic seaboard would be just to ride back and forth continu- ously. Ultimately every train in country will be -unmr\y equipped, ible. } similarly made | Winter transition that took to 50 years ago from the | fed stove in the corner steam heat. Many younger than President 3 stoves with isinglass panes in the | into which the brakeman from | time fed coal from a hod behind | stove. The common result | those in one end of the car | tressed by too much heat, even mare | than those in the other end were dis- | tressed by too little. | Does any stove-heated ecar still run m"hm in t‘l;e United | haos on some little branch line some- | where? 1f they are all gone, where did the fire die out the toamm hast i Erasted o steam for ited, or or hot water heat, who never i FEER flerce clanging with early devices, steam, ing, crept into and ex iron pipes. ! icial will | the same way as steam rapidly. For under such l::;onuom a much faster time. It will get under way quietly, before we realize if E : i i £ 4 % g 8 5 i i i 1918, an able engineer, since dead, | areas. wiped his face of dripping sweat, and | heat in Summer any more than he | innovation, ernment would decree, within five years all rooms in buildings and hotels and uipped for artificial The usual crop of rumors| ang that Snowden lt! British bankers alarmed by the neces- |y, cealed from the British public) issued | g, plo; of iron nnd, all other needed terials, the owners of them some one to buy. banks, is the the operation. not done?” ‘The every family has an and some are mhmbylbtm clency of a two-car garage. |Reich Money Crisis No Bother to Travel BERLIN.—The temporary shortage of | currency in Germany, which has led to ‘Whether or not he receives the Cofi- | countries