Finance—Public and- Private
European Trade Barriers.—A Remarkable Manifesto
BY ARTHUR W. KIDDY, DURING the past week there has appeared a very remark. able Manifesto in the shape of a plea for the removal of restrictions upon European trade. So. important, indeed, are the signatories to the Manifesto, that it may be well to say a word concerning some of them before dealing with the subject of the Manifesto itself. Practically every important .country in Europeand certainly the countries chiefly affected by the tariff barriers—are represented, while the signatories in the various, countries are thoroughly representative of the financial and business interests. Thus, in the case of Great Britain, the list of bankers includes the Governor of the Bank of England, the Chairmen of each of the " Big Five " banks ; Lord Revelstoke and Mr. Lionel N. de Rothschild ; while shipping is repre- sented by Lord Inchcape, and other names include Sir Hugh Bell, Sir Felix Schuster, Lord Weir, Mr. Alexander Robb and Sir Alexander Whyte. In the case of other countries such as Austria, Belgium, France, Germany, Holland, Italy, &c., the names are equally representative, while last, but by no means least, it has to be noted that the United States joins in the Manifesto with such names as Mr. J. P. Morgan, Mr. Thomas N. Perkins and others. It would be safe, therefore, to say that no more repre7 sentative or influential Manifesto signed by business men has ever appeared.
OBJECT OF THE MANIFESTO.
And what, it may be asked, is the cause of so many hank- ers and business men all over the world thus breaking the silence usually observed by them so far as public utterances on financial and economic subjects arc concerned ? The answer is given in the opening words of the very brief Manifesto in which the signatories express their desire as business men to draw attention to certain grave and disquieting conditions which, in their judgment, are retarding the return to prosperity. It will be noted, there- fore, that in all respects, the Manifesto is general. Each country has its individual difficulties to overcome, but it is felt that there is one common menace which has to be dealt with. That menace—again to use the words of the Manifesto—is " the extent to which tariff barriers, special licences and prohibitions since the War have been allowed to interfere with international trade, and to prevent it from flowing in its natural channels."
UNDESIRABLE BARRIERS.
The Manifesto then deals with the blow inflicted upon international trade by the break-up of great political unities in Europe. Across large areas in which the inhabitants have been allowed to exchange their products freely, a host of new frontiers were erected and guarded by customs barriers. To mark and defend these new frontiers in Europe, licences, tariffs and prohibitions were imposed with results disastrous to all concerned. Not only did certain States lose supplies of cheap food, and others supplies of cheap manufactures, but behind the customs barriers new local industries were started often with no real economic foundation, only, indeed, to be kept alive in the face of competition by raising the barriers ever higher and higher. The result has been disturbing to almost all countries. It has ministered to high prices and to cramped production, and also in many directions to currency depreciation. Up to a point, of course, international as well as local, competition In industry is the breath of life, but the City as a whole is undoubtedly in accord with this Manifesto in its assertion that too many. States in pursuit of false ideals of national interest have imperilled their own welfare, and have lost sight of the common interests of the world by basing their commercial relations on the economic folly which treats all trading as a form of war.
TRADE NOT WARFARE.
There can, the-signatories of- this Manifesto maintain, be no recovery in Europe till politieians in all territories, old and new, realize that:trade is hot_war, but a process of exchange ; that in time of peice our neighbours are our customers, and that their prosperity is a condition of our own well-being. Restricted imports involve restricted exports, and-mi nation -can afford to' Jose its export trade. Dependent as we all are upon imports and exports and upon the processes of international exchange, we cannot, say the signatories to this Manifesto, " view without grave, concern a policy which means the impoverishment of Europe. . . . We wish to place on record our con- viction that the establishment of economic freedom is the hest hope of restoring the commerce and the credit of the world."
- THE AMERICAN ATTITUDE.
Before offering one or two general comments represent- ing, I think, the general view of . business men, let me draw attention once. again to the fact that prominent bankers and liminess men in the United States have taken part in the moVenient. . If it iitrue, as undoubtedly it is, that high tariff walls have hampered trade during recent years between many . of the European States, what must be said of the attitude of the United States which as the world's, and especially Europe's, largest creditor, nevertheless takes the lead in making it difficult for the debtor countries to redeem their obligations through the export of goods and services ? Notwithstand- ing the fact that American trade and prosperity was increased during the War period, notwithstanding the fact that Europe's power to. manufacture was necessarily enfeebled for some years after the conflict, and in spite of the heavy debts which Europe had to repay to the States, America was one of the fist of the nations to raise still higher the tariff wall at a moment when the financial recuperation of Europe was necessary not only in the interests of that Continent but, rightly considered, in the interests of the whole world.
I need scarcely say that with the objects of the framers of this Manifesto the City and business men generally are entirely in accord. The practical point, however, which is eagerly discussed is whether the Manifesto is likely to achieve its object or not. Rightly or no, it is generally believed that it has been issued by way of preliminary to the much discussed International Economic Conference : in other words, it is, perhaps, in some respects, in the nature of a ballon d'essai and the manner of its reception by all the countries concerned may well affect the prospects. of the Conference itself. For it is very clear that any Economic Conference dealing with such matters as those outlined in the Manifesto must depend very largely for its success upon a spirit of amity between .the various nations having first been secured.
NOT FISCAL PROPAGANDA.
Notwithstanding the fact that this plea by bankers and business men is for the removal of restrictions upon European trade—in other words, for the removal in many cases of tariff barriers—I consider that it would be not only unfair but untrue to describe it in any sense of the word as a " Free Trade " Manifesto, though admittedly. its pleadings are all in that direction. I believe, however, this document has not been inspired by a consideration of -either Free Trade or Protectionist principles as they are ordinarily understood, but simply by a vivid realization of the actual facts as they have prevailed in Europe during the last few years. It has been due in many. respects to the worst forms of Protection having, beyond all; question, acted not to the detriment of one but of many countries, and though if such conditions were to be persisted in it is conceivable that a manufacturing country like Great Britain might be forced into measures of a retaliatory character, it is evidently considered that before any such poSsibility is contemplated, the better way, the, way which is more in harmony with the spirit of the -Leagtie of- Nations, and the way which is more in harmony with the ideals both of industrial 'and international peace, should first be striven for. And with this view and with these aims the City is entirely in accord.
HUMANITY AND COMMON SENSE.
It is, moreover, a policy in harmony with the lead taken by this country in rendering first aid to the necessi- tous countries of Europe immediately after the War. Nor must it be forgotten that in rendering this aid there has, especially in more recent years, been close-co- operation between Great Britain and the United States. In both of those countries it may be said that humani- tarian and common-sense views alike have inspired action. Recognizing the inability of some of the devasted countries to accomplish their own financial and economic redemption, the helping hand has been extended freely. It has, however, also been perceived that if such foes to civilization as Communism and Bolshevism were to be overcome it was supremely necessary that financial and industrial depression, with its accompaniment of un- employment, should give place to conditions of industrial activity and prosperity. It is, I am convinced, with this same desire that bankers and businessmen of all nations have decided that a duty rests upon them to give to all peoples and Governments a strong lead. In so doing they have rendered an international service.
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