Tar if Lesson

On hearing that one hundred potent international bankers had signed a manifesto urging European nations to let down their tariff barriers (see p. 14), Secretary of the Treasury Andrew W. Mellon took the U. S. upon his venerable knee last week and told it how it was making both itself and other nations prosperous with its protective tariff.

Shrewd Mr. Mellon's lesson in rudimentary protectionists' economics ran somewhat as follows: "Now, U. S., do you know that you only make up a little over 6% of the world's population, and yet you are so industrious that you consume between 37% and 75% of the world's production of coal, iron, copper, rubber, petroleum and many another commodity? The reason for this phenomenon is simple. Your industries which manufacture competitive products are protected by the tariff. Hence your labor is kept busy, your standard of living is high and you can buy from other countries."

Then, as all good teachers do, Mr. Mellon found a concrete ex- ample--one of his own corporations. He was not afraid of being called a "trust king" when he could say:

"As an example I might cite the case of the Aluminum Company of America. The raw product of aluminum is bauxite, deposits of which occur in the United States, in British Guiana and in many other countries of the world. The principal cost of the manufacture of aluminum is electric power and labor. The cheapest power in the world is hydroelectric; the cheapest labor is foreign. The Aluminum Company has many power prop- erties in the United States, but others in foreign countries, and the largest power of all is now being developed in Canada. From its plants in the United States the American market is supplied; from its plants abroad the foreign market is supplied. If the present tariff on aluminum is maintained, developments for the expansion of domestic business will be made in the United States. If the tariff be removed, these developments will occur in foreign countries and part of the American market be supplied from abroad. The effect of removing the tariff on aluminum would not in the least be to hurt the Aluminum Company but to deprive the United States of the benefit of enlarged manufactory here. Less capital will be invested here and less labor employed."