Voices for Veto

Protests against the Hawley-Smoot Tariff Bill banked higher at the White House last week. Requests for a veto continued to flow in. Henry Ford stayed overnight with President Hoover to repeat his belief that the bill was "an economic stupidity." Albert Henry Wiggin, head of the Chase National Bank of New York, conferred long and solemnly at and after luncheon. Many another tycoon flayed the measure in public or prepared to protest when (or if) the bill should come formally before the President.

During the week the Textile Converters Association reversed its traditional pro-tariff stand and asked for the bill's rejection. The National Cigar Leaf Tobacco Association did likewise. The American Importers & Exporters Association urged a veto on the ground that the new tariff rates (highest in U. S. history; an average of 41% ad valorem on all dutiable commodities or 20% above the present law) "will cause ill will and reprisals which will make it impossible for us to develop the export trade necessary to the continued prosperity of the U. S."

Open-Minded. So firm became the popular conviction that President Hoover would sign the bill because politically he could not afford to do otherwise that the White House took pains to emphasize that he was still "open-minded" and would "study the bill thoroughly" before acting upon it. That was to say, President Hoover would do no less on the Tariff Bill than he does on all legislation--refer it to the interested departments, in this case Treasury and Commerce, for technical opinions. If the President should choose to veto the bill, he would count on Secretaries Mellon and Lamont to supply him with expert reasons for so doing.

Never a Veto. Athwart the "open-mindedness" of the President and the public surge for a veto stood this large historical fact: in 140 years of U. S. tariff making no President has ever dared to veto a tariff bill. President Cleveland came closest to open disapproval when he allowed the Tariff Act of 1894 to become law without his signature.

Chorus of Dissent. Despite this historical precedent and veiled assurances that the President would flex out imperfections which even 'the Republican National Committee admitted were in the bill, a great new sector of U. S. industry called imperiously for a veto. Normal protestants against tariff upping are importers (i. e. department stores) who bear the brunt of higher rates, and political opponents who plead in the name of the ''consumer." Now the chorus of tariff dissent was swelled by a third and more potent group, composed of big industrialists who have saturated home markets with their production and require ever expanding foreign markets to absorb their high-speed manufactures. Seeing their business in the light of world economics (as taught by Secretary of Commerce Herbert Hoover), they feared their foreign customers would cease to sell over a higher tariff wall, would thereby suffer reduced income and buying power, would of necessity stop purchasing U. S. merchandise. If U. S. export trade drops, potent manufacturers envisage a corresponding drop in their production, their profits, their employed labor. Only about 6% of U. S. production is exported but to tycoons whose business has outgrown the domestic market that 6% represents the difference between good and bad times. The fact that U. S. foreign trade dropped $500,000,000 in the first three months of this year has filled many a U. S. manufacturer with serious forebodings.

Chief objector to the Hawley-Smoot bill was the motor industry whose enormous foreign trade speeds many a factory wheel. Alfred Pritchard Sloan Jr., General Motors president, summed up the industry's basic argument thus: "The economic position of the U. S. has completely changed during the past two decades. We cannot sell unless we buy. Additional restrictions in the way of raising the height of the tariff wall are bound to have an adverse influence on our domestic prosperity through reducing our ability to produce. . . . The failure of the tariff bill would have a helpful influence."

Alvan Macauley of Packard, Albert Russell Erskine of Studebaker and Charles W. Nash of Nash flayed the bill in chorus as "a great menace to our foreign trade."

Rubber. Harvey Samuel Firestone and James Dinsmore Tew (B. F. Goodrich Co.), as representatives of the rubber industry publicly prayed for the bill's defeat by Congress or President Hoover.

Edward A. Filene, Boston merchant, denounced the measure. Shipping men lamented the prospect of reduced foreign trade in their bottoms, spoke of upping ocean freight rates to offset their loss. Theodore Gary of Kansas City, whom Senator Moses appointed as Republican Senatorial campaign cash collector, declared the bill was "highly detrimental" and that U. S. industries would lose more than they would gain from it.

G. 0. P. Retort. In the House of Representatives Congressman Knutson of Minnesota, Republican whip, gave the standard G. 0. P. reply to these criticisms: "Big business wants free and unrestricted commerce between nations. They want to manufacture in the cheap markets and sell in our markets. General Motors owns and operates large automobile factories in Germany and to bring their products into the U. S. they must have low import duties."

Labor. The American Federation of Labor supports the Smoot-Hawley bill on the theory that it will keep out the products of cheap foreign labor. Matthew Woll, A. F. of L. vice president, bitterly attacked Henry Ford for his tariff opposition, citing the fact that the motorman had moved his tractor plant to Ireland, where he makes his machines at 60% of the U. S. cost and imported them to this country duty-free as agricultural implements. But labor was not unanimous. George L. Berry, president of the International Printing Pressmen's Union of North America, last week flayed the bill as "the most atrocious and indefensible tariff revision ever considered by Congress."

Reprisals. The threat of foreign tariff reprisals alarmed big exporting industrialists as much as the prospective disruption of the world trade cycle. Thirty nations have filed 161 specific protests against items in the Hawley-Smoot bill. Canada, best U. S. customer, has made a provisional upward revision of its tariff which would adversely affect 25% of the goods imported by the U. S. and give British imports a much higher preference rating. Cuba was moving in the same direction.

In Italy a boycott movement was started against U. S. cotton. Don Alejandro Padilla y Bell, Spanish Ambassador to the U. S., publicly complained that his country would be hardest hit by the new tariff, cited the fact that out of 81% exports to the U. S., the duty on 42 of them would be upped, including cork, olives, onions, almonds, peppers and imitation pearls. Swiss watchmakers posted throughout their country such notices as: "ONE FOR ALL. ALL FOR ONE. ... We ask all manufacturers, craftsmen, merchants and consumers to banish ... all merchandise of U. S. origin."

French Threat. Antitariff feeling against the U. S. ran particularly high in France. There U. S. Ambassador Walter Evans Edge who as a New Jersey Senator had consistently voted for all maximum duties, got a bitter taste of the foreign by-product of his party's tariff policy. Last week at a Chamber of Commerce dinner in the Roubaix-Tourcoing woolen district, Ambassador Edge heard this direct threat from a potent French speaker: "European nations stand together on one point--if the United States closes her markets, these countries will consider themselves justified in following the same steps." In reply the Ambassador reversed the usual G. O. P. argument that a high tariff produces a high living standard by declaring that the high cost of living necessitates a high tariff to preserve it.

"Unprofitable venture." High-tariff Republicans in Congress could see nothing but the self-interest of foreign producers in these threats of tariff reprisals. Chairman Hawley of the House Ways & Means Committee voiced this congressional complaisance as follows:

"The tariff as an American problem. . . This is the largest market in the world and it is a cash market. . . . The nations of the world of course desire to trade in this market to the fullest extent and of course would like to have our tariff barriers removed so that they could ship their goods made by low-priced labor to this country in enormous quantities. . . , In the long run they will find tariff reprisals an unprofitable venture."

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