Reciprocity and International Tariff Action

January 27, 1932

Report Outline
Movement for Lowering of Obstructions to Trade
Tariff Policies and Tariff Systems
The United States and Tariff Reciprocity
The League of Nations and Tariff Modification
Democratic Plan for a World Conference

Movement for Lowering of Obstructions to Trade

Tarrif Interference with War Debt and Reparation Payments

The Final provision of the tariff bill passed by the House of Representatives January 9, 1932, and now under consideration by the Senate Finance Committee, requests the President to initiate a movement for a “permanent international economic conference” with a view to lowering excessive tariff duties and promoting friendly trade relations between nations. A section of the original bill, which was eliminated by the House Ways and Means Committee but which, it is believed, will be restored in the Senate, requested the President to negotiate reciprocal trade agreements with foreign countries under a policy of mutual tariff concessions.

Substantial alteration of the flexible tariff system would be effected by the pending bill. In view of that fact, it is considered probable that the measure, if approved by the Senate, will be vetoed by the President. A presidential veto could not be overridden in either house. While it is a virtual certainty that the current Democratic proposals will not become law during the present session of Congress, the advocacy of international tariff action by Democratic leaders at this time may be taken as an indication of their belief that, there is a growing sentiment in the United States for a world-wide lowering of trade barriers.

Economists have long argued that high tariffs would obstruct, if not render impossible, the full collection of war debts and reparations, and that greater freedom of international trade is essential to world economic recovery. Public opinion in the United States appears at this time to demand that there be no further concessions to foreign debtors, but there have been recent indications of a willingness on the part of certain supporters of the protective principle to sacrifice the war debts if they cannot be collected without reductions in American tariff rates. In a speech before the American Tariff League at New York, January 21, 1932, its president, W. L. Murno, said:

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