Combining for the Import Trade

The next general move likely to be attempted with Congressional sanction for assisting foreign trade is protection for combinations of importers. The high price level in the United States, in relation to the low cost of production in Germany and other European countries, has enabled a flood of imports to enter the United States despite the high wall erected by the Fordney tariff. Experience has shown that the domestic prosperity which a high tariff begets tends to defeat itself by bringing the home price level up to a point where foreign goods can pay the tariff and still come in and compete.

This was not a factor at the time of the McKinley tariff because the labor unions were not at that time strong enough to boost wages up in harmony with increasing price levels. Now that wages follow prices upward with every incline, American manufacturers find themselves in relatively the same position of competition with foreign goods that they were before. They are selling at high prices—high enough so that foreign goods can afford to compete—but their costs of production have been pushed up by wage increases to a point where the margin the tariff provided had been to a large extent wiped out.

It is inevitable that some move will be made to provide a new method of keeping American manufacturers in possession of the advantage of selling on their home grounds. In all probability that method will consist of the legalization of import combinations.

When the Webb-Pomerene Act was pending, particular care was taken to prevent it from impinging on the restraint of the Sherman anti-trust law. It was feared that to legalize combinations in the export trade could be to invite combinations in the domestic trade. The act, therefore, specifically restricted Webb Law corporations to sales, overseas.

The rubber industry awakened last Fall to a realization that Great Britain, by imposing an export tax and an export restriction on crude rubber, was adding from $100,000,000 to $200,000,000 a year to the American rubber bill. It sought the aid of Congress and the Executive establishment in meeting this discrimination. The inquiry developed into the whole field of unique raw materials controlled by foreign nations and it was found that the United States was dependent upon foreign countries for a number of essential commodities. All the cork was controlled by Spain just as nearly all the rubber was controlled by England. Japan controlled the camphor, Peru tine quinine, Mexico the sisal, India the Jute, Chile the nitrates, etc.

It was felt th