23 JANUARY 1932, Page 13

Letters to the Editor

[In view of the length of many of the letters which we receive, we would remind correspondents that we often cannot give space for long letters and that short ones are generally read with more attention. The length which we consider most suitable is about that of one of our par agraphs on " News of the ]Veck."—Ed. SPECTATOR.]

FREE TRADE versus PROTECTION

[To the Editor of the SPECTATOR.] SIR,—A tariff that will not increase exports is of no use to Britain or to any other country under modern conditions of production. How, then, can a tariff increase exports ? Only by combining reciprocity with resistance. Tariffs are political weapons, a fact which must be grasped to enable us to hold firmly this nettle of trade warfare.

' To increase exports we must enlarge the area of open exchange. Unconditional free imports have obviously failed because they have lacked the offensive necessary. Ordinary retaliative tariffs have failed because they have always put a premium on the raising of other tariff walls higher. Mr. Runciman's statement that our duties are imposed upon goods, not on the countries from which the goods come, does not face facts, and obscures the issue, which is that tariffs are offensive and counter tariffs must measure exactly the degree of obstruction and penalize other States each according to its obstruction to our trade.

At the same time (and this is the saving clause of a tariff to increase exports), it must automatically respond to the lowering of the level of obstruction by any other State, so that if a State desires to enter our market more freely it can do so without negotiation by lowering or throwing down its own tariff wall. In this way only can be ensured trade reciprocity all over the world and a larger area of open exchange. In this way only can we reward our low tariff friends and discriminate rightly against our high-tariff enemies in the world trade war.

Every country should be given its trade obstruction index number, and our tariff should be based on the average level of that obstruction, everything coming from the State concerned paying that single rate of duty as a toll on its trade obstruction, the same being automatically revised upwards or downwards as the obstructing State changed its policy.

It must be acknowledged that unconditional free imports did give us the advantage of the best footing in the world so far as the cost of material and of living are concerned. Our people have rightly feared to lose that position. It is therefore imperative that any tariff we impose shall invite and repay reciprocity and so increase our exports to every country we