The League of Nations
New Movements Towards Economic Peace
THE present League of Nations Assembly, in its opening stages at any rate, differs from its predecessors in this, that whereas normally the early speeches range over every detail of the League's manifold activities, this year, without any preconcerted arrangement, a striking concentration of atten- tion on three or four main topics has been manifest.
TARIFFS.
One of the most important of these is the tariff problem. The note was set in this field by the British Prime Minister who, insisting that the Assembly must face the question of tariffs, declared that " every effort to prevent political nationalism 'from being the cause of economic obstruction and to make it an instrument of economic co-operation will receive the support of Great Britain." The story was taken up by M. Hymans, the Foreign Minister of Free Trade Belgium. He had been studying Sir Clive Morrison Bell's tariff map and was at once impressed and depressed by the facts which it revealed. He had been recalling the declaration of the Economic Conference of 1927 that the time had come to put an end to the increase in tariffs and to move in the opposite direction, and he found a lamentable reluctance to put this salutary doctrine into practice. It should be possible now, M. Hymans suggested, to give the agreement reached in principle the force of a contractual obligation.
M. Briand was of the same mind. In his most notable speech, perhaps the finest he has ever delivered in the Assembly, he accepted everything which his Belgian colleague had proposed, but gave it a special application by linking it with another project of which more will be heard, his plan for a closer association between European States. But funda- mentally he was with M. Hymans, and he insisted pertinently that while the tariff technicians must be heard with the respect which their expert knowledge demands, the problem must find its solution in the political field rather than the economic, and he called on the League to grasp the nettle firmly, not with the hesitations that its capacity to cause trouble might be in danger of inspiring.
Likewise Dr. Stresemann. Likewise Mr. William Graham. Likewise several other speakers from different countries. The suggestions they had to offer varied, but the gist of all was that the League should take up the problem of tariffs. The onslaught on tariffs may, indeed, be the chief task of the League, apart from disarmament, for many years to come. It will certainly be among the most delicate. There is even a certain danger in the insistence of the popular demand for a lowering of tariff barriers, necessary and salutary though that demand is, for it may suggest to some who have studied the problem only superficially, or not at all, that the way to lower tariff barriers is simply to lower them.
A COMPLEX PROBLEM.
The problem, unfortunately, is more complex than that. The League has, in fact, been tackling it sectionally for years past. It has, for example, negotiated a convention whereby States agree to abandon those absolute prohibitions on exports and imports which are one shade worse even than high tariffs. But the convention has not been ratified by a sufficient number of States to bring it into effect, and unless its various signatories give it the necessary official endorse- ment it may turn out very nearly a dead letter. Pursuing other methods, again, the League has succeeded in establishing, not merely in principle but in practice, the idea of a fixed maximum tariff (in gold francs) for certain particular articles, with a pledge by the Governments that that maximum shall never be exceeded. The principle has only been applied so far to the not unimportant commodities of skins and bones, but there is no reason why other articles or classes of articles should not be dealt with on the same basis.
But all this is slow work. Something more might no doubt be effected in the direction of limitation, though not neces- sarily of reduction, by adopting M. Hymans' suggestion, turned into a definite proposal by Mr. William Graham, for a convention binding its signatories to raise none of their tariffs above the existing level for a period of years. There is nothing essentially quixotic about that. A tariff holiday is as possible as a naval holiday. The difficulties, nevertheless, are great. in the economic field, as in the naval, a maximum standard may easily become a minimum, and low-tariff countries may reasonably complain that while they are being restricted to their present low level their commercial com- petitors are asked to do no more than refrain from exceeding the high tariffs by which they are protecting their producers to-day. But if these difficulties are considerable they are not insurmountable and it may well be that in countries where the Government is strong enough to resist interested pressure the convention might find a favourable reception. In that case Sir Clive Morrison Bell would have to raise none of his walls, though on the other hand there is no reason for supposing he would have to lower any.
THE TECHNICAL APPROACH.
There are other difficulties that have to be faced, even though some of them seem a little technical. State A has a most- favoured-nation treaty with State B. State B, by a self- denying ordinance, signs such a convention as that on skins and bones, binding itself to keep its tariff on those articles to a limited figure. Is State A, while refusing to sign the convention and therefore keeping its hands free, to be entitled to share the benefits of State B's lowered tariffs, or can the low rate be restricted to mutual commerce between signatories of the convention, most-favoured-nation treaties notwith- standing ? These are points that have to be settled, but will not be easily settled. And their existence goes far towards explaining why the League's progress towards tariff reduction is as slow as it is. Agreements between pairs of States are more hopeful, and it is in this direction that most progress has been made since the Economic Conference. Another method, again, which the League is employing without any very decisive results so far, is to take a special com- modity and endeavour to secure its free flow between producers and consumers without violent fluctuations in price and without suffering the disorganization produced by the erection of tariff barriers against it. Coal and sugar are conspicuous among the commodities the League's Econ- omic Committee has endeavoured to handle in this way.
Then, of course, there is what has been a little prematurely described as the 'United States of Europe—the proposal which M. Briand very tentatively outNned before the League Assembly, and enlarged on in more detail to the heads of the national Delegations a few days later. But the moment the project is studied the difficulties become apparent. M. Briand himself fully realizes this, but he believes they can be surmounted. It is necessary to hope, and permissible to believe, that in a measure they can. But they are formidable none the less. The conflict of interests between predomin- antly agricultural and predominantly industrial States would not die away at the sound of the magic word " federation." And even apart from that, if even two or three States combined to put a tariff barrier round themselves instead of a series of tariff barriers across themselves, serious questions would inevitably arise as to how the duties levied at the frontiers of one country on goods that might be going anywhere within the frontiers of the others should be distributed.
If, therefore, the need for a solution of the tariff problem is urgent the difficulties of reaching that solution are great. Dr. Stresemann drew quite legitimate lessons from the beneficial economic effects of the unification of Italy and of the German Reich, but the very fact that those unions were primarily political, and that their economic effects were only secondary consequences, is a good reason why the moral should only be applied with large reservations when the economic unity of Europe is in question. Europe is not prepared for political unity, or anything approaching it, yet. The problem of the economic condition of Europe is not a subject on which most Foreign Ministers can speak with expert knowledge. Ministers of Commerce, on the other hand, can or should. It is satisfactory, therefore, to find men like M. Loucheur and Mr. Graham in their places in the League Assembly Hall, and if they maintain in the economic sphere anything like the contacts which Foreign Ministers maintain in the political, the first condition for the ultimate solution of the problem will have been fulfilled.
Youn GENEVA CORRESPONDENT.
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