25 OCTOBER 1930, Page 5

Quota or F

ood Taxes ?

Afil. BALDWIN'S declaration of Unionist policy last .111. week was followed by a pretty controversy as to whether he did or did not propose food taxes. It seemed to us at the time that he plainly contemplated them in certain circumstances, though he did not use the phrase " food taxes." He said that if a wheat Quota was inade- quate to satisfy the Dominions he would be willing to consider other means. He could have meant nothing but a duty upon wheat, and he has since confirmed this interpretation.

Lord Beaverbrook asks why Mr. Baldwin, if he contem- plated the necessity of food taxes, was not honest enough to say so. That is a not unexpected argument from a platform which is itself committed to food taxes, but in sober truth Mr. Baldwin said all that the situation required him to say. He hopes—and apparently au increasing number of Unionists are on his side—that a Quota will " do the trick " without calling in a tariff. And if the Quota should be proved satisfactory in the case of wheat it could, of course, be applied to several other necessaries, if not to all.

We shall not ourselves go so far as to say that a Quota would not increase the cost of wheat or any other necessary. We think that it would. But the increase might be very small, and we have always admitted that it would be justifiable to pay higher prices for particular things if certain benefits were obtained extending far beyond the pockets immediately affected. There is, for instance, the matter of national safety, which might depend in imaginable circumstances upon " an assured supply of necessaries from British and DoMinion farms. There is, again, the incalculable social good of preserving a healthy balance between the rural life andthc urban life. That is worth paying for. Yet another point is that if the Dominions are intent upon some Preferential trans- action between themselves and Great Britain—we here do not confine the word Preferential to tariff arrange- ments—an immediate loss through buying expensively what we might have bought cheaply may be more than compensated for by the mere fact of achieving an agree- ment. There arc great virtues in agreement. It would be a sorry conclusion to the Imperial Conference to send the representatives of the Dominions away disappointed and aggrieved. The reflection that we had kept down the price of bread or wool or meat, or whatever it might be, would be an insufficient consolation.

In choosing between the Quota and the tariff let us look at what the effect of a tariff on wheat would be. Most people who have been thinking out the fiscal problem have addressed themselves to this study, but we value more than any argument we have seen that which we read in the Morning Post of Friday, October 17th. The source of the argument gives it its peculiar value. The Morning Post assumes that the British farmer wants 50s. a quarter for his wheat instead of the 30s. a quarter which he gets. It then asks whether Lord Beaverbrook proposes a duty of 20s. a quarter. If he does he would be offering the Canadian farmer, who produces wheat very cheaply, a much higher bonus than is necessary. Probably, the Morning Post thinks, the Canadian farmer would be content with a Preference of 2s. a quarter. The British farmer produces say 12 per cent. or 15 per cent. of the wheat consumed here. Even if he could produce more he would perhaps produce 30 per cent. as a maximum. Does Lord Beaverbrook, then, propose a duty of 20s. on the whole importation in order to make sure of getting from the British farmer something between 15 per cent. and 30 per cent. of the total ?

By all means let us try the Quota first and go on to something else if it fails. All we can say in advance is that the Quota has great inherent advantages over the tariff. It would exclude automatically all the undesirable forms of import, and that cannot be said of a tariff. However high a tariff on foreign wheat might be it could not be high enough to exclude what was dumped as a matter of policy at less than the cost of production.