2 MARCH 1929, Page 2

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The storm that has blown up between France and Spain concerns the compensation claimed by French firms which have suffered by the Spanish Oil Monopoly: When the claims of the Shell group were settled a few weeks ago, the sum allowed—a little under' £1,200,000 did not include goodwill. A clause of the settlement, however, contemplated a revision . in the event of other claimants. securing better terms. Conse- quently, the Spanish Government has jibbed at the con- sideration of goodwill for" which all along French coni- menial interests—including agents for American firms— have been pressing. Now the French Government has stepped in and announced economic reprisals, the first of which appears to be the levy of full fees for identity cards on all Spanish citizens in France. This breach of the Convention of 1862 was decided upon, it seems, after the Spanish authorities had rejected arbitration. The latter allege, however, that Spain has specific exemption by Treaty "for cases of vital national importance." The whole incident illustrates the fallacy:and inherent dangers of economic. nationalism. Trade should be, as the Prime Minister reMinded -us the other day,' a potent agent of peace ; but on one conditiod---•namely, that it is freed from Government controversies. This is, in the last analysis, the case against all forms of Protection. It is a case which the late Lord Cromer, who had eXplored most of the causes of international friction, was never tired of stating: