Campaign Issue

It is no secret that an entire new House of Representatives and a third of the Senate will be elected in the fall of 1926. It is equally no secret that Democrats are laying as thorough plans as possible to capture that election.* Not the least part of the plan of campaign is to get one or more issues that will carry them to victory. In the last election they apparently learned that indiscriminate and ubiquitous opposition to anything that bears the label of an opposing party will produce burning issues.

Now the Democrats are busy preparing their issues. The first one apparently uncovered was the proposal that we should cut down the rate at which the U.S. public debt is being retired, thereby practically doubling the amount of tax reduction possible this year--turning a $300,000,000 reduction into $500,000,000 or $600,000,000.*

The second possible issue uncovered is the high tariff--an old issue but in a new guise. Congressman Cordell Hull, onetime Chairman of the Democratic National Committee, last week issued a statement, as a sort of trial balloon no doubt, linking the high tariff with failure to get 100 cents on a dollar in payment on War debts from Europe. His argument in substance: In settling the Italian Debt the U.S. was forced to agree to such cutting that the U.S. loses from $2,500,000,000 to $3,000,000,000/- The reason the Italian Debt was cut was that Italy could not pay more. Italy could not pay more because she has no gold to ship to this country and her payments must be made largely by credit established through the shipment of Italian goods to the U.S. But there is very little of such goods; the high tariff keeps them out.

Said Mr. Hull:

"Our existing high tariff law virtually eliminates the factor of payment in goods by Italy. The new policy which this settlement proposes, therefore, is that as an alternative of cutting our extortionate high tariff to a moderate extent or cutting our foreign debts to a correspondingly greater extent, we adopt the latter course. This policy would, for 62 years, penalize American taxpayers with continued high tariff taxes in the form of increased prices and also with the amount by which the Italian debt has been scaled."

The significance of this argument is not that the Democrats are likely to oppose the debt settlements, but that they will use the debt settlements as a text in talking about the tariff, thus preparing an issue for 1926.

As to the argument itself there is much truth in it. Italy would be better able to pay if she could export to us more citrous fruits than has been possible under the high tariff, more labor than under the present immigration laws, more wine than under the Volstead Act. How much more she could pay if these restrictions were removed is problematical. But if the restrictions were removed, loud would be the angry cries of the U.S. growers of citrous fruits, of U.S. labor, U.S. bootleggers. The question is the old one: "Do we want to be paid?"

* There are 40 Democrats out of 96 members of the Senate; 183 Democrats out of 435 members of the House.

*It is entirely possible that this proposal, broached several weeks ago (TIME, Nov. 2), may be revived when the tax bill reaches the floor of Congress if the Democratic strategists see hope in it.

/-Mr. HuII has juggled figures a bit. The total Italian Debt with accrued interest to date is less than $2,500,000,000. Discounting the future payments due from Italy to obtain their present value, one finds that the amount of the debt forgiven Italy amounts to about $1,500,000,000.