Discrimination

Tariff Law. A staggering shock jarred the nerves of U. S. businessmen in Paris: the French government published the full text of its new general tariff law, wherein it was found that $80,000,000 worth of goods sold by the U. S. in France was subject to a maximum duty ranging from 100% to 13% higher than formerly.

Protest. At once there was a mighty shout and a stampede for the U. S. Embassy. Some businessmen laid the French action to a desire to secure the upper hand at the negotiations for a treaty of commerce and amity with the U. S., due to take place in Paris on or about Oct. 15.-- Others saw in it a move to force the hand of the U. S. in regard to paring down the French debt. An official protest was lodged by the U. S. through the Paris Embassy. The French promised to consider the matter. Busy businessmen doubted that anything would be done; that France would ever give up such a good advantage in the prospective commercial parley.

France-German Treaty. The commercial accord signed recently with Germany (TIME, Aug. 29) was an- other fly in U. S. Parisians' ointment. In it Germany was accorded most-favored national treatment in regard to all but specified products, which means that she enjoys the minimum tariff rates accorded to countries having this class of treaty. All countries outside this category must pay duty in conformity with the new law. U. S. businessmen, petulant, were in-clined to see deliberate discrimination in the new tariff against them in favor of the Reich.

The New Duties. Typical of the increases are the following: magnetos, which paid seven francs a kilogram, are now assessed 80 francs a kilogram -- increase 1,100%; fountain pens, admitted on a tariff of five francs a pen, must pay 80% on their value; electrical equipment for automobiles must meet a levy increased by 800%; magneto breaker points and distributors, 1,300% increase; spark plugs, 800% increase. It is to be noted that all these articles are manufactured by Germany.

Fordney-McCumber Tariff. Typical of U. S. tariff rates on French exports are works of art (under 100 years old), 20% ad valorem (that is, upon the U. S. valuation), silk wearing apparel, average of 60%; walnuts (France exported $4,861,000 worth to the U. S. last year) 4-c- per pound unshelled, 12-c- shelled; precious and semiprecious stones (not including pearls), 10% ad valerem on uncut stones; perfumes containing alcohol 75% ad valorem plus 40-c- a pound; perfumes not containing alcohol 75% ad valorem; soaps and soap preparations from 15% to 30% ad valorem. These are the chief French exports to the U. S.

Trade. Trade between the two countries last year:

U. S. to France $276,274,108

France to U. S $152,056,964

Balance in favor of U. S $124,217,204

Proposed Treaty. It is argued that France will seek in the proposed new treaty to secure better terms for her luxury trade--per-fumes, toilet wares, gems, fake and real. In other words, what she is trying to force is the acceptance of the principle of reciprocity. If the U. S. refuses to lower its tariffs, the French rates will stand. The French rates now roughly approximate, on an ad valorem basis, those levied by the U. S. "Cut your tariffs and we will cut ours," is virtually the French slogan. However, the U. S. tariff law was expressly designed to guard against reciprocity and its provisions are not capable of modification without the consent of Congress in the form of a new law. And this appears to be most unlikely, for Congressmen are mindful that France is the only country in Europe that has not funded her past-due and legitimate debt.

U. S. Criticism. U. S. businessmen in France have hitherto been trading on a 60% average tariff basis. All were convinced that the same arrangement would be carried on under the new law. Why, no one could say. But U. S. businessmen were solid and emphatic in declaring that the least the French could have done was to continue the old arrangement pending the conclusion of the projected commercial pact between the two countries.

Significance. The picture is clear enough: two nations glaring at each other over the tops of their high tariff walls. There is no dispute as to the right of France to erect a tariff wall as high as that of the U. S., or even higher. The problem is one of expediency. The U. S. sends many things to France that, on account of superior production facilities, cannot be duplicated so cheaply in Europe. When there is no intent to protect home industry, if the policy of protection must indeed be pursued, it would seem a signal lack of judgment to discriminate against U. S. goods in order to favor some other nation.

However, U. S. businessmen cannot justly complain if they are hard hit by methods obviously modeled on those of the U. S. itself. Frenchmen doing business in the U. S. have for years been in some-what the same predicament that U. S. businessmen in France now find themselves.

The signs were, however, that the French government will order a stay of the new law so far as the U. S. is concerned and trade will be continued on the new minimum tariff basis, which means an average increase of 40% over the old average of 60%, until either a treaty of commerce is signed or the negotiations break down.

*The draft of a proposed treaty of commerce and amity was this week formally presented at the French Foreign Office by Sheldon Whitehouse, charge d'affaires, and with it a formal request that negotiations commence immediately.