Consumers' Deal

Biggest day in the life of Cordell Hull since he became Secretary of State was the day last week when he sat down at Franklin Roosevelt's desk to put his name on a reciprocal trade treaty with Canada. By that act he served one of his most profound convictions. Nothing has ever shaken Mr. Hull's faith in the venerable Democratic doctrine of low tariff. To him a tariff fence erected to prevent men trading with other men across a man-made international boundary line is no less an economic crime than any law passed to forbid men from trading with others across a county line, across a street, across a counter.

In high but very courteous good humor, he bore the recriminations which were hurled at him and his treaty. For although the treaty does not go into force until Jan. 1, although its terms were kept secret for 48 hours (to allow for their transmission and simultaneous release in Ottawa) the howls of aggrieved lobbyists had already begun a serenade in Washington. Whether there had been some leak or whether they knew that tariff cuts were due them, the industries affected began to squeal. Lumbermen protested that they were being "sold down the river," dairymen that it would be a crime to spoil their "scientific" tariff. Cattlemen, Maine men (potatoes), maple syrup men joined in the chorus.

Knowing that, no matter how relieved these choristers might be at the mildness of the treaty's terms, their howls would increase as a matter of policy, Mr. Hull, the President and Secretary Wallace sat down on a Sunday afternoon in the State dining room to convince newshawks how great would be the benefits, how little the pain of the operation.

Canadian Concessions. From Canada, Bargainer Hull had got special reductions or abolition of duties on 180 items of Canadian imports from the U. S. In addition he had got most-favored nation status, which the U. S. did not enjoy before. This not only enables foreign goods en route to Canada to be shipped without extra duty through U. S. ports. It also saves U. S. salesmen from paying duty on samples they carry into Canada. It also means that U. S. goods will pay as low rates of duty as the goods of any other nation (except British possessions) increasing the number of tariff reductions to 767.

Most important tariff cuts by Canada included halving the duty on agricultural machinery, reductions of 25% to 80% on other machinery, putting all tractors on the free list, 25% to 50% reduction for meat, duty free oranges during four months (January through April), half off for grapefruit, one-eighth to one-quarter off the automobile tariff, similar cuts on electric refrigerators, washing machines, radios and abolition of the duty on magazines.* Furthermore Canada promised to keep U. S. raw cotton on her free list. Duty free likewise will be soya beans, bristles, eggplant, artichokes, horseradish and okra, hop poles and railway ties, tourist literature, zinc dust, Mexican saddle trees. Duties will be lower on a multitude of off-season vegetables, on regalia and badges, on albumenized paper, peaviners, wire (single and several), pruning hooks, cantaloupes, dynamos, surgical dressings, sanitary napkins and abdominal supports.

Of equal importance with all this was a formal agreement by Canada not to use certain powers under her tariff laws to value imported goods at arbitrarily high prices, a practice that has done as much as high tariffs to discourage U. S. trade. Finally the Mackenzie King Government promised to sponsor a bill in the Canadian Parliament to permit Canadian tourists in the U. S. to take home duty free $100 worth of U. S. goods.

U. S. Concessions. The tariff concessions given by the U. S. to Canada affect 53 items. Chief are: one-third to one-half off the duty on cattle, a reduction limited however to 155,799 heavy beef cattle, 51,933 calves less than 175 lb. each, and 20,000 dairy cattle per year; a 20% to 40% cut for 750,000 bu. a year of seed potatoes; 43% off for 1,500,000 gal. a year of cream; half off on halibut; $2.50 instead of $5 per gallon on whiskey aged four years or more in the wood; half off on lumber with an annual limitation to 250,000,000 board feet on Douglas fir and western hemlock. In addition, the U. S. agreed to keep on the free list wood pulp and newsprint, crude asbestos, wood shingles (with limitations), lobsters, telegraph poles, undressed mink, beaver, muskrat and wolf skins, nickel ore, cobalt and quahaugs. Other items on which the U. S. duty was reduced: electric cooking stoves, lacrosse sticks, swordfish (if not frozen), eels, chubs, saugers and tullibees, pipe organs for churches, ice skates, alewives in bulk, rutabagas and polymerized or unpolymerized vinyl acetate.

Who Won? Prime Minister King and Secretary Hull each looked as if he had swallowed a canary as each tried to keep from appearing too pleased when the other was around. For each thought he had got the better of the bargain, and each had reason for thinking so. Mr. King could say with truth that his concessions had amounted to little but a reduction of Canadian tariffs to the level they were at in 1929.

Secretary Hull could chuckle to himself that a good many of his concessions did no more than restore the pre-Hoover tariff, that many (notably lumber, cattle and potatoes) had been so limited by quotas to a tiny fraction of U. S. consumption, that they would have little if any unsettling influences. Moreover the articles which the U. S. agreed to keep on the free list included newsprint (on which the U. S. Press would never let a tariff be imposed) and a number of things of which the U. S. has far from enough (e. g. asbestos, cobalt, lobsters). In return he had obtained a better market for U. S. machinery of many kinds, for several fruits and vegetables and got rid of a number of annoying hindrances to U. S. marketing in Canada.

U. S. farmers in general might carp a little that they had received few substantial gains but such gains were hardly to be expected in a treaty with an agricultural country. But Florida fruit growers, who have threatened to attack the reciprocal tariff law in the courts because of fruits and vegetables admitted under the recent trade treaty with Cuba, may now think twice since the new treaty betters their citrus fruit market in Canada.

A few U. S. manufacturers (aside from whiskey makers, who will suffer a severe tariff cut, but some of whom own interests in Canadian distilleries) may not like the treaty since it will admit U. S. goods to compete with their branch factories in Canada, but many more will have a better market for their goods, especially machinery and electrical devices, and many, too, will obtain cheaper raw materials. Labor in their industries will probably find more employment. The New Deal on its political ledger can balance off the peeve of lumbermen, cattlemen, dairymen and others, as well as Republican outcrys against tariff reduction, by the probability that the treaty will help re-employment in more industries than it hurts. The treaty is also one answer to Republican protests that all the New Deal has done is raise prices to the consumer.

For the consumer in both the U. S. and Canada will be the chief beneficiary. In fact some of the "concessions" made by both sides were not concessions at all but voluntary reductions. Mr. King put forward tariff reductions on automobiles and radios because they would be popular with his constituents. And Mr. Hull can expect U. S. drinkers, as they down a drink of aged whiskey from a bottle that costs about 85-c- less, to toast: "Here's to tariff reciprocity!"

*Immediate result: subscription price of TIME in Canada is reduced as of Nov. 22 from $8 to $5 a year (same as in the U. S., 50-c- lower than the pre-tariff Canadian rate). The treaty was published too late to change the Canadian rates shown on TIME'S Christmas gift subscription blanks but these rates will be the same as for the U. S., $5 for the first, $3.50 for each additional subscription. Furthermore, Canadian subscriptions entered at the old rate will be proportionately extended to compensate for the price reduction, and when the treaty goes into effect the newsstand price of TIME in Canada will revert to 15-c-. Reason: Death of a tariff.

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