Asking "Must we have another lesson in the Interdependence of nations, must we go through another depression...before our business leaders realize that we cannot add to the world's disaster without including Injury upon ourselves?", S. H. Slichter, professor of Business Economics, presents in the latest issue of "Current History" a point of view on the tariff question opposed to that of Dean W. B. Donham '08, and of Senator Reed smooth.

"When the Wiggin Committee of the Rank for International Settlements on August 19 told the world that tariffs should be lowered, it was simply repeating advice which had been given many lines during recent years. On April 21, 1931, a similar recommendation was made by General W. W. Atterbury, the learner Republican National Committee man from the protections stronghold of Pennsylvania. But the advice has been little heeded, in part because the man in the street does not clearly understand how and why rising tariffs have been undermining his prosperity.

German Harbors Congested

"Tariffs, of course, are not the only reason why a large part of the world during the last two years was driven off the gold standard, why the harbors of Germany were congested during the Summer of 1931 with vessels that could not be unloaded because there was no means of payment or why wheat sold for the lowest price in several centuries. Nevertheless, the trade barriers that have been raised during recent years have had much to do with all these matters.

Must Reduce Tariffs

"They have been a major influence in making the world vulnerable to depression and in intensifying the slump when it came. Prosperity, it is safe to say, will not be established on a reasonably solid foundation until there have been substantial reductions in many tariffs.

Ralse Barriers Rapidly

"In few periods in the world's history were tariff barriers raised more rapidly than in the years immediately preceding the present depression. Between 1925 and 1929, there were thirty-three general revisions or substantial tariff changes, nearly all increases, among the twenty-six countries of Europe, and seventeen among the twenty republics of Latin America. In 1927 and 1928 Australia, Canada, and New Zealand made broad tariff revisions, generally upward. Several Asiatic countries achieved the right to make their own tariffs and promptly released their duties--Siam in 1927, China and Persia in 1928. When prosperity collapsed, the increase in duties continued at an accelerated rate.

America Advance

"The advance in the American tariff in June, 1930, was followed during the next eleven months by more or less general upward tariff revision in twenty five countries. In two principal ways these rising tariffs have undermined the world's prosperity--first, by misdirecting the investment of capital and thus prolonging and aggravating many maladjustments which had grown up during the war between the supply of commodities and the demand for them; second, by preventing trade from adjusting itself to the new international debtor-creditor relationships created by the war and the peace treaties.

Prolong Maladjustments

"It is easy to see why rising tariffs have prolonged and accentuated many of the war-time maladjustments between supply and demand. When the world is divided by trade barriers, a new duty or an increase in an old one may lead an industry to expand behind the tariff, despite the fact that the demand for its output at a profitable price does not equal the productive capacity already in existence, but located in other countries. Maladjustments thus aggravated by tariffs, did not directly precipitate the collapse of prosperity but they did weaken the economic position of many countries and reduce their ability to resist depression. Moreover, when the slump came, the prices of the over-produced commodities fell more precipitously than most prices, diminishing the purchasing power of many countries and causing the depression to go from bad to worse.

Violent Shifts

"Few people realize how violent were the shift in international debtor-creditor relationships produced by the war and the pence treaties. Within less than ten years the United States was changed from the largest debtor nation in the world to the second largest creditor nation and Germany from the second largest creditor nation to the largest debtor nation. In addition, there were great increases in the foreign obligations and great decreases in the foreign holdings of many European countries and substantial increases in the foreign debts throughout Latin America and Australasia.

"Must be Paid in Goods"