Trade war

“ Millions have lost their lives in the military war: millions will lose their souls in the trade war. Just as we have sullenly obeyed the dictates of the war government, we shall sullenly obey the dictates of the trade government. "We [Pg 38] must win the trade war," our rulers will cry, and, if the profiteers say that men must work sixteen hours a day if we are to beat Germany, the Press and the Church and the School will persuade the public that the man who strikes for a fifteen hours day is a traitor to his country. ”

“ And a trade war which shut, say, all English markets to France, until all French markets were open to97 England, would not violate any economic principle. It is meeting force by force, exclusion by exclusion; and no shudder at our using trade war ourselves will prevent for an instant the trade war which is used against us. Our principles will not weigh a feather in other nations' practice. But warfare is a temporary measure, and retaliation must only be temporary. ”

“ Why should I mention the impressment of our seamen; depredation on every branch of our commerce, including the direct export trade, continued for years, and made under laws which professedly undertake to regulate our trade with other nations; negotiation resorted to time after time, till it is become hopeless; the restrictive system persisted in to avoid war, and in the vain expectation of returning justice? The evil still grows, and in each succeeding year swells in extent and pretension beyond the preceding. ”

“ As a result of this, these nations are pitted against each other. They are industrial rivals—competitors. They begin to arm themselves to open, to maintain the market and quickly dispose of their surplus. There is but the one market. All these nations are competitors for it, and sooner or later every war of trade becomes a war of blood. ”

“ Examine our trade relations with warring Europe and you see how hazardous a shift in old-time relations would be. To the fighting peoples and their colonies in normal times we send nearly seventy-eight per cent of our exports, and from them we derive seventy per cent of our exports. The Allies alone, principally England and her colonies, get sixty-three per cent of these exports and send us fifty-four per cent of all we get from foreign lands. ”

“ As her needs tend to become normal again she will immediately endeavor to resume her old-time trade connections, both import and export, at least in so far as the trading centres are in countries that were friendly or neutral during the war. In seeking to re-establish these connections the merchants of the belligerent countries will be strongly backed by their Governments, which the war will have made more socialistic and more aggressive. ”

“ The second of these great causes of war, protection and the competition for markets, has somewhat changed its aspect since the comparative exhaustion of the world supplies of food and raw material. Before the war, nations chiefly wanted to sell. Markets were the great object of ambition, and tariff walls the great means of offence. Great Britain, of course, kept her doors everywhere open to the trade of the world. ”

“ Any sweeping change of tariff, navigation or financial policy on the part of either group of the Allies, and particularly on the part of the Entente Allies, may seriously affect the domestic prosperity of the United States, in which foreign trade is a vital element. ”

“ His own notion about commerce was that he could "make it manoeuvre like a regiment"; and this military conception of trade led him to entertain the fond hope that exchequers benefited by confiscation and prohibitive tariffs, that a "national commerce" could be speedily built up by cutting off imports, and that the burden of loss in the present commercial war fell on England and not on the continental consumer. ”

“ Some of us who lived through the hard times of the 1930's can tell you about that danger. When one nation decides to erect these barriers, it leads inevitably to retaliation by other nations. Soon the trade war is underway. ”

“ In proportion to the volume and value of the national trade afloat is the potency of its destruction as an agency for bringing the national will into submission. If, for example, the maritime trade of England could be suppressed by her enemies, England would thereby be vanquished. Her commerce is her life-blood. On the other hand there are nations, very powerful in war, which either by reason of their geographical position, or because their oversea trade is no vital element in their national economy, would suffer comparatively little in like circumstances. ”

“ Even we are experiencing the inevitable consequences of this war in the way of reduced trade with the warring nations and their neighbors, in­creased transportation and insurance rates, depressed prices for export commodities, and other intangible effects which result from a stoppage or a drastic limi­tation of world trade. ”

“ Similarly, Trade—that is to say exclusive trade—far from tending to promote peace, has not infrequently been accompanied by aggression, and has rather tended to promote war. Tariff wars, which are the natural outcome of the protective system, have been of frequent occurrence, and, although I am not at all prepared to admit that under no circumstances is a policy of retaliation justifiable, it is certain that that policy, carried to excess, has at times endangered [Pg 137] European peace. ”

“ Exports of manufactures increased even to Europe, including such important items as railroad supplies, agricultural implements, machinery, petroleum products, etc.; and it was estimated that in 1920 the United States was supplying one-third of the total demand for manufactured wares in the trade of the world.
777. Effect of the war upon the import trade.—The United States made its commercial contribution to the World War, as has already been said, by following a course which was the reverse of that of the European belligerents; it expanded its exports, and restricted its imports. ”

“ The manufacturing system is not only injurious to agriculture, but, say its opponents, it is injurious also to foreign commerce. We ought not to conceal from ourselves our present actual position in relation to other powers. During the protracted war which has so long convulsed all Europe, and which will probably be succeeded by a long peace, we transacted the commercial business of other nations, and largely shared with England the carrying trade of the world. Now, every other nation is anxiously endeavoring to transact its own business, to rebuild its marine, and to foster its navigation. ”

“ When trade is restrained competition commences. Competition soon becomes jealous of the restricted territory and war begins. Commercial wars often begin with a tariff and end with a shell. It is at first a commercial war, but as its intensity develops the bullet and the shell come in. Artificial barriers are obsolete in these days of flying. The airship should be the peace-bringer of the world."
So Eastern and Central Asia developed into great producing nations with the consequent desire for trade expansion—particularly with Australia and with the markets of Western Europe. ”

“ War has interrupted the means of trade not only but also the processes of production. In Europe it is destroying men and resources wholesale and upon a scale unprecedented and appalling, There is reason to fear that the time is near, if it be not already at hand, when several of the countries of Europe will find it difficult to do for their people what they have hitherto been always easily able to do,--many essential and fundamental things. ”

“ Because of our added diplomatic responsibilities abroad, we have had to raise one million dollars, and also two and a half millions for the Americans stranded on the other side. Many of our factories have closed because they dealt in a heavy export trade and for which at present there is no demand. ”

“ That is doubtless true to the extent that every war cannot fail to benefit some section of the capitalistic world, which will therefore favour it, but it is true to that extent only. The old notion that war and the acquisition of territories encouraged trade by opening up new markets has proved fallacious. The extension of trade is a matter of tariffs rather than of war, and in any case the trade of a country with its own acquisitions by conquest is a comparatively insignificant portion of its total trade. ”

“ Apart from wars, which commerce directly tends to avert, but which often spring from forces more powerful for the time than commercial interest, there remained little more by which a rapid extension of international trade could be impeded, save causes arising from ignorance or impolicy; and among these deserves chiefly to be noticed the prevailing practice of nations, in promoting their own several industries and trade, to wage a subtle war in times of peace on the industries and trade of each other. ”

“ The war will certainly have this effect, that the American business world will devote all its energy toward making itself independent of the importation of foreign products as far as possible....
“If the decision is again brought home to German industry it should not be forgotten what position the United States took with reference to Germany in this war. Above all, it should not be forgotten that the ‘ultimate ratio’ of the United States is not the war with arms, but a complete prohibition of trade with Germany, and, in fact, through legislation. ”

“ The effect of war on commerce generally must be judged by its results on commerce as a whole; there must be a general balance-sheet of United States trade in which the profits of some merchants must be set against the losses of others. Is it quite certain that American commerce as a whole has not derived much benefit from the War rather than suffered serious loss? ”

“ Thus, in one place or another, trade is often suspended, all intercourse cut off, and things are in a state of war; till necessity, either on the ship’s part, or on theirs, produces overtures of peace, and dictates the price, which the offending party must pay for it. But it is a warlike peace. We trade under arms ”

“ We observe your remarks on the timorousness of the French merchants, respecting the formation of trading companies, which, you say, is occasioned by the change and fluctuation of news. That the spirit for trade will always be governed by the rise [Pg 287] and fall of military strength, is a maxim always to be admitted in the first attempts to establish a commerce between any two nations, because success in war is supposed to give security or protection to it. ”

“ Special attention will have to be given to the early removal of those restraints on trade—prohibition of exports and imports—which have been frequently necessary, either to retain in the country what is wanted to satisfy home requirements or to prevent goods from finding their way to the enemy, or to ensure that the limited tonnage available is used to bring the commodities which are vital to meet the pressing needs either of the forces engaged in War or of the civilian population. ”

“ I should therefore wish to leave such advantages still to neutral trade as to make it quite clear to be the policy of America, if she is wise, to prefer the neutral trade that will be left to her to the total stoppage of her trade with the enemy and with ourselves which a war might occasion.... ”

“ We are going to suffer, I am afraid, terribly in this war whether we are in it or whether we stand aside. Foreign trade is going to stop, not because the trade-routes are closed, but because there is no trade at the other end. ”

“ Our overseas trade falls off greatly, because we need many of our merchan [8] t ships for transport and supply, because we cannot produce such large quantities of goods for export, and because we cannot trade with enemy countries at all. ”

“ Our trade is not going. The seas are ours, and they will remain ours. We shall get not merely our own trade, except that of European countries, but we shall get a good deal of the enemy's trade as well, and, of course, there is always the business which is necessary in order to keep the war going. ”

“ A tariff on raw materials may be necessary for the maintenance of domestic industries of indispensability in time of war. A tariff may be defensible as a means for preventing the disturbance of “dumping” at other times. A tariff system, however, whose purpose is to curtail foreign trade in general and eliminate common competition is an economic restriction of very great danger. ”

“ It is true that during the war our trade with Germany, Russia, and France must be practically at a standstill. There are even pessimists who say that our general European trade must be severely crippled until the campaign is over. ”

“ The most dangerous thing in the business so far is concerned is the wide disregard of the fact that national economic fighting is bound to cause war, and the almost universal ignorance of the necessity of subjecting shipping and overseas and international trade to some kind of international control. ”

“ Then came the wars over trade-routes, and the struggle for the control of seagoing commerce. And now, under the dominion of an industrial system that is founded on the machine, the factory, the railroad, the bank and the retail store comes the international competition for foreign markets. ”

“ The enormous industrial expansion of the United States during the Great War, however, has changed these conditions. Raw materials have become an increasingly greater proportion of the nation’s import trade, and American business men are becoming concerned about foreign control of certain essential commodities such as rubber, nitrates, chrome, and petroleum. ”