er was one of the tariffist arguments of the
pre-war period, when there was no question of unequal currency
exchanges. To-day, the argument from unequal currency exchanges is that
in the country where the currency value is sinking in terms of other
currencies the manufacturer is getting his labour cheaper, seeing that
wages are slow to follow increase in cost of living. Both pleas alike
evade the primary truth that if country A trades with country B at all,
it must receive _some_ goods in payment for its exports, save in a case
in which, for a temporary purpose, it may elect to import gold. But that
fact is vital and must be faced if the issue is to be argued at all.
Unless, then, the defender of the occasional tariff system contends that
that system will rectify trade conditions by keeping out goods which are
made at an artificial advantage, amounting to what is called "unfair
competition," and letting in only the goods not so produced, he is not
facing the true fiscal problem at all. Either he admits that exports and
freight charges and other credit claims must be balanced by imports or
he denies it. If he denies it, the discussion ceases: there is no use in
arguing further. If he admits it, and argues that by his tariff he can
more or less determine _what_ shall be imported, the debate soon narrows
itself to one issue.

The pre-war tariffist argued, when he dealt with the problem, that
tariffs would suffice at will to keep out manufactured goods and let in
only raw material. To that the answer was simple. An unbroken conversion
of the whole yield of exports and freight returns and interest on
foreign investments into imported raw material to be wholly converted
into new products, mainly for export, was something utterly beyond the
possibilities. It would mean a rate of expansion of exports never
attained and not only not attainable but not desirable. On such a
footing, the producing and exporting country would never concretely
taste of its _profit_, which is to be realised, if at all, only in
consumption of imported goods and foods. It is no less plainly
impossible to discriminate by classes between kinds of manufactured
imports on the plea that inequality in the exchanges gives the foreign
competitor an advantage in terms of the relatively lower wage-rate paid
by him while his currency value is falling. Any such advantage, in the
terms of the case, must be held to accrue to all forms of production
alike, and cannot