Karl Radek

The New United States Tariff

(27 October 1922)

From International Press Correspondence, Vol. 2 No. 92, 27 October 1922, pp. 699–700.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2020). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

The new tariff adopted in America on September 24th, signifies the victory of American heavy industry and the farmers over the banks and export capital. In answer to the wails of European capitalism for American assistance, American capital obstructs the import of European-made commodities, making it difficult for Germany to pay her debts to France, and for the latter and Great Britain to pay theirs to America. This measure aggravates not only the international crisis of capitalism, but enhances Russia’s importance as a supplier of raw materials for Europe’s industries.


Ever since the end of the war, European capitalism has anxiously let its glances travel over the Ocean, waiting for Uncle Sam, who helped it to crush Prussian militarism and set democracy and condensed milk into the saddle, to help reconstruct Europe which fared rather badly during the four years of war.

The foremost to harbor this hope was Germany.

For even if Wilson rid Germany of its Kaiser, there could be no doubt whatsoever that America, proud of her democratic infant who saw the light of god’s world thanks to that operation, would take care that it was properly nourished. In spite of the fact that Wilson approved of the clauses of the Versailles Treaty strangling Germany, in spite of the fact that America declined to interfere in European matters, the American religion lost none of its followers in Germany.

When it became obvious that Germany would never be able to pay her debts to the Allies, the latter, in order to avoid acknowledging their defeat and the bankruptcy of the Treaty of Versailles, began to cast side-glances across the Ocean.

The European Allies owe America 10 billion dollars: –

Great Britain










All others




If one adds the interest which the Allies did not pay, the American bill totals 125 billion dollars. Europe is to be saved by America either renouncing or considerably reducing these demands, which she is little inclined to concede. Renunciation of this demand would mean that America would have to spend a few billion dollars every year to cover the interest on the loans to the Allies, – more than its whole budget amounted to before the war Renunciation of the debts would furthermore mean renunciation of its gigantic political lever. But if America declines to forego its demands, the question remains, how the Allies and Europe can pay the interest. The only means would be to increase exports to the States. It is not only a matter of paving the interest of one billion dollars on the debts; the balance of the financial relations between Europe and America is, apart from those interests, as follows:–

1. Excess of American exports to Europe over European
exports to America


$ 1,600,000,000

2. Seven per cent on the five billion dollars of European
pre-war debts to America

$    350,000,000

Total in 1921

$ 1,950,000,000

Europe receives from America: –

1. Interest on European capital invested in America


$ 1,000,000,000

2. Remittances of European emigrants to their home
countries and remittances of charitable institutions

$    500,000,000

3. Expenses of American travellers in Europe

$    150,000,000

4. Payments for the services of European banks, freight, etc.

$      50.000,000


$    800,000,000

Thus Europe would have to pay America, every year first 1 billion dollars for the interest on government debts and $1,050,000,000 for the excess of American exports and for the interest on private debts; or about 3 billion dollars in all. Europe’s counter-demands, however, only amount to 800 million dollars. These figures, taken from an article by John Forster Dallace in the first number of Foreign Affairs, published by very influential American circles and edited by Professor Coolidge, go to prove the tremendous importance of those difficulties with which the new tariff bars the road to an increase of European export.


The new tariff is the outcome of a struggle between the banks, American industry and the farmers. The banks financing the export of capital to Europe for the purchase of European enterprises and European commodities, are the principal spokesmen for the renunciation of the debts, the granting of credits to facilitate the solution of the German reparation problem, etc. It we take into consideration the usurious rates under which American banks have given credits to European countries in recent years, we will easily understand the anxiety of American banking capital to save Europe.

Besides the banks, it is those circles that import the cheap German goods and sell them at a profit of several hundred per cent, that are also interested in financing Europe and in raising the tariff barriers.

A third group working in the same direction is that section of American capital that goes to Europe to buy factories and exploit the cheap European labor market. To facilitate European imports would however, mean increased competition for American industry winch is manufacturing for the home market and is therefore adverse to European competition.

The decline of prices for agricultural products, due to the lowering of the European purchasing power and the appearance of Canadian and Argentinian competition on the local market drove the farmers into the arms of the Republican advocates of a higher tariff, with the result that a tariff was passed which has no parallel in the past. This tariff not only provides for an increase of from 10 to 40 per cent on all custom duties, but it also empowers the president to increase or decrease, on his own initiative, the custom duties by 50 per cent, or in other words, impede or facilitate, as the case may be, the imports to America from Great Britain, Erance and the other countries.

The fact that the manner by which the prices of imported goods are to be determined is not definitely formulated makes room for other difficulties. The new tariff will cause an increase of prices, and it is quite possible that it will not survive the next presidential election. For the time being, however, that is for the next few years, it will result in an aggravation of the international situation.


“Many boats with cargoes from Lancestershire and other industrial centers are returning with their full cargoes. Custom duties on these commodities are so high that in many instances they put a ban on imports. Great Britain will not, or only to a very limited degree, be able to export these articles to America.” (Daily Chronicle, the organ of Lloyd George)

It adds:

“Sir Robert Horne intends to go to Washington to negotiate the question of English debts. But we can pay only if we have credits in America, to obtain which we must export goods there. At the very moment when America was to help us find ways to pay our debts, it excludes those commodities by which alone we can pay. America cannot at once receive our wares and exclude them”

The conservative Observer, one of the principal advocates of Anglo-American friendship points out that America is repeating the mistake committed by France when the latter demanded payment of Germany and at the same time handicapped German exports. But these philosophical considerations will very likely effect the American capitalists just as little as the tears of the German Government bewailing the fact that without an American loan it can not recuperate. All observers of American politics are unanimous in their opinion that public opinion in America, i.e., the broad masses of the petty bourgeoisie, are opposed to America’s mixing in European affairs. This public opinion is all the more influential as its interests coincide with the interests of the most influential circles of American capitalism; and as long as the 3 or 4 billion dollars, representing the increase in the cost of living resulting from the new tariff, do not rouse the masses and make them overthrow the Republicans, it is ridiculous to expect the repeal of the new tariff.

Apart from its international significance the new tariff has special importance for Soviet Russia, increasing as it does the interest of European capital in Russian raw material and thus improving our outlook for loans to advance our economic reconstruction.

Last updated on 3 December 2020