The increases in import duties resorted to by many governments during the early days of the depression were soon followed by various additional schemes for controlling the importation of for eign goods or the transfer of funds to pay for them. The use of quota limitations upon the quantities of different classes of im ports had by 1934 spread to almost all countries of Europe and, in lesser degree, to some non-European areas. Starting after the financial difficulties of Central Europe in 1931, centralized control on the transfer of funds abroad was resorted to by one govern ment after another, until by 1935 exchange control in some degree was being employed by a majority of the countries of Continental Europe and of Latin America. Adopted originally as temporary and defensive measures, both import quotas and exchange con trols have come to be widely used as aggressive means by which governments are trying to correct "adverse" trade balance situa tions, or to bargain for larger national exports, for payments of funds due their citizens, or for other special advantages. The relative allocations of goods or of exchange to different countries have in many countries been put on a frankly preferential basis, and in some cases have quite superseded import duties as the prime controllers of the movements of trade.
Bilateral agreements constitute the principal method now em ployed by governments for the maintenance or enlargement of their foreign trade. However, the recent trend toward exclusive and discriminatory arrangements, and the spread of the idea that the value of the trade between each pair of countries should ap proximate an annual balance,—or be adjusted until it does,—have only reinforced the movement toward trade diversion and general shrinkage. In several countries, mainly of Europe, there have been developing since 1933 centralized governmental controls on the production, trade and imports of certain farm products, pri marily to enhance the return to domestic producers. However, the
extreme measures of this character undertaken by Germany in 1934, and by Italy in 1935, have been motivated by the exceptional interest of those governments in the development of their arma ment programmes and in the support of their currencies.
Meanwhile, the extreme shrinkage of the United States export trade, especially in agricultural products, led the American Gov ernment to launch a wide programme of trade agreements with selected countries, under authority granted by Congress in June aimed at the reciprocal reduction of the tariff and other barriers unduly restricting their former commercial interchanges, and incidentally to give a new turn to the commercial policy of the nations generally. Up to December 1935, the United States had announced negotiations for trade agreements with the govern ments of 18 foreign countries, and agreements had been con cluded with countries representing over 25% of American foreign trade (with Cuba, Brazil, Belgium, Haiti, Sweden, Colombia and Canada).
The new programme of limitations upon trading with Italy that was being initiated toward the close of 1935 by a large number of countries, and the threatened counter-restrictions on the part of Italy upon the trade of these countries, have thrown some new incalculables into the international trade situation. However, on December 5, 1935, it is possible only to recognize their great potential importance. (H. CHA.) BIBLIOGRAPHY.-Ame, Etude sur les tarifs de douane et sur les traites de commerce (1876) ; P. Ashley, Modern Tariff History (1904, 3rd ed., 192o) ; J. B. Esslen, Politik des Answiirtigen Handels (1925) ; A. Beer, Osterreichische Handelspolitik im XlX. Jahrhundert (1891) ; M. Weber, Der Deutsche Zollverein (1871) ; W. Lotz, Die Handelspolitik des Deutschen Reiches, 189o—Ipoo (iwl); Schriften des Vereins fiir Socialpolitik (19oo-19o1) ; Augier et Marvaux, Politique douaniere de la France (191I) ; A. Delle-Donne, Post-War Tariffs (1927) ; F. W. Taussig, The Tariff History of the United States (8th ed., 1931) ; E. Stanwood, American Tariff Controversies in the Nineteenth Century (1903) ; T. E. Gregory, Tariffs: A Study in Method (1921) ; T. W. Page, Making the Tariff in the United States (1925) ; Dictionary of Information (U.S. Tariff Commission, 1924). (F. W. T.)