Our foreign trade is at present badly disrupted. A tariff crisis is today strangling international trade. Domestic farm prices show the consequences. In agriculture bankruptcy has become well-nigh universal. At the same time our debtors abroad, both public and private, are forced to default. The loss of the foreign markets, moreover, has destroyed the fundamental balance between agriculture and industry in our national economic life.

There are, however, several correctives at work mending the fabric of foreign trade. But it is important to observe that the burden of these correctives falls with ruthless severity upon the American farmer. In substance, the adjustments now taking place in foreign trade are simply reducing the exports of commodities from the United States enough to balance our international incoming and outgoing payments to fit our creditor position.

What, then, can be done to relieve this undue pressure on American agriculture? This circular is essentially an examination of the only principal alternative, namely, the lowering of our tariff wall. The consequences of tariff adjustments, as a means of restoring our foreign trade, are considered in this study.

It is assumed that the reader is familiar with the basic analysis set forth in Circular 146 (No. VIII of this series), "How Tariffs Affect Farm Prices," because it is important to understand how the creditor position of the United States bears upon foreign trade and the whole problem· of tariffs.