which it is the object of treaties containing the most favored nation clause to prevent. Mr. Gresham, then Secretary of State, in an instructive opinion written from the free trader's standpoint, held the law to be a violation of treaty obligations,2 and 1 Baron Saurma to Mr. Gresham, U. S. For. Rel. 1894, p. 235. "to any other 2 Mr. Gresham in his report to the President noticed above says: The stipulations of those two articles (VIII and IX of treaty of 1828 with Prussia) place the commercial intercourse of the United States and Prussia, not the entire German Empire, on the most favored nation basis,—the first by providing that the duties shall not be higher than "On the like articles being the produce or manufacture of any other foreign country:" the second by providing that any particular favor granted by either party nation" shall "immediately become common to the other party." In other words, these stipulations give either party the right, special engagements of reciprocity being excepted, to take the duties levied by the other on articles, the produce or manufacture of any other country, and to demand the same treatment for its own product and manufacture. It is obviously no answer to this to say that certain discriminating duties levied by one party on the products or manufactures of the other are not confined to the latter, or to any country by name, but apply equally to all countries that may happen to fall in a certain category. If there is any other country, or if there are other countries, which, either by name or by a general classification are exempt from the duty (special engagements of reciprocity being excepted) the requirements of the treaty are not fulfilled. To say that the discrimination is not specifically and explicitly national, or that it applies to more than one country, is a mere argumentative subterfuge, inconsistent with the clear intention of the treaty." Rough Rice case then set out at some length to show how the United States maintained successfully her contention that the exemption from duty of rice from the West Coast of Africa, which though geographical, was nevertheless a real favor to certain rice in which favor American rice should share. The discrimination of the act of 1894 is even more pointedly at variance with the treaty stipulations in question than was the discrimination in the British Acts in 1836, since it imposes, expressly, an additional duty on the article as the produce or manufacture, and because it is the produce and manufacture of a country which may happen to fall within a disfavored category. It is scarcely necessary to say that the question now under consideration cannot be effected by the form in which the discrimination is created . . whether it is created by granting a duty lower than the general duty or by imposing a duty in addition to the general duty. The form in which the discrimination is created, is no criterion either of its extent or its effect. In reality, in the present case, the discrimination, so far as its effect is now ascertained, would fall on Germany and Austria-Hungary alone, if it fell only on one country or on three or more, the question of treaty construction would remain so long as there was any other country that was favored. An the President recommended and secured the repeal of the statute imposing the duty.1 other question, however, is yet to be considered. Can the payment by a Government of a bounty on the exportation of an article of its produce or manufacture be considered in the light of a discrimination which may warrant another Government in laying on the importation of such article an additional or discriminating duty, in spite of a most favored nation stipulation? The answer seems to be plain, that the payment by a country of a bounty on the exportation of an article of its produce or manufacture for the purpose of encouraging a domestic industry can no more be considered as a discrimination than can the imposition of a protective or practically prohibitive duty on the importation of an article, the produce or manufacture of a foreign country for the same purpose be so considered. The two measures are the same in principle; the question as to which shall be adopted, is a matter of domestic policy. It is a matter in respect of which nations, in stipulating for equality of treatment, have preserved liberty of action. The protective duty on importations and the bounty on exportations are alike intended, whatever may be their effect, to create a national advantage in production or in manufacture. As between the two, the bounty is the more favorable to the inhabitants of foreign countries, since it tends to enable them to get cheaper articles at the expense of the bounty paying government. Formerly, the Government of the United States paid a bounty on all exported pickled fish, derived from the fisheries of the United States (Sec. 2, Act of July 29, 1813, Stat. L. vol. 3, p. 50). It remained in force for many years; it seemed still to have been in force in 1845. It probably never was imagined that this act created a discrimination which might expose the United States to retaliatory or discriminatory duties at the hands of foreign Governments. In laying protective duties on foreign articles, instead of paying bounties on domestic products, the immediate effect, if not the object, of the law is to curtail importations; but, so long as the duties imposed are equal on the products or manufactures of all nations, though in practice they may operate most unequally, foreign nations cannot object on legal grounds. They cannot allege discriminations in the treaty sense. It is understood, when treaties against discriminating duties are made, that Governments reserve the right to favor (by duties or by bounties) their own domestic productions or manufacture. The additional duty, therefore, levied by the acts of 1894 on all sugars coming from bounty paying countries is not responsive to any measure that may be considered as constituting a discrimination by those countries against the production or manufacture of the United States, but is itself a discrimination against the produce and manufacture of such countries. It is an attempt to off-set a domestic favor or encouragement to a certain industry by the very means forbidden by the treaty. F. R. 1894, p. 236 1 Ibid. p. X. The law was re-enacted in 1897, and protests were received by Austria-Hungary and other countries similar to the ones presented in 1894.1 On this occasion the Government, which was Republican and strongly protective, denied that there was any unfair discrimination against the goods or products of the complaining States. The Attorney General's opinion, in contradiction to that of Mr. Gresham's, which was pronounced untenable, supports the act for three reasons: 1. From the foundation of the Government, the most favored nation clause had "been invariably construed both as not forbidding any internal regulations for the protection of our home industries, and as permitting commercial concessions which are not gratuitous 2. The tariff was a statute later than the treaty. 3. "The interpretation of the most favored nation clause, so clearly established as a doctrine of American law, is believed to accord with the interpretation put upon the clause by foreign Powers certainly by Germany and Great Britain. Thus, as the clause permits any internal regulations that a country may find necessary to give a preference to native merchants, vessels and productions, the representatives of both Great Britain and Germany expressly declared at the International Sugar Conference of 1888 that the export sugar bounty of one country might be counteracted by the import sugar duty of another without causing any discrimination which could be deemed a violation of the terms of the most favored nation clause." 2 1U. S. For. Rel. 1897. Correspondence with Austria-Hungary, p. 22; with Germany, pp. 175, 177. 2 Mr. Sherman to Mr. Von Reichenau, U. S. For. Rel. 1897, p. 178. References are to Pages. INDEX. References are to Pages. ADAMS, MR. JOHN QUINCY, A. correspondence of, relative to interpretation of treaty of 1803 between AD VALOREM, system of levying duties on imports and exports. Its effect on most AGENT, tax upon, 75. ARTIFICIAL WATERWAYS, charges for use of, 98, 99. AUSTRIA, commercial policy of, 14. AUSTRIA-HUNGARY, see RECIPROCITY, also BOUNTY. B. BAYARD, MR. THOMAS, opinion upon zone favors, 85-89. BEACONS, charges for use of, 93, 94. BELGIUM, treaty of 1858 between United States and. Reasons for abrogation of, BELGIUM, vessels of in United States ports, 82. BILL OF LADING, instrument of commerce, 104, 105. BISMARCK, commercial policy of Germany under, 14. BOXES, see PACKING CASES. BOUNTY, on exports, 120. BOUNTY, discriminating duties on articles the production of which is encouraged by bounty, 120. BOUNTY, References are to Pages. protests of Austria-Hungary, Germany and other powers against coun- BUOYS, charges for use of, 93, 94. C. CAPE OF GOOD HOPE, duties on goods arriving from ports beyond, 69. CASES, see PACKING CASES. CITIZEN, subject, or inhabitant,—dual position of in commerce, 36. subjects or inhabitance,-synonymous with “Nation,” 36. opinion upon zone favors, 84. COFFEE, Dutch coffee from the Netherlands. Case of, 65. agents of, 46. COMMERCE, articles of, 46. COMMERCE, definition of term, 45. COMMERCE, favors in, how extended, 53. COMMERCE, instruments of, 46. COMMERCE, taxes on, how levied, 47. COMMERCIAL TRAVELER, tax upon, 76. COMMISSION OF CLAIMS, British-American. Decisions of, 70–71. CONCESSIONS, gratuitous in literal sense unknown, 12. CONFLICT, between treaty provisions and domestic law, 35. for privileges and favors, 8. CONSULAR CONVENTION, use of most favored nation clause in, 5. CONSULTATION OR DELAY, use of phrase in most favored nation clause, 30. not included in most favored nation clause, 40. |