showing that their most deadly rivals in the economic field were the Germans, and not the English, as had formerly been the case.

The statements concerning wages and differences of cost of production in Germany seemed so incongruous and absurd to that country that it took cognizance of the matter. It submitted actual proof and official memoranda to the contrary through its foreign office to the Secretary of State of the United States, but, owing to delays, the material was not distributed until after Congress had adjourned.51

An important feature of the Payne-Aldrich Tariff Act, approved August 5, 1909, was the provision for a minimum and maximum rate of duty upon foreign imports and the regulation of conditions under which these charges were to be imposed. The President of the United States, in his executive capacity, had the power to decide whether a country was to be discriminated against in respect to trade with the United States, and he could apply his decision to any country or part thereof. Among many administration advisors it was a cause for anxiety as to the effect this provision would have upon our relations with foreign governments, especially with Germany, France and the British Empire; for it is a foregone conclusion that a preference granted to one country will result in discrimination against another nation. Thus the former policy of our government, that of granting a concession for a favor, was abandoned, and a practice of penalizing nations which discriminated against the United States was instituted. In addition, this Act provided that the President be empowered, and, indeed, it was made his duty, to give, within ten days after the passage of said Act, notice to all foreign countries of the termination of all commercial agreements. This clause further provided that if no stipulations were contained in any said agreements as to the time of termination by diplomatic action, then the President is authorized to give to the governments concerned a notice of termination of six months, which notice shall date from April 13, 1909."52 Section 2 of the Act provided for maximum and minimum rates. Section 3 exempted the reciprocity treaty with Cuba from the operation of the Act and Section 4 referred to the method of termination of existing commercial treaties.

61 See Senate Document No. 68, 61st Cong. pt. 2. 52 See U. S. Foreign Relations, 1910, pp. 270-271.

President Taft sensed international difficulties which might arise under the operation of the maximum tariff duties as well as under the termination of all commercial treaties with foreign governments. In order to have proper assistance in the application and the putting into effect of those sections of the new tariff act liable to cause friction, he established, in September, 1909, a Tariff Board, appointing Prof. Henry C. Emery, chairman. This board was to co-operate with the State Department in investigating discriminatory acts of foreign governments and to advise negotiations for the removal of any existing discriminations against the United States.

On October 18, 1909, the Department of State issued general instructions to all its diplomatic officers and to a number of consular agents to report to the Department all discriminatory tariff treatment accorded the United States by any foreign country. As a result of these instructions the Department received most complete data, and it reported to President Taft that, in some instances, the commerce of the United States was much curtailed owing to undue discrimination against American products, and that, in other cases, there was pressing need for an adjustment of tariff schedules.5

The Tariff Act of August 5, 1909, thus practically provided for the imposition of maximum rates as a penalty against countries which gave unfair and unequal treatment to American products. It discarded the former policy of granting concessions in return for favors. This same Act terminated all reciprocity treaties, after due notice, with the exception of the convention with Cuba.

53 See House Document No. 956, 61st Cong., Ses. II, pp. 10-140.

List of documents from the Department of State relative to the tariff negotiations made necessary by the Tariff Act of August 5, 1909:

(1) Circular letter of Department of State to diplomatic representatives and some consular agents, of October 18, 1909, p. 14.

(2) Law passed by German Reichstag, February 5, 1910, p. 17.

(3) Communication from German Ambassador relative to American meat products, p. 18.

(4) Translation of Customs Tariff, German Customs Union, p. 18.

(5) Tariff decree of the French Government, March 29, 1910, relative to tariff treatment of products of the United States, p. 137.

(6) Dispatch of American Ambassador at Vienna relative to the admission of American pork products into Austria-Hungary, p. 140.

(7) Canadian Tariff Concessions, p. 141.

(8) Form of Minimum Tariff Proclamation, p. 149.

(9) List of Minimum Tariff Proclamations issued by the President, p. 14.

RELATIONS WITH FRANCE over the TERMINATION OF THE COMMERCIAL AGREEMENTS ANd over the MINIMUM AND MAXIMUM TARIFF RATES

France formally protested to the Secretary of State of the United States on August 10, 1909, against the Tariff Act, on the ground of its effect on the three existing Franco-American commercial treaties signed on August 20, 1902, January 28, 1908 and May 28, 1908, respectively. The French Government could not understand "the differential treatment which is being imposed on France." The French Government also contended that the 1908 commercial agreement with the United States provided for a longer term before cancelation and therefore the time allowed her was shorter than that given to other foreign governments.

The reply of the Secretary of State to the French Government, under date of August 23, 1909, contained the information that commercial agreements are not, in the constitutional sense, similar to treaties, in that these instruments do not require the concurrence of the Senate of the United States, and that no discrimination had been shown France in the provisions of Section 4 of the new Tariff Act, since the terms of the commercial agreements with Bulgaria and Switzerland had not stipulated in regard to their termination by diplomatic action.

France still continued her plea for some abatement from the operation of the law, until on November 18, 1909, the Secretary of State explained in great detail the attitude of the United States Government upon the legal points involved, and the interpretation made by the Department of State of the diplomatic note of April 22, 1907, signed by the United States and Germany, which was annexed to the 1907 commercial treaty between the two governments. The incident was closed when, on December 1, 1909, Ambassador Jusserand, of France, thanked the Secretary of State for his courtesy and expressed his desire for the continued friendly relations between his government and that of the United States.54

All the reciprocity concessions obtained by the United States from France prior to the passage of the Payne-Aldrich Act were thus terminated, and for a period the old French maximum rates applied. However, in 1910, France revised her 1892 Tariff, and

4 See United States Foreign Relations, 1909, pp. 248-260.

Méline, who at that time was the leader of the Protectionist Party, remarked in the Senate:

"This time it is really a minimum tariff which we are making; it is not a 'tariff à negociations' (bargaining tariff)." 55

France adopted its new tariff, which authorized the government to allow its minimum rates to apply to the United States. By this Act 67.1 per cent of the imports to France from the United States would continue to have free entrance, but of the remaining 32.9 per cent of the imports, 29.3 per cent would be admitted under the minimum rates, 0.4 per cent at the general rates, and only 3.2 per cent would come under the new general tariff.

This liberal policy of France promoted more friendly commercial relations, for the 1892 French tariff had given rise to much controversy with the government of the United States as well as with those of European nations. The old French Act had not allowed the United States the "most favored nation" treatment, but now, by the new French tariff, the United States reaped the benefit of the minimum rates.56

France was rather offended at the United States - Canadian tariff negotiations then pending. It also felt that it had been injured by the United States in the changes in the new tariff regarding silk goods. Nevertheless, the two countries adjusted the difficulty by the granting of concessions by France to the United States, and in return the United States accorded France the benefit of its minimum rates. This amicable agreement was reached because France had retaliated against the United States owing to the 1909 Payne-Aldrich Tariff on silk goods, and had imposed additional duties on agricultural implements exported to her from the United States.57

M. André Sayous, Directeur de la Federation des Industriels et les Commerçants Français, on October 9, 1909, at a meeting of the Federation, discussed the effect of the new American Tariff.

55 See Sayous, André E. "Les Modifications apportées, au Tariff Douanier de la France." Revue Economique Internationale. August, 1910, Vol. VII, pt. 3, pp. 236-248.

66 See Reciprocity and Commercial Treaties, 1919, p. 499.

57 Ibid., pp. 97-99.

Tariff of 1909, Percy Ashley, 1919, p, 312.

He mentioned the interview of Ambassador Jusserand with President Taft relative to certain provisions of the measure. He intimated that France must continue its fixed policy toward the United States in the event that an amicable agreement could not be reached. At this meeting, M. Paul Gueneau argued from the point of view of the silk manufacturers, and he was followed by M. Eugene Buhan, who presented the claims of the wine and liquor interests.58

Monsieur Y. M. Goblet, writing in 1913 on "La Douane et l'Amitié Franco-Americaine," deplored the methods of business in vogue at the port of New York in respect to the collection of duties and expressed the hope that the "Cour des Douanes" created by the Payne-Aldrich Tariff Act of 1909, would, materially, improve the situation. He mentioned the effect of the high tariff on the sale of French jewelry in the United States, and cited the protests of the French Ambassador at Washington regarding the effect of the Act on the importation of Limoges porcelains. He concluded with the hope that the new Democratic administration would be responsible for a great reduction in the rates of duty from the then prevailing Payne-Aldrich Tariff rates.5

59

ITALY GRANTS ITS CONVENTIONAL RATES AND MAKES CONCESSIONS TO AMERICAN COMMODITIES

Under the commercial agreement of February 8, 1900, between the United States and Italy, a reduction in the rate of duty on cotton-seed oil had been arranged, but this mutual benefit was no longer possible, owing to the termination of the agreement as a result of the operation of the Payne-Aldrich Tariff Law. Nevertheless, after the tariff negotiations of the State Department in 1910, Italy granted its conventional rates to commodities from the United States and made concessions regarding American medicinal preparations.60

58 See Sayous, André E., "Le Nouveau Tariff Americaine Monograph, Octobre, 1909, Societé du Recuiel Lirey. Paris, pp. 1-17. Gueneau: pp. 26-32. Buhan: p. 32. 59 See Y. M. Goblet, "La Douane et Amitiè Americaine." 218-232, Vol. CI, Le Revue, 1913.

60 See House Document No. 965, 61st Cong., Ses. II, p. 12.