MAXIMUM-MINIMUM TARIFF NEGOTIATIONS. The Payne tariff law, approved August 5, 1909, established a maximum as well as a minimum tariff, leaving to the President the duty of applying the maximum duties to imports from countries which unduly discriminated in their tariffs or otherwise against importations of the products of the United States. The provisions of the Payne law were: The provisions of the dutiable list and the free list of The Minimum Tariff. this section shall constitute the minimum tariff of the United States. Section 2. That from and after the thirty-first day of March, nineteen hundred and ten, except as otherwise specially provided for in this section, there shall be levied, collected, and paid on all articles when The Maximum Tariff. imported from any foreign country into the United States, or into any of its possessions (except the Philippine Islands and the islands of Guam and Tutuila), the rates of duty prescribed by the schedules and paragraphs of the dutiable list of section one of this act, and in addition thereto twenty-five per centum ad valorem, which rates shall constitute the maximum tariff of the United States: Provided, That whenever after the 31st day of March, 1910, and so long thereafter as the President shall be satisfied, in view of the character of the concessions granted by the minimum tariff of the United States, that the government of any foreign country Imposes no terms or restrictions, either in the way of tariff rates or provisions, trade or other regulations, charges, exactions, or in any other manner, directly or indirectly, upon the Importation into or the sale in such foreign country of any agricultural, manufactured or other product of the United States, which unduly discriminate against the United States or the products thereof, and that such foreign country pays no export bounty or imposes no export duty or prohibition upon the exportation of any article to the United States which unduly discriminates against the United States or the products thereof, and that such foreign country accords to the agricultural, manufactured, or other products of the United States treatment which is reciprocal and equivalent thereupon, and thereafter, upon proclamation to this effect by the President of the United States, all articles when imported into the United States, or any of its possessions (except the Philippine Islands and the islands of Guam and Tutuila), from such foreign country shall, except as otherwise herein provided, be admitted under the terms of the minimum tariff of the United States as prescribed by section one of this act. The proclamation issued by the President under the authority hereby conferred and the application of the minimum tariff thereupon may, in accordance with the facts as found by the President, extend to the whole of any foreign country, or may be confined to or exclude from its effect any dependency, colony, or other political subdivision having authority to adopt and enforce tariff legislation, or to impose restrictions or regulations, or to grant concessions upon the exportation or importation of articles which are, or may be. Imported into the United States. Whenever the President shall be satisfied that the conditions which led to the issuance of the proclamation hereinbefore authorized no longer exist, he shall issue a proclamation to this effect, and ninety days thereafter the provisions of the maximum tariff shall be applied to the importation of articles from such country. Whenever the provisions of the maximum tariff of the United States shall be applicable to articles Imported from any foreign country they shall be applicable to the products of such country, whether imported directly from the country of production or otherwise. By March 31, 1910, proclamations had been issued by the President admitting the products of all foreign nations and their dependencies under the minimum schedule. The only countries which were found to impose discriminations sufficient to require retaliatory action on the part of the United States were Germany, France, Austria-Hungary, Italy, Greece, Belgium, the Balkan States, Brazil and Canada. Adjustments were made without much difficulty except in the case of France and Canada. The results of the negotiations were summarized as follows in a report made by Secretary Knox to the House of Representatives on June 9, 1910: Agreement The German government withheld from numerous classes of imports from the United States the benefit of its conventional or minimum tariff rates. These conventional rates represented reductions of duty made by Germany as concessions to various governments of Europe in return for equivalent concessions made by them in reciprocity treaties, the mutual benefits of which were given wide application through the operation of the most favored nation clause as construed by European governments. The Department of State had found it impossible, previous to the passage of the act of August 5, 1909, to obtain for American commerce complete equality of tariff treatment in Germany. The scope of the tariff negotiations covered the discussion of all the various questlons that have for some years past embarrassed the exporters of both nations. The commerce between the two countries is so extensive that these questions presented complex phases difficult of settlement. The negotiations resulted in Germany granting to the United States her full conventional tariff rates in return for the minimum tarif of the United States, this being an exchange of minimum for minimum. The United States was thus placed on exactly the same terms as all other countries to which Germany had granted her conventional tariff in pursuance of treaty stipulations. This tariff equalization was put into operation by the German government in the law of February 5, 1910. Under the regulations of the German customs administration the production of certificates showing the microscopic inspection in the United States of American pork products had been required upon importation. In view of the thorough and complete inspection of these products now made under the United States inspection law of June 30. 1906, the Deiartment of State held that their healthfulness was so fully established before their exportation that the results of this inspection should be accepted in foreign countries in lieu of the microscopic inspection which formerly existed in the United States. The reasonableness of this position was finally recognized by the Ger man government, and since April 15, 1910, the pork products of the United States have been admitted into Germany when accompanied only by the certificates of federal inspection under the provisions of the United States inspection law. The tariff conditions affecting American commerce in France, particularly as regards finished products of manufacture, had been unfavorable. Under the commercial agreements of 1898 and 1908 providing for limited reciprocity, Agreement the benefit of the minimum rates on twenty-five numbers of the With French tariff had been granted to the United States. This left nuFrance. merous and Important classes of American products subject to the discriminatory rates of the general or maximum tariff. All leading commercial nations competing with the United States in the markets of France had the benefit of the complete French minimum tariff. During the interval between November 1, 1909, and March 31, 1910, the French government applied its complete maximum tariff rates to all dutiable importations from the United States. The basis of settlement with France upon which the minimum tariff of the United States was granted to that country was that France granted her minimum tariff rates to the United States on about eighty numbers of the tariff where two rates existed. These cover manufactured articles most important in the export trade of the United States, including agricultural and various forms of implements, tools and machinery, on which this government had long sought equality of tariff treatment. In addition assurances were given as to the maintenance of many general tariff rates in the French schedules, the understanding being that if certain rates are lowered the United States shall be accorded such reduction. The French rates on all edible oils were equalized, thus removing discrimination against cotton seed oil, which for edible purposes is a distinctively American product. Sulphur of American production was placed on a tariff equality with that imported from other countries. Assurances were given by France that the government would continue to waive the requirement of the production of certificates showing microscopic inspection in the United States of American pork products imported into France, as is done in the case of imports from other countries. Certain features of the administration of the customs laws and the pure food laws of both countries, which had been restrictive of and burdensome to trade in important particulars, were adjusted finally and satisfactorily as part of the negotiations. Canada has a general tariff law, applicable to all foreign imports, except from Great Britain and the British possessions, which enter at reduced rates. The Dominion has a reciprocity convention with France under which conAgreement cessions from the general tariff rates are made upon ninety-seven With items or numbers. Most favored nation commercial treaties made by Canada. Great Britain on Canada's behalf entitled thirteen other countries to the same favors as France received; among those countries being Austria-Hungary, Japan, Spain and Switzerland. The United States asked to be put on the same footing as France and the other countries enjoying conventional tariff rates. Canada contended that as the United States made it no special tariff conces sion, its general tariff was an equal exchange for the minimum schedule of the Payne tariff. This question was adjusted satisfactorily by the extension on the part of Canada of the intermediate rates of the Canadian tariff to various exports of the United States. The list of commodities to which intermediate rates were conceded was as follows: No. of Canadian tariff. Reduced rates of duty. Prunes and dried plums, unpitted; raisins and dried cur- 94 Dates and figs, dried, per 100 pounds.. 99 100 112 180 Almonds, walnuts, Brazil nuts, pecans. and shelled peanuts, Nuts of all kinds, n. o. p.. per pound.. 228 Soap powders, powdered soap, mineral soap, and soap, n. 234 Perfumery, including toilet preparations, nonalcoholic, viz., 55 cents. cent. 2 cents. 22 per cent. 32% per cent. No. of Canadian tariff. Reduced rates of duty. 287 318 366 604 634 *711 pastes, and all other perfumed preparations, n. o. p., used Tableware of china, porcelain, white granite, or ironstone... Watch actions and movements, and parts thereof, finished or Feathers and manufactures of feathers, n. o. p.; artificial All goods not enumerated in this schedule as subject to any Provided, That duty shall not be deemed to be provided Provided further, That when the component material of chief value in any nonenumerated article consists of dutiable material enumerated in this schedule as bearing a higher rate of duty than is specified in this tariff item, such nonenumerated article shall be subject to the highest duty which would be chargeable thereon if it were composed wholly of the component material thereof of chie? value, such "component material of chief value" being that component material which shall exceed in value any other single component material in its condition as found in the article. The abbreviation "n. o. p." means "not otherwise provided." 321⁄2 per cent. 27% per cent. 12% per cent. 12% per cent. 15 per cent. 271⁄2 per cent. 17% per cent. In a statement explaining the effect of the concessions Secretary Knox said: "The intermediate rates of the Franco-Canadian treaty conceded to the United States by Canada cover business amounting approximately to $5.000.000 annually. They include about forty staple commodities. The omnibus clause of Secretary the Canadian tariff, which covers a large variety of miscellaneous Knox's articles, is conceded in its entirety. Heretofore all articles under this Analysis. clause imported from the United States have been subject to the general tariff of 20 per cent ad valorem. Hereafter they will pay 171⁄2 per cent ad valorem. "Cottonseed oil is one of the most important products covered by this clause. The importation from the United States exceeds $500,000 annually. Vegetable and other oils besides cottonseed oil, mineral waters and manufactures of celluloid are among the other articles of largest importation. Drugs and dyes exceeded $300,000. Other leading articles covered by the omnibus clause are lime, sausage casings, sponges, manufactures of straw and wax, glycerine and camphor gums, magnesia, bicarbonate of soda and miscellaneous breadstuffs. "The largest single group of staple commodities included in the agreement are dates, figs, raisins, runes, currants, almonds and other nuts. The exports from the United States to Canada of these commodities in the last fiscal year amounted to $1,140,000. The competition from France and Spain in them reached $900,000. "The importation of toilet soaps, perfumes and toilet preparations from the United States amounted to $500,000. Watch actions and movements, in which there is competition with Switzerland, amounted to $500,000. Dressed leather in various forms aggregated about the same. Photographs. chromos, engravings, pictures, etc., exceeded $400,000. Artificial flowers and feathers constituted about $200,000. Tableware of china and porcelain and window glass are also included in the list. In all these articles there is either active or prospective competition between the products of France and the other countries entitled to the favord nation treatment and similar products of the United States." Austria-Hungary exchanged its full conventional tariff for the minimum tariff of the United States and dispensed with its former requirement that the pork products of the United States should be accompanied on importation into Austria-Hungary by certificates showing their microscopic inspection in the United States. It also agreed to reduce the discriminating duty on cotton seed oil and equalize it with the duties on competing vegetable oils. Other Agreements. Italy granted complete conventional tariff rates and made certain administrative changes favorable to American commerce including the classification of gum lumber in such a manner as to permit its admission free of duty, and the less rigorous application of the sanitary regulations governing the admission of American pharmaceutical and medicinal reparations. Greece exchanged minimum rates and restored the former rates on cottonseed oil and lubricating oils, which rates were 50 per cent lower than those in force when negotiations were begun. Belgium exchanged minimum rates and promised to remove the discrimination against American lubricating oils in purchases of supplies for the Belgian state railroads. Servia reduced the rate on cottonseed oil. Prior to the beginning of tariff negotiations with Brazil the government of that country had been granting a preferential reduction of 20 per cent in favor of eleven classes of American products, limited to one year, but subject to renewal upon aproval of the Brazilian Congress. These articles were as follows: Paints, wheat flour, pian s, condensed milk, scales, watches, clocks, manufactures of rubber, typewriters, windmills and refrigerators. Through the representations of the department the above list has been increased, so as to include the following additional classes, namely, cement, corsets, dried fruits, and school furniture and desks. Subsequently the Brazilian Congress passed an act granting authority to the Executive at his option to further increase the preferential list. Thus the way is now opened for representations to the Brazilian Executive as the needs of commerce may develop for requesting the application of the preferential to additional commodities. COUNTERVAILING DUTIES IMPOSED. In accordance with the provisions of the Payne Tariff law relating to countervailing duties on wood or wood pulp, the Treasury Department ruled on June 9, 1910, that pulp and printing paper manufactured from wood cut on crown lands in the province of Quebec, prior to May 1, 1910, was subject to the countervailing duty of 25 cents per cord or its equivalent of 35 cents a ton in the manufactured state, as print paper, Quebec having issued regulations requiring that wood cut after May 1, 1910, should be manufactured within that province. These regulations were regarded as a prohibition of the exportation of wood cut after that date. The Treasury Department on June 15, 1910, having learned that the export duty on pulp wood from Finland, suspended in 1909, was reimposed from May 15, 1910, imposed a countervailing duty on imports of wood pulp and printing paper from Finland equal to the export duty imposed by Finland. This countervailing duty will amount to 44 cents on each 2,000 pounds of mechanically ground wood pulp. NEWFOUNDLAND FISHERIES ARBITRATION. The International Court of Arbitration, sitting at The Hague, decided on September 7, 1910, the Newfoundland fisheries dispute between the United States and Great Britain, submitted under the provisions of the treaty between those two nations, signed on April 4, 1908, and ratified by the United States on February 18, 19.9. The object of the treaty was to obtain a definite interpretation of Article I of the convention between the United States and Great Britain signed at London on October 20, 1818, by decisions on the following seven questions: Question 1. To what extent are these contentions justified? It is contended on the part of Great Britain that the exercise of the liberty to take fish referred to in the said article, which the inhabitants of the Questions. United States have forever in common with the subjects of his BriSubmitted. tannic majesty, is subject, without the consent of the United States, to reasonable regulation by Great Britain, Canada or Newfoundland in the form of municipal laws, ordinances, or rules, as, for example, to regulations in respect of (1) The hours, days or seasons when fish may be taken on the treaty coasts; (2) The method, means and implements to be used in the taking of fish or in the carrying on of fishing operations on such coasts; (3) Any other matters of a similar character relating to fishing; such regulations being reasonable, as being, for instance; (a) Appropriate or necessary for the protection and preservation of such fisheries and the exercise of the rights of British subjects therein and of the liberty which by the said Article I the inhabitants of the United States have therein in common with British subjects; (b) Desirable on grounds of public order and morals; (c) Equitable and fair as between local fishermen and the inhabitants of the United States exercising the said treaty liberty and not so framed as to give unfairly an advantage to the former. It is contended on the part of the United States that the exercise of such liberty is not subject to limitations or restraints by Great Britain, Canada or Newfoundland in the form of municipal laws, ordinances or regulations in respect of (1) The hours, days or seasons when the inhabitants of the United States may take fish on the treaty coasts, or (2) The method, means and implements used by them in taking fish or in carrying on fishing operations on such coasts, or (3) Any other limitations or restraints of similar character: (a) Unless they are appropriate and necessary for the protection and preservation of the common rights in such fisheries and the exercise thereof; and (b) Unless they are reasonable in themselves and fair as between local fishermen and fishermen coming from the United States, and not so framed as to give an advantage to the former over the latter class; and (c) Unless their appropriateness, necessity, reasonableness and fairness be determined by the United States and Great Britain and the United States concurs in their enforcement. Question 2. Have the inhabitants of the United States, while exercising the liberties referred to in said articie, a right to employ as members of the fishing crews of their vessels persons not inhabitants of the United States? Question 3. Can the exercise by the Inhabitants of the United States of the liberties referred to in the said article be subjected, without the consent of the United States, to the requirements of entry or report at custom houses or the payment of light or harbor or other dues, or to any other similar requirement? Question 4. Under the provision of the said article that the American fishermen shall be admitted to enter certair bays or harbors for shelter, repairs, wood or water, and for no other purpose whatever, but that they shall be under such restriction as may be necessary to prevent their taking, drying or curing fish therein or in any other manner whatever abusing the privileges thereby served to them, is it permissible to impose restrictions making the exercise of such privileges conditional upon the payment of light or harbor or other dues, or entering or reporting at custom houses or any similar conditions? re Question 5. From where must be measured the "three marine miles of any of the coasts, bays, creeks or harbors" referred to in the said article? Question 6. Have the inhabitants of the United States the liberty under the said article or otherwise to take fish in the bays, harbors and creeks on that part of the southern coast of Newfoundland which extends from Cape Ray to Rameau Islands, or on the western and northern coasts of Newfoundland from Cape Ray to Quirpon Islands, or on the Magdalen Islands? Question 7. Are the inhabitants of the United States whose vessels resort to the treaty coasts for the purpose of exercising the liberties referred to in Article I of the treaty of 1818 entitled to have for those vessels, when duly authorized by the United States in that behalf the commercial privileges on the treaty coasts accorded by agreement or otherwise to United States trading vessels generally? The answers given by the court to the above questions were: Answer 1. The right of Great Britain to make regulations without the consent of the United States as to the exercise of the liberty to take fish, referred to in Article 1 of the treaty of October 20, 1818, in the form of municiAnswers of pal laws, ordinances or rules of Great Britain, Canada or Newfoundthe Court. land is inherent in the sovereignty of Great Britain. The exercise of that right by Great Britain is, however, limited by the said treaty in respect of the said liberties therein granted to the inhabitants of the United States in that such regulations must be made bona fide and must not be in violation of the said treaty regulations which are (1) appropriate or necessary for the protection and preservation of such fisheries, or (2) desirable or necessary on grounds of public order and morals, without unnecessarily interfering with the fishery itself, and in both cases equitable and fair as between local and American fishermen, and not so framed as to give unfairly an advantage to the former over the latter class, are not inconsistent with the obligation to execute the treaty in good faith, and are, therefore, reasonable and not in violation of the treaty. Reasonable For the decisionn of the question whether a regulation is or is not reasonable, as being or not being in accordance with the dispositions of the treaty and not in violation thereof, the treaty of 1818 contains no special provision. The settlement of differences in this respect that might arise thereafter was left to the ordinary means of diplomatic intercourse. By reason, however, of the form in which Question 1 is put, and by further reason of the admission of Great Britain, by her counsel before this tribunal, that it is not now for either of the parties to the treaty to determine the reasonableness of any regulations made by Great Britain, Canada or Newfoundland, the reasonableness of any such regulation, if contested, must be decided, not by either of the parties, but by impartial authority in accordance with the principles herein above laid down, and in the manner proposed in the recommendations made by the tribunal. In virtue of Article IV of the agreement, the tribunal further decides that Article IV of the agreement is, as stated by counsel of the respective parties at the argument, permanent in its effect and not terminable by the expiration of the general arbitration treaty of 1818 between Great Britain and the United States. Answer 2. In view of the preceding considerations, this tribunal is of the opinion that the inhabitants of the United States, whle exercising the liberties referred to in the said articles, have a right to employ as memForeign Crews on bers of the fishing crews of their vessels persons not inhabiAmerican Vessels. tants of the United States; but, in view of the preceding considerations, the tribunal, to prevent any misunderstanding as to the effect of its award, expresses the opinion that noninhabitants employed as members of the fishing crews on United States vessels derive no benefit or immunity from the treaty, and it is so decided and awarded. Answer 3. The requirement that an American fishing vessel should report, if proper conveniences for so doing are at hand, is not unreasonable, for the reasons Reporting to stated in the foregoing opinion. There should be no such requirement, however, unless there be reasonably convenient opportunity afforded to report, in person or by telegraph, either at a custom house or to a customs official; but the exercise of the fishing liberty by the inhabitants of the United States should not be subjected to Customs Officers. |