the face of the thing the inconsistency is obvious and is aggravated by the treaty-bound exclusiveness of the reciprocal concessions. On the other hand there are many who hold that the relations between the United States and Cuba are so extraordinary as to justify an exception to the general rule of equality of treatment, which no government could of right refuse to recognize. These publicists point to the facts that Cuba is practically a bordering country; that the relation of the United States to Cuba is, indeed, not otherwise than that of guardian to ward; that morally the United States is bound to guarantee its welfare even to the extent of allowing special privileges in the American market, upon which its economic life in no small measure depends; that in return this country could hardly be expected to forego advantages in the Cuban market; that many nations which otherwise stand for equality of treatment make exceptions with respect to limitroph countries and countries having with each other ties that are peculiar and exclusive. 1 This line of argument finds its chief strength in the economic advantages of freer trade relations among nations, which arguments became particularly forceful when considered in connection with countries that border each other, and of which the products are such as to encourage exchanges, for instance, if one is an industrial, the other an agricultural country. To the average mind, however, steeped as it is in the more or less artificial conceptions of political relations, the argument that the United States is justified in special reciprocal arrangements with Cuba, but not justified in an arrangement similar in principle with the Philippines, would probably be lacking in persuasiveness.2 1See also, infra, subdivision 75(c). 2 For a statement by President Harding on the relation of Cuban reciprocity to the policy of unconditional most-favored-nation treatment, see infra, subdivision 54, footnote. 47. HAITI'S TREATMENT OF AMERICAN ROPE There remains one other example-almost too insignificant for mention of preferential treatment enjoyed by exports from the United States. Under a law enacted on August 20, 1908, the republic of Haiti provides for reductions in customs duties of twenty-five per centum on cordage and of sixty-six and two-thirds per centum on beer, when these articles are imported from the United States. At that time the Dingley Tariff Act, with its policy of bargaining for special favors, was still in effect. Germany had just entered into a reciprocity treaty with Haiti,' in accordance with the terms of which preferential rates of import duty were made applicable to a number of German products, including beer and cordage. Strong pressure brought to bear by representatives of the United States to obtain concessions for American products was effective only with respect to the two articles mentioned. The Dingley Act had ceased to exist within a year, the German treaty lapsed when Haiti entered the World War and beer for beverage purposes is no longer a lawful export from the United States. While the American Government cannot, of course, prevent the continuance of the preferential treatment of rope, any request for such continuance would be inconsistent with the policy of Section 317. 1 Signed July 29, 1908. Handbook, p. 556. sources at the beginning of this monograph.) printed in the Moniteur for Aug. 29, 1908. (See table of principal The law of August 20 is CHAPTER VII COMMERCIAL POLICIES BASED ON SPECIAL BARGAINING AND IMPERIAL PREFERENCE 48. INTERDEPENDENCE OF NATIONS In relentless disregard of the theories of isolationists, the fact remains that no nation can shape its policies, whether political or economic, without reference to the practices of other nations. The United States may be as one man in favor of equality in commercial relations. It may, consistently with its declared policy as set forth in Section 317 of its tariff law, accept its own definition of a country for tariff purposes and decree the Open Door in those of its insular possessions which maintain individual tariffs. It may abolish the provisos described in Chapter IV and penalize only such practices of other nations as discriminate against its commerce. But, having done so, the country would, in its efforts to establish the new commercial policy, be still confronted with certain entrenched practices which other countries have followed through years and decades or even longer, and in accordance with which their habits of doing business have crystalized. These practices have in many instances been ordained in accordance with carefully developed policies that are not to be readily overturned by outside pressure. In cases where these policies discriminate against American commerce the obvious step is the imposition of defensive duties in accordance with Section 317. If these defensive duties continue and are numerous they may, as has already been pointed out, become a sort of maximum tariff 204 [414 schedule. This would be especially true in the event that defensive duties on the same articles should be imposed with respect to several different countries. The result would be a de facto inequality of treatment by the United States, which inequality would not be less existent because justified by and dependent upon an inequality persisted in by other countries. Thus in the event of failure to achieve its purpose the imposition of defensive duties would, from the world point of view, augment the very evil of inequality which Section 317 is designed to allay. Yet to suppose that all other countries can be persuaded, either by negotiation or by the actual imposition of defensive duties or prohibitions under Section 317, to alter important national or imperial policies is to reckon confidently upon something that does not seem entirely probable. The existence of these counter-policies is distinctly a hindrance to the development of the new policy of the United States. The hostile policies may be conveniently divided into two classes: policies of special bargaining and policies of intra-imperial preference. Illustrative instances must suffice as the subject is too extended for full discussion.1 49. POLICIES OF SPECIAL BARGAINING The most conspicuous example of a national policy which bargains favors for favors, and consequently discriminates where there are no reciprocal concessions, is that of France. Following the treaty entered into with England in 1860, France developed a conventional tariff applicable to all coun 'The information contained in this chapter is taken largely from the United States Tariff Commission's reports on Reciprocity and Commercial Treaties and Colonial Tariff Policies. Specific references will not be made. [416 tries with which treaties had been put in force (the rates being generalized under the operation of the most-favorednation clause). The general (statutory) tariff remained and its schedules were applied to those countries to which no concessions had been made. As the commercial liberalism of the mid-nineteenth century, which, ironically enough, had been in France the autocratic policy of Louis Napoleon and was probably opposed by the people of the country, began to give way to the rising tide of protectionism which marked the closing decades of the century, French economic interests grew more and more impatient with the practice of reducing duties by treaty. The idea of a double statutory tariff began to be urged. Granted that some concessions might be made in return for favorable treatment by other countries, it was nevertheless insisted that the amount of such concessions should be fixed by the parliament. Diplomatic bargaining would thenceforth consist of offering the lower or minimum tariff schedule in return for whatever favors it could purchase. This idea was adopted in the tariff law of January 11, 1892; the rates of both schedules were subject to legislative alteration at any time. Thus tariff autonomy, as distinguished from the obligation to keep in effect tariff rates specially fixed by conventions or treaties with other countries, was achieved. The law provided that the minimum tariff might be applied to goods the produce of countries where French goods enjoyed equivalent concessions and were admitted at the lowest rates of duty. Before the final passage of the Act of 1892 a law was passed under which the Government was empowered to prolong the duration of the commercial treaties, except to the extent that fixed rates of duty were involved, and to apply the rates of the prospective minimum tariff, either wholly or partially, to the wares of those countries to which were |