the Zollverein, concluded in 1862 and expiring in 1877 (it only came fully into force in 1866), should be prolonged for ten years as from the date of negotiations-i.e., until May, 1881. Bismarck feared above all things a tariff war: "he would prefer to recommence the war of cannon rather than expose himself to a war of tariffs." The French above all things desired to be free to raise the customs duties and so finance the indemnity. Mutual most-favoured-nation treatment seemed to give both sides what they wanted-the French liberty, the Germans security. May explains Bismarck's negligence to extend the range of countries so enumerated in the treaty by the fact that "l'Allemagne n'avait pas de produits à importer qui pussent concurrencer ceux de ce pays. Elle n'avait donc rein à craindre de ce côté "-i.e., Germany exports did not compete with those of these non-included areas, consequently concessions made by France did not directly matter to Germany.

What have been the practical results of this clause in the period between the two wars, by which it was respectively produced and abrogated? We may distinguish four periods.

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(a) 1871-79. Until the conversion of Bismarck to a protectionist policy in 1879, France enjoyed the benefits of the liberal trade policy pursued by the German Government. (Between) 1871-79 Germany continued her liberal economic policy. The treaties with England, Belgium, Italy, etc., guaranteed numerous easements of intercourse, which were generalised by the most-favoured-nation clause. In addition there were autonomous tariff reductions. This state of affairs was a very favourable one for France, inasmuch as she was in many cases no worse off, but rather better off, than in the preceding years." 1

(b) In the second period, 1879-1892, Germany pursued an autonomous tariff policy on the whole, such treaties as she concluded being in the main simple most-favoured-nation ones without conventionalised tariff rates. France, therefore, gained nothing directly, since the German rates were not tied. Germany gained from any concessions made by France. Consequently in this period the main benefit accrued to Germany. In addition, the neutrals suffered, for France refused to extend to them privileges which she had also to

1 Sartorious von Waltershausen, op. cit., p. 113.

grant to Germany, whilst the greater the concessions made to gain admittance to the French market, the greater the benefit accruing to Germany also.1

(c) In the third period, 1892-1906, when the policy of Count Caprivi led to the conclusion of the Middle European Treaties by Germany in the nineties, whilst France swung over to the maximum-minimum tariff system, the boot was rather on the other leg, for France benefitted by the concessions obtained by Germany.

(d) In the fourth period, after the new tariff of 1902 in Germany, the position again altered, for the finer specialisation introduced into this tariff, and the introduction in some cases of categories of advantageously treated objects (on Belgian horses, Swiss cattle, etc.) which France could not produce, reduced the advantages of the extension to France of the concessions made in the conventional tariff to other countries.

Some evidence is furnished by the state of the balance of trade between the two countries. In the first period this was in favour of France, in the second of Germany, in the third of France, in the fourth of Germany again.2

The net effect of the clause cannot really be stated in terms of economics: its main effects have been political. It has stimulated the suspicion that Germany was preparing for France "an economic Sedan," and has, therefore, aided the protectionist reaction. Whether it would have been possible to have dispensed with any such clause altogether, is a very different matter: if we assume that some treaty relation was desirable in the economic interests of both countries, criticism must be concentrated upon the form of the clause rather than its content. The alternative would have been a terminable most-favoured-nation agreement, which would probably not have been withdrawn, just because it was terminable, and so dissociated from the humiliation involved in the permanence of paragraph XI. In that case, the de facto relations would have been the same, though the tariff relations of the two states would have been judged more au fond, and have been less coloured by political prejudice.. It is possible to argue that had the clause not been permanent,

1 Oncken, op. cit., pp. 596-7; von Waltershausen, p. 17.

2 Von Waltershausen, passim, who is, however, careful to warn against undue stressing of this factor.

Germany would not have pursued an autonomous policy after 1879. The fact that this policy had in any case to be abandoned proves that this step was inevitable. The only doubtful point. at issue is the rapidity with which the change would have come about. The question involves a consideration of the importance of the French market to Germany of the German market to France: of the growing political influence of the industrial party in Germany: and of the question, how far Germany could have obtained concessions from other countries which need not have been extended to France owing to the absence of any treaty relationship, and which would have compensated in part for any possible losses in consequence of such absence. 1

One again finds that the victors have taken advantage of the situation to impose tariff conditions which limit the autonomy in customs matters of the vanquished. Broadly speaking, in the case of Germany and Austria the Allies have insisted on non-reciprocal most-favoured-nation treatment for a limited period of time. Thus, by the Treaty of Peace with Germany (Part X., Economic Clauses, § I., chap I., Customs Regulations, Duties, and Restrictions), the latter country by Arts. 264-267 grants most-favoured-nation treatment in regard to import duties, customs regulations, excise duties, export duties, export prohibitions, importation, exportation, or transit of goods, to all the Allied and Associated States; by Art. 269 the 1914 conventional rates must be granted during the first six months after the coming into force of the present treaty," whilst "during a further period of thirty months after the expiration of the first six months, this provision shall continue to be applied exclusively with

1 Von Waltershausen believes that the losses to the trade of both countries would in any case have made it impossible for them to have conducted trade on the basis of their general tariffs, whilst political factors would have prevented France from concluding anything but a simple most-favoured-nation treaty. .. "I believe, therefore, that one must conclude that, if no permanent pure most favoured-nation treatment had been insisted on in 1871, one would have had to renew it from period to period." Writing, in 1915, as he did, von Waltershausen wished in the treaty of peace to maintain a provisional clause of the same kind, but desired the definitive tariff relations between the two countries to be dependent on the outcome of the tariff negotiations between the Central Powers. For, in the event of their granting one another preferential rights, it was undesirable, by the previous concession of most-favoured-nation treatment to other states, to have to grant these preferences to other states also.

regard to products which, being comprised in section A of the first category of the German customs Tariff of December 25, 1902, enjoyed at the above-mentioned date (July 31st, 1914), rates conventionalised by treaties with the Allied and Associated Powers, with the addition of all kinds of wine and vegetable oils, of artificial silk, and of washed and scoured wool, whether or not they were the subject of special conventions before 31st July, 1914." These obligations determine by Art. 280 "five years from the date of the coming into force of the present treaty, unless the council of the League of Nations shall, at least twelve months before the expiration of that period, decide that these obligations shall be maintained for a further period with or without amendments.' Bearing in mind that by Art. 26 of the Covenant of the League of Nations, decisions, except where otherwise expressly provided for," shall require the agreement of all the members of the League represented at the meeting," the question arises whether these stipulations are such as to lead to unanimity on the part of the members of the council. Since these provisions are non-reciprocal, they obviously represent directly a valuable commercial privilege for the Allied and Associated Powers. For that very reason also they weaken Germany's powers of obtaining concessions from other and neutral countries, except on onerous terms, for neutrals will naturally · point out that the value of concessions made to them by Germany will be much reduced by the large number of Allied and Associated Powers who will also benefit. Assuming that Germany finds it impossible to conclude any agreements with any neutrals, the value of the pre-cited clauses will be diminished for the Allies, also, and as neutral trade will suffer, the neutrals will hope to put an end to the preferential position of the Allies as soon as possible, for apart from the direct loss, they can no longer play off Germany against the Allies. Hence, in so far as the neutrals are represented on the council, the necessary unanimity is not likely to be obtained.1, 2, 3

1 At present only one neutral State is represented on the Council (Art. 4)— Spain.

For Austria, Part x., sec. 1, Chap. i., Arts. 217-221 of the Austrian Treaty. 3 Separate stipulations regulate the position of Alsace-Lorraine, Luxemburg, and Poland (German Treaty, Art. 268).

(2) Non-Autonomous Areas.-(a) Open-Door Areas.-The term "open-door area" is one of political and diplomatic origin, and one the exact use of which is still a matter of dispute.2 Thus, the two authorities referred to in note (1) differ from one another as to the precise meaning of the term, Schilder including in the concept the idea of extra-territoriality, which Grunzel rightly rejects, for an area may be autonomous in its general jurisdictional powers, and yet be an open-door area, a state of affairs which Schilder himself points out as evolving in Siam.3

There are two, and two essential features only, which distinguish the open-door area. Firstly, the tariff autonomy of the area is limited by irrevocable treaties. Secondly, the content of such treaties is such as to throw open the trade of the area on equal terms to all trading nations or, at any rate, to the signatories. Such treaties may also stipulate for a low range of customs duties, but this is not an absolutely indispensable feature of the situation though an alteration of the duties cannot take place without general agreement of all the Powers with whom treaties have been concluded. It is necessary to emphasise that fact that the open-door area is only bound to the signatories of the treaties to other states it is not bound, except it conclude special treaties with these, which are not necessarily based on the principle of equality.

1 The matters dealt with in this section have been dealt with by Schilder in his" Entwicklungstendenzen der Weltwirtschaft " (Chap. viii., also § 11 of Chap. v.). A somewhat less elaborate treatment will be found in Grunzel's "Economic Protectionism," Chap xi., § 3, “ Customs Districts wholly or partly Dependent."

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2 An investigation of the leading text-books on international law will show that the phrase does not appear in the indices of any of them, an exception to the general rule being J. Basset Moore's "Digest of International Law," but the phrase there occurs in connection with the attitude of the United States towards the partition of China.

3 Op. cit., p. 319.

4 Thus Turkey concluded special treaties with the Balkan States (Schilder, op. cit., p. 283); China has concluded special treaties with Russia and India as to the land frontiers, whilst the open-door position of the Congo Basin, based on the Berlin Act of 1886, and the Brussels Act of 1890, has recently been modified by the Convention of Saint-Germain-on-Laye of the 10th September, 1919, which only grants equality of treatment to the Signatory Powers, and to the adhering powers; the States which have a right to adhere being " States exercising authority over African territory, and other States, Members of the League of Nations, which were parties to either of the above Acts.". Subject to the condition of equality, the "States concerned reserve to themselves complete liberty of action as to customs and navigation regulations and tariffs to be applied in their territories." Thus, those enemy states," not members of the League of Nations, are ex