manufactured products to those countries remains, because our protective tariff inflicts what, owing to the increased cost of manufacture, is in effect an export tax upon our products, which frustrates the efforts of our enterprising and inventive people to have more complete possession of the neighboring markets upon this continent."

ARGUMENTS FOR RECIPROCITY.

It was not until May 6, 1886, that Senator Frye's bill, before alluded to, was reported to the Senate by the Committee on Foreign Relations. Its provisions were very like those of the McCreary bill. It was accompanied by a still more elaborate report than that in the House, which report included the reports made from time to time by the commissioners who had visited the Central and South American countries. This report, or, rather, these reports, left little to be added upon the propriety of an international conference, and the necessity for reciprocity in trade and commerce. We first use the language of Commissioner Thacher:

"The peculiarities of the Latin race in America lead it away from manufacturing pursuits. Valencia centuries ago imported wool from England and returned it in cloths, but the process is now reversed.

"Great Britain manufactures for the world, and Spain, with all the colonies she planted, contributes to her commercial supremacy.

"In Spain there is cheap fuel and plenty of water-power. In Spanish America, from Mexico to Magellan, there are few coal-fields, but almost everywhere flowing streams, furnishing the cheapest and most abundant power.

"Guatemala, Costa Rica, the western slopes of the Andes, Uruguay, and portions of the Argentine Republic have un

failing and enormous stores of this easily-used motor. Yet in Costa Rica I saw only two water-driven mills; in Guatemala there were a few more; yet not one-thousandth part of the water-power was utilized. The Rimac for nearly 70 miles is a dashing cascade, with only a tannery, a brewery, and possibly a few other industries at Lima holding in check for a few minutes its rushing flood.

"Chili in the Mopocho and the Maipo has powerful streams, and hundreds of smaller water-courses find their way to the ocean.

"The report from Uruguay calls attention to its internal water-power, and the statements submitted with the report from the Argentine Republic show how immense is the water-power in the Gran Chaco region.

"We must conclude, then, that the want of manufactured products in these countries grows out of either or both of two causes; the one a disinclination to take up the patient, steady routine of daily toil necessary to successful manufacturing, and the other a greater profitableness in other more congenial pursuits.

"Without dwelling on the point, I may say that it is safe to aver that these countries will for years be great consumers of foreign manufactured goods.

"In Chili the war with Peru demoralized the soldiers, n.any of whom were taken from the ordinary pursuits, and, returning from their conquest, failed to take up the peaceful avocations they left; and yet Chili is beyond doubt in manufactories the New England of South America. The special report on this country fully covers this question.

"In any trade relations we may establish with those countries we may reasonably count on the permanence of the demand for our goods.

"The larger portion of the commerce we are seeking has

been in the hands of Great Britain, but of recent years another, and what promises to be a more formidable rival, has come to the front.

"The German manufacturers, intrenched behind encouraging and protecting legislative walls, have pushed their products far beyond the home demand. Always sure of their own market without competition, they have turned their unflagging energies to secure centers of trade in the Western Hemisphere. They are clever imitators of every new invention, of every improved machine, and of many of the most useful and popular goods produced in the United States. They send out counterfeits of the famous 'Collins' wares, even to the very brand; they make mowers and agricultural implements as nearly like ours as possible. Our sewing-machines are copied by these people, and the imitations are palmed off on the South American trade as coming from the United States. The character and ways of these new rivals for the trade of our neighbors is thus graphically portrayed by our former consul-general in Mexico, Mr. Strother, and I may add that what the German is in Mexico he is in all the other Central and South American nations.

"General Strother says:

"For the rest it will still remain with American manufacturers and merchants to solve the question of successful competition with their European rivals, the most formidable of whom at present are the Germans, whose commercial establishments are more substantially planted and more widely extended than those of any other foreign nation. And it may be well here to note their methods and the causes of their success. The German who comes to Mexico to establish himself in business is carefully educated for the purpose, not only in the special branch which he proposes

to follow, but he is also an accomplished linguist, being generally able to converse and correspond in the four great commercial languages-German, English, French, and Spanish. His enterprise is usually backed by large capital in the mother country. He does not come to speculate, or inflated with the hope of acquiring sudden fortune, but expecting to succeed in time by close attention, patient labor and economy, looking forward twenty, thirty, or even forty years for the realization of his hopes. He builds up his business as one builds a house, brick by brick, and with a solid foundation. He can brook delays, give long credits, sustain reverses, and tide over dull times. He never meddles with the politics of the country; keeps on good terms with its governors, whoever they may be. He rarely makes complaints through his minister or consul, but if caught evading the revenue laws, or in other illegal practices, he pays his fine and goes on with his business. With these methods and characteristics, the German merchant generally succeeds in securing wealth and the respect of any community in which he may have established himself.'

"In a conversation with the British minister, Sir Spencer St. John, in Mexico, he observed to me that the success of the Germans in dealing with the revenue officials and in pushing their trade had driven out of Mexico every wholesale English house, whereas the foreign commerce was once largely in the hands of his countrymen.

"In passing from this point we must not forget that notwithstanding all this copying of our productions by the German manufacturer, yet the deception deceives few, and that were the markets open to our dealers the superior material, workmanship, and fidelity of our goods would defy all competition.

"The French, equally protected by home legislation and

alive to the wants of the South American markets, are increasing their trade there.

"Indeed we must meet in the ports of our neighbors the wares of many of the European countries, all of which are borne to their destination in vessels flying their own national ensign."

FURTHER ARGUMENTS.

Mr. Reynolds, another of the Commissioners, discussed the reciprocal trade idea still more ably and exhaustively, and in fact left the matter in such shape as that the system of practical reciprocity incorporated into the Act of 1890 was the inevitable outcome of his logic. He says:

Among the means to secure more intimate commercial relations between the United States and the several countries of Central and South America, suggested in the first report of the Commission to those States (transmitted by the President to Congress on February 13, 1885, and printed as Ex. Doc. No. 226), were the following (p. 4): 'Commercial treaties with actual and equivalent reciprocal concessions in tariff duties.' As the words 'actual and equivalent, were adopted at my suggestion, an explanation of their full force may not be superfluous. A stipulation in a treaty that certain products of one country shall be admitted free, or at a reduced duty, into another country, may, on paper, appear to offer a reciprocal concession for a like admission of certain other products of the latter country into the former. But the seeming effect of it may be neutralized in various ways, so that it will be, to the one country or the other, not an actual concession. Chief among those ways are, the existence of treaties with other nations, placing them on the footing of the 'most favored nation,' export duties, home bounties, drawbacks, monopolies, and muni