cipal or other local taxation. The skill of the diplomatist, aided by information from consuls, merchants, shippers, and other experts in the question, should be exerted to frame the treaty so as to prevent the defeat of its real object by such collateral disadvantages and burdens. To explain them, or point out modes of removing them, severally, would unduly extend the length of this letter.

'But one of them, the most favored nation clause,' deserves special consideration. It is understood that Great Britain, Germany, and probably other countries, claim that a reciprocity treaty with the United States by a Spanish American country applies to them, under that clause in their treaties with the last-mentioned country, with the same effect as if their names had been in the treaty instead of or along with that of the United States. For example, should the United States, resuming import duties on coffee, grant to Brazil freedom from them, on the reciprocal concession' that flour and certain American manufactures should be admitted free into that Empire, Great Britain, which consumes very little coffee of any kind, and probably none from Brazil, would claim the same freedom for her like manufactures. Thus, in return for our being customers of Brazil, in coffee to the amount of about $50,000,000 annually, Great Britain, offering no 'equivalent' concession in fact, would still be able to drive (or rather, keep) us out of the Brazilian market for those manufactures which she can supply more cheaply or with greater facility through her lines of steamers,

"After much thought on the subject, I have found no surer mode of making reciprocity 'equivalent' than by expressing in the treaty itself, and as a condition of it, the real object of every reciprocity treaty, the actual and equivalent increase of the commerce between the parties to it.

For

illustration, should the United States make a reciprocity treaty with Spain for certain concessions designed to increase our exports to Cuba, in consideration of a reduction of our duties on Cuban sugars, the treaty should provide, that that reduction should exist only as long as Cuba imported from the United States at least a certain fixed amount in value annually, and Spain might justly require a like condition as to the annual amount of our imports of Cuban sugars. The custom-house returns of the two countries would readily fix the respective amounts, and the reciprocity of the treaty, whenever it ceased to be actual and equivalent, could be suspended by a proclamation of the President, on due notice to be provided for in the treaty.

"As it is undeniable, and even generally admitted, that the most favored nation clause' entitles a country having the privilege of it to be merely on all fours' with any other nation, and share the advantages of it only on the identical conditions accompanying them, such a proviso as that above mentioned would effectually block the diplomatic game which Germany is understood to have played upon us in Mexico, by claiming for herself the benefits of our recent reciprocity treaty with that Republic. Taking, in fact, no sugar and little tobacco or anything else from Mexico, she sagaciously offers to remit her duties on them, and claims for her exports to that Republic, mainly in manufactures the same concessions it made to the United States in order to increase the exports of its own products to our country. With such a proviso as that above suggested, Germany would be beaten on her own diplomatic ground. Mexico would be obligated by the 'most favored nation clause' only to offer to Germany the same treaty, mutatis mutandis, her name taking the place of that of the United States. As her imports from Mexico would not compare with ours, such a

treaty would give her no actual advantage over us. So, also, with Cuba in her commerce with Germany, and probably, also, with Great Britain and France. No one of those countries (France and Germany making their own beetroot sugar, and Great Britain being supplied principally by her own colonies) would be able to take from Cuba the amount of sugars which would be the treaty 'equivalent' for the concessions made to the United States.

"Another important consideration in deciding what kind of a reciprocity treaty to make, or whether to make it at all, is the effect it would have on some equally advantageous indirect trade. By driving out of some South American market some other country which trades with us, we may diminish the purchasing power of that country in our own markets, and increased indirect trade with the former may not compensate us for a loss of trade with the latter. In this connection, the effect of several misused terms is to be deprecated. Generally when our imports from and exports to any particular country do not balance at all, the very bad English is common of speaking of a 'balance of trade' for or against us. It is refreshing to notice that in the reports of our Bureau of Statistics that improper phrase is discarded, and the difference between exports and imports is described as an excess of one over the other. An excess of imports over exports in a particular venture may represent a gain, and not a loss. A familiar illustration is that of a Boston ship which, in former times, would take a cargo belonging to the ship's owner, worth, say, $100,000, to China, and return with one, also belonging to the same owner, worth twice the amount. The difference, being the returns for the expenses of the voyage, the profit in China on the original venture, and that in Boston on the return cargo, would be all gain. The same may be the case with the entire com

merce of one country with another, as could be amply shown from the statistics of British trade with Asia, given in Mr. Frelinghuysen's letter on the Commerce of the world.' Of course, in some other special case it might be otherwise. "Another very general error is to treat an excess of imports over exports in our trade with a particular country as a difference which we pay in cash. This is rarely, if ever, the case. It is usually paid in exchange on some other country, obtained by selling to it our own products. Brazil affords a very fair illustration. We take from that Empire directly products many millions in value in excess of what we send directly to it. That excess is paid for by exchange on London, based on our exports of provisions, cotton, etc., and with that exchange the Brazilian pays for English manufactures to be sent to Rio. The indirect trade may be different. The Englishman may sell his manufactures in Brazil, convert the proceeds directly, or indirectly by purchase of exchange, into coffee, with the proceeds of which in New York he purchases provisions to be sent to England. In either case the result is the same. England gains some profit in exchange, as London is the world's money centre, and in freights which her ships carry. But to the extent to which England is crippled in her sales to Brazil, her purchasing power in our provision markets may be diminished.

"Therefore, before making a reciprocity treaty, we should carefully consider, in each particular case, whether, even with the profits in exchange and shipping in a direct trade, we may not be losing a more profitable commerce in a different direction, by diminishing the power of others of our regular customers to purchase products from us.”

A STILL FURTHER VIEW.

Mr. Curtis, Secretary of the Commission and afterwards a

Commissioner, added a very interesting report, which still further elaborated the necessity for reciprocal trade. He said:

"During the last twenty years the value of the exports from the United States to the Spanish Americans was $442,048,975, and during that time we purchased of them raw products to the amount of $1,185,828,579, showing an excess of imports during the twenty years amounting to $765,992,219, which was paid in cash. It will thus be seen that our commerce with Central and South America has left a very large balance on the wrong side of the ledger, while those countries have all the time been buying in Europe the very merchandise we have for sale. Being the very reverse of the United States in climate and resources, they constitute our natural commercial allies, and the exchange should at least be even; but they sell their raw products here and buy their manufactured articles in Europe. The principal reason for this is that the carrying trade is in the hands of Englishmen. The statistics show, that, of the total imports into the United States from Spanish America, which, in 1884, amounted to $159,000,000, three-fourths were carried in foreign vessels. Of our exports to those countries, amounting last year to $64,000,000, $46,000,000 were carried in American vessels, while only $18,000,000 were carried by foreign vessels. It will thus be seen that nearly everything we buy is brought to us from Spanish America by Englishmen, while nearly everything we sell we have to carry there ourselves. The logic of these facts is irresistible.

"The most absurd spectacle in the commercial world is the trade we carry on with Brazil. We buy nearly all her raw products, while she spends the money we pay for them in England and France.

"In 1884, of the exports of Brazil $50,266,000 went to