of its reciprocity arrangement with Cuba, the United States could accept and utilize such portions of the bill. But the paragraphs beginning at lines 19 and 24 of page 280 and line 5 of page 2811 clearly specified that the imposition of any duty with respect to products imported from or exported to the United States, which duty was not equally enforced with respect to every other country, would render the imposing country liable to the additional duties provided for. Mr. Lodge finally came to the conclusion that the clauses in question, as worded, "would include a reciprocity treaty". That, he was sure, could not be the intention. Mr. Walsh then invited attention to the language of another clause which he believed to be open to the same objection as existed to the clauses containing the words "not equally enforced". Referring to the clause beginning with the word "discriminates" (page 281, line 9) he pointed out that a country failing to accord equality of treatment would be subject to additional duties just as a discriminating country (lines 15-17). (d) The Meaning of Section 317 with respect to Intra-imperial Preferences In the course of the discussion of the application of the additional duties provided for in Section 317 to countries discriminating against the United States in return for reciprocal concessions from the favored country, some mention was not unnaturally made of the possible application of the additional duties to discriminations resulting from preferences granted by certain portions to other portions of the same empire. The Chairmen of the Finance and Foreign Relations Committees appeared to consider the additional duties inapplicable in such cases, at least if the imperial 'The text of Section 317, as then pending, with the lines numbered, is contained in the footnote beginning on p. 76. preferences were reciprocal. That the mere fact of membership in the same empire with the favored commonwealth did not under the terms of the bill affect the question of discrimination against the United States was, however, maintained by other Senators. In support of this position. Mr. Walsh quoted the definition of "foreign country contained in subdivision (j); on hearing which Mr. Lenroot remarked: "I believe that settles it." No mention was made of the preferences exchanged between the United States and the Philippines; hence the inconsistency of invoking Section 317 in such cases escaped comment. (e) Section 317 Altered and Accepted by the Senate The Finance Committee offered amendments to alter subdivision (h) so as to specify the Tariff Commission in place of "department or independent establishment of the Government" as the agency designated to discover and report actual instances of discrimination. In accordance with the conclusion reached in the debate on the applicability of Section 317 to discriminations resulting from reciprocal concessions, Senator Lenroot moved to strike out, on pages 280, all of lines 24, 25, and 26, and on page 281, lines 1 to 8, inclusive. Also on line 15, page 281, to strike out the semicolon and insert a period, and to strike out the remainder of the paragraph. That will leave it applying to all discriminations against the United States.1 Senator McCumber, fearing that the provisions remaining in the bill would be insufficient to protect from discrimination certain important commercial activities, moved to insert in line 11, page 281, after the word "any" the words " customs, tonnage, or port". 1 Op. cit., p. 11248. For line and page references see text, supra p. 76, note. All of the proposed amendments were acceded to without objection and the section as a whole was adopted as an amendment to the House Bill by a vote of 38 to 19. Senator Lenroot voted in the negative. Two Democrats joined the Republicans in the affirmative vote and 38 Senators were recorded as not voting. The alterations made by the Senate in the text of the Finance Committee's draft of Section 317 raise two interesting questions: First, was it reasonable to conclude that the word "discriminate" should be deprived of its ordinary meaning and interpreted in a special and limited way in a statute simply because the words "most-favored-nation treatment" are interpreted in a certain way when appearing in the treaties to which the United States is a party? In this connection it should be noted that the most-favored-nation clauses in treaties do not as a rule contain the word "discriminate ", though of course their object is to prevent unequal treatment. It seems somewhat remarkable, moreover, that no Senator appears to have been cognizant of the fact that the American interpretation is peculiar and almost unique, and that, by the generally accepted interpretation, an agreement to grant most-favored-nation treatment would be violated by exclusive concessions to a third country even though such concessions were accorded in return for reciprocal and equivalent concessions. Without attempting to answer the question raised, it may at least be suggested that the position taken by the Senators appears a bit strained and unnatural. Second, in view of the nature of the clauses stricken from the Finance Committee's draft, why was the second paragraph of subdivision (b)-page 280, lines 19 to 23-allowed to remain unchanged? The essential element of this passage appears to be that it places under the President's mandate to levy additional duties the imposition of charges upon American commerce that are not equally enforced upon like products of any foreign country. It refers to charges upon goods in transit or goods to be re-exported. The paragraphs stricken out appear to have the same essential element but refer primarily to customs charges. It is difficult to note any difference in principle, but the fact remains that transit and re-exportation dues are seldom if ever made the subject of reciprocity treaties. Moreover, the additional duties referred to in the paragraph that was retained are authorized only if the unequal charge upon American commerce is "unreasonable ". This limitation does not appear in the paragraphs that were stricken out. Neither of the considerations here noted were mentioned in the debate. 17. SECTION 317 IN THE CONFERENCE COMMITTEE. A comparison of the text of Section 317 as it was adopted by the Senate with the text as enacted into law, quoted in the opening pages of Chapter I, reveals the fact that the section was subjected by the Conference Committee of the House and Senate to a careful revision as to language but was not greatly changed as to meaning. The operation of defensive duties was made to depend upon a finding by the President that they would serve the public interest. "Discriminates" was changed to "discriminates in fact" in the statement of the circumstances which would make the defensive duties applicable. The additional duties were, by the former draft, to become effective on a date to be named in the President's proclamation; the final draft specified thirty days after the date of the proclamation. The subdivision relating to benefits accruing to industries in third countries from discriminations against the United States was considerably amplified. The report of the Conference Committee, so far as Section 317 was concerned, received This text is set forth in Appendix 2. the concurrence of both houses; the tariff act went into effect on September 22, 1922. 18. THE POLICY OF THE HOUSE BILL REPLACED BY SECTION 317 There remains the task of contrasting Section 317 with the provisions for stimulating export trade contained in the bill as it passed the House. This suggests a summary of certain earlier developments. (a) Reciprocity Arrangements The idea of international trading for commercial concessions, commonly spoken of as "reciprocity ", held an important place in the international politics of the United States during the latter half of the nineteenth and opening years of the twentieth centuries. It continues to have many advocates and to be of moment in tariff discussions. The first American commercial treaty, that concluded with France in 1778,1 made the most-favored-nation treatment which the parties pledged to each other contingent, in case a concession should be made by either party for a price, upon the payment by the other party of a similar price, thus leaving the way open to the United States for the conclusion of reciprocity treaties with other countries without automatically incurring the liability to extend their concessions to France. Special reciprocity treaties providing for mutual concessions were entered into with Canada in 1854, with Hawaii in 1875 and with Cuba in 1902. The first was abrogated by the United States and terminated after being in effect eleven years. The second was continued in effect until the annexation of Hawaii. The third is still in effect. Negotiations 1 See text of Article II, infra, subdivision 36. 2 'See infra, subdivision 46. The dates given are the dates of the conclusion of the treaties, not of their coming into effect. |