have indicated our purpose to monopolize their carrying trade by means of our navigation laws. We have established the principle and begun the practice of tariff discrimination against them. We have taken steps toward the monopolization of their commerce. It needs but the development of this practice to erect complete the old colonial system of oppression.

We cannot dispose of this matter by an appeal to the love of liberty and justice imbedded in the American social constitution. It is not necessary to postulate sinister designs on the part of our legislators or the dominant party in order to account for the results thus far, or to justify a gloomy view of the future. These conditions which have been established were not the result of deliberate design. They were the inevitable outcome of the conditions. It is in this fact that the danger lies. These conditions sprang naturally, not from the collusion, but from the clash, of selfish interests. Congress faced, before the acquisition of the islands, two determined factions. On the one hand were the exporting industries demanding government action to secure concessions for their products in markets abroad. On the other stood the protected interests clamoring against concession to foreign goods at home. So long as we possessed no subject territory, the logical result was high protection and reciprocity— a measure of concession to both parties. But the moment that we came into possession of subject territory, a new condition was created. The logical result now was free entry of our goods into the subject territory to satisfy the first faction and a tariff against the goods of the dependency to satisfy the second; in other words, the transformation of the tariff into an instrument of imperialistic exploit.

Given the conditions, this result was inevitable. To be sure, this process has not as yet gone far in practice. But the great danger is that what has thus far resulted from a blind struggle of opposing interests, mainly for self-protection, may be carried forward by design. This blind struggle has shown the importing and protected industries how to reconcile their interests to their mutual advantage. They have only to unite on imperialism and the tariff to secure at once cheap raw materials and exclusive

markets, while retaining the coveted monopoly of the home market. Sooner or later, imperial conquest, with such advantages, is bound to result in the dream of the self-sufficing economic unit, within which, by means of a tariff about the whole empire, unlimited markets can be had without a life-anddeath struggle with well-equipped competitors. With the cherishing of this dream, what at first resulted from the blind struggle of opposing interests becomes a conscious object of pursuit. This explains the frequent concurrence in the world's history of the high protective tariff and imperialism. This explains also the struggle now going on in Europe between Germany, Russia, Italy, and France for the control of the remote corners of the earth. It is toward this fatal mælstrom that we have been

drifting.

UNIVERSITY OF CHICAGO.

R. F. HOXIE.

GERMAN-AMERICAN "MOST FAVORED NATION"

RELATIONS.

I. EARLY GERMAN-AMERICAN TREATY RELATIONS.

GERMAN-AMERICAN legal relations first found expression in the commercial treaties of 1785, 1799, and 1828 between the United States and Prussia, and of 1827 between the United States and the Hanseatic republics of Hamburg, Lübeck, and Bremen. These treaties purport to establish "a firm, inviolable, and universal peace and sincere friendship" between the contracting parties and to guarantee "a reciprocal liberty of commerce and navigation," as well as the rights of the "most favored nation" in their commercial relations with one another. These rights of the most favored nation are defined in Arts. V and IX of the Prussian treaty of 1828. The former reads as follows:

No higher or other duties shall be imposed on the importation into the United States of any article the produce or manufacture of Prussia, and no higher or other duties shall be imposed on the importation into the kingdom of Prussia of any article the produce or manufacture of the United States, than are or shall be payable on the like article being the produce or manufacture of any other foreign country. Nor shall any prohibition be imposed on the importation or exportation of any article the produce or manufacture of the United States, or of Prussia, to or from the ports of the United States or to or from the ports of Prussia which shall not equally extend to all other nations (Art. V).

Art. IX states:

If either party shall hereafter grant to any other nation any particular favor in navigation or commerce, it shall immediately become common to the other party, freely, when it is freely granted to such other nation, or on yielding the same compensation, when the grant is conditional.

Similar treaties were negotiated between the United States and Hanover (1840 and 1846), Oldenburg (1847), and MecklenburgSchwerin (1847), so that at the time of the formation of the present German empire, most-favored-nation agreements existed between the United States on the one hand, the German states of Prussia, Oldenburg, and Mecklenburg-Schwerin (Hanover having been absorbed by Prussia in 1866), and the Hanseatic cities of Bremen, Hamburg, and Lübeck.

II.

APPLICABILITY OF EARLY TREATIES TO THE EMPIRE.

With the inauguration of the new imperial government in 1871 the relation of these several treaties to the United States and to the empire naturally suggested itself. It appears, however, at first, when GermanAmerican commercial relations were of comparatively less importance, that the Prussian treaty of 1828 was tacitly regarded by both the American' and the German governments as applicable, not only to Prussia, but to the entire German empire, and a similar interpretation was applied to the Bancroft naturalization treaties of 1868 between the United States and the North German Confederation, Bavaria, Würtemberg, and Hesse.

3

As German-American relations became more important, and therefore more conflicting, this interpretation did not stand the test of practical politics. The imperial government, finding the returning American citizen of Alsatian birth a disturbing factor in Alsace-Lorraine, denied in 1880 the applicability of the Bancroft treaties to the "Reichsland," although Mr. White, at that time the American minister at Berlin, showed very clearly that Germany had tacitly recognized this interpretation for nearly ten years. On the other hand, the German government has, in late years, shown more and more a tendency to emphasize the applicability of the Prussian treaty of 1828 to the empire, while the American government has, at the same time, been equally emphatic in denying this claim and in asserting that the treaty regulates only the commercial relations between the United States and Prussia, although this interpretation does not apparently affect more advantageously the economic interests of the former.*

III. GERMAN AND AMERICAN MOST-FAVORED-NATION CONCEPT.

Another point in the discussion which needs elucidation is the difference of views held by the two governments as to the content of the most-favored-nation right. From the first it has been the uniform Consult United States Minister Kasson's discussion with Bismarck (F. O. No. 11, October 28, 1884), referred to by Secretary of State von Marschall in his speech in the Reichstag on May 8, 1897.

I

Secretary Gresham stated in 1894 (Foreign Relations, p. 237) that "the stipulations of these two articles (V and IX) placed the commercial intercourse of the United States and Prussia, not the entire German empire, on the most-favored-nation basis." Similar views are expressed by Secretary Olney (Miscellaneous Document, Senate, 52) and by Secretary Sherman on January 31, 1898.

3 Foreign Relations 1880-81, p. 441.

4 FISK, Handelsbeziehungen zwischen Deutschland und Amerika, p. 238.

principle of the United States that "a covenant to give privileges granted to the most favored nation only refers to gratuitous privileges, and does not cover privileges granted on the condition of a reciprocal advantage." In other words there is no opposition between a reciprocity arrangement with one country and a most-favored-nation agree. ment with another. In fact, this principle is not only expressly recognized in Art. IX of the Prussian treaty, but has also been incorporated in other German treaties, although her recognition of the principle has not been so consistently uniform as that of the United States. The imperial government distinguishes between an unrestricted (Art. V of treaty of 1828) and a restricted (Art. IX) most-favored-nation. agreement in her commercial relations with other countries. 3 The point is very clearly stated by the German writer Calwer in the following words:

Our relations with France are based upon an unrestricted most-favorednation agreement. According to the Frankfort treaty (1871) we must grant to France gratuitously every tariff concession made to England, Belgium, Holland, Switzerland, Austria, and Russia. In connection with this legal relation with France Art. IX of the Prussian-American treaty loses its entire meaning. There follows indirectly from this affirmation of the principle of reciprocity (i. e., Art. IX) the legal claim of the United States to unrestricted most-favored-nation rights. Since all advantages accrue to France without reciprocal compensations, such compensations can no longer be demanded of the United States.

In other words, Germany has placed herself in the position of being morally obliged to grant to the United States unrestricted most-favorednation privileges, while she can only claim restricted privileges in return. Nor could the United States grant other than these restricted rights without departing from her uniform policy and disturbing her mostfavored-nation relations with other powers. If we bear in mind these distinctions, it will aid us in understanding the legal relations existent between the German and American governments.

IV. AMERICAN-HAWAIIAN RECIPROCITY TREATY, 1875–78. The question came up for discussion in connection with the reciprocity treaty of 1875 between the United States and Hawaii. Germany showed a tendency to claim from Hawaii privileges similar to those granted to the United States. Mr. Carter, the Hawaiian com'WHARTON, International Law Digest, Vol. II, § 205.

2 HOLTZENDORF, Handbuch des Völkerrecht, Vol. III, § 205. CALWER, Die Meistbegünstigung der Vereinigten Staaten, p. 17.