Article IV of the Treaty of Paris was not included in the original proposal of the American commissioners, but was granted as a concession after a prolonged debate over the disposal of the islands. A revision of the Philippine tariff was undertaken almost immediately, and as soon as a draft was prepared, it was sent to the War Department and from there distributed among American exporters with requests that suggestions be made. These suggestions indicated means of classifying goods so as to provide a concealed discrimination for American goods.14 Many of these suggestions were accepted. Colonel Edwards, Chief of the Bureau of Insular Affairs, said of it:15 "While no different duty in favor of American products is openly mentioned, the articles were so described in the tariff as to allow an advantage to American goods." The Ways and Means Committee in presenting a revision bill to Congress on February 13, 1905, said:16 The general purpose of the bill, as of the former Act, is to give the United States what benefits there are arising from classification of goods. There is no preference in rates given to goods coming from the United States for the reason that by the terms of the treaty of Paris Spain would have the right to a similar preference on goods imported from Spain to the Philippine Islands until January, 1909. Certain open preferences were also allowed on raw materials exported from the Philippines in which certain manufacturing concerns of the United States were interested. Upon the production of evidence of consumption in the United States, the Philippine export tax on hemp was refunded, and on copra, sugar, and 14 Sen. Doc. 171, 57th Cong., 1st Sess. tobacco the import tax was decreased by the amount of the export tax. The United States Tariff Act of 1909 established free trade between the Philippines and the United States with a few exceptions (which were practically all omitted from the Tariff Act of 1913); that is, no import duties were to be assessed on domestic products of either the United States or the Philippines when entering the ports of the other. Thus Congress definitely abandoned the open-door policy. For some years prior to 1909 there had been a few preferences to such Philippine products as sugar. The Philippine Tariff Act of August 5, 1909, enacted by the United States Congress, contains the rates of duty that are to be levied on imports in the Philippines from countries other than the United States. The tendency of this Tariff Act, it is said, was to exclude foreign competition with American products in the Philippines, and the Act was, therefore, opposed bitterly by some classes in the Islands. The preceding brief review of colonial systems indicates a variety of attitudes toward the open door in tariff making. In the colonies of Great Britain, The Netherlands, and Germany, from various motives, no preferences were established in favor of the mother country, and colonial goods were accorded the same treatment as foreign goods in the markets of the mother country. Spain, Italy, France, and the United States have, on the other hand, pursued a policy of preferences, and have endeavored to direct trade to their own advantage by means of discriminatory rates. This should not be taken as a classification of "saints and sinners." The adoption of the open door in tariff legislation is not necessarily evidence of a liberal position. Germany adopted it at the same time that her Colonial Secretary, Dernburg, was saying that colonies are "an instrument of commercial policy." The open door has been a policy favorable to the world-wide trading interests of Great Britain, and in order to be in a position to urge it elsewhere, she necessarily had to adopt it in her dependent colonies. The Netherlands in spite of their open-door policy have managed by other means-for example, shipping to retain the greatest share of the trade of their colonies. Nevertheless, the principle of the open door is the correct one, and the international conferences and the agreements that have proclaimed it are precedents for future action. The open-door principle is the antithesis of the policy that colonies exist for the exclusive benefit of the mother country. It recognizes the interests of outside nations and of the colony itself. Colonies should not be "an instrument of commercial policy." Too frequently they are so regarded. The open door in import tariffs is desirable, but no more desirable than the open door in export tariffs, navigation, and investment. Nations that congratulate themselves on equality in tariff matters may, nevertheless, so bar and bolt the door in other fields that it makes little difference whether the door is opened or closed in the tariff schedules. Colonial monopoly can be maintained by navigation laws, by Government ownership and control of lands and companies, by exclusive trading concessions, and by restrictions on investment. If there is one thing that the war should end forever, it is colonial monopoly and the exploitation of outlying parts of the world by nations that control them politically. The defeat of Germany and the breaking up of the Russian and Turkish Empires have greatly increased the areas for which the Allied Powers will have to provide administration. Central Africa, Asia Minor, Syria and Mesopotamia, and parts of the Russian Empire must not be permitted to become the exclusive trade and investment preserves of any power. Colonies should be regarded, and are regarded by the most advanced nations, as trusts which they are called upon to administer. Preferences enjoyed by the trustee are inconsistent with the trusteeship. CHAPTER XVI PREFERENCES AN INTERNATIONAL PROBLEM Economic effect of tariff preferences - Spirit in which the problem should be approached - Undesirableness of discriminatory treaties between nations Of tariffs favoring the mother country in dependent colonies - Of British preferential tariffs - Necessity for international agreement Concealed discriminations - Possible grounds for exception to the rule of equality of treatment- An International Tariff Commission proposed - Its powers and duties. "Equality of trade conditions"" can be achieved only by the removal of discriminatory economic barriers such as special reciprocity treaties, preferential arrangements, and tariffs that establish lower rates for the goods of colonies and the mother country than are paid by foreign goods. Such discriminations obviously involve world interests; they are, therefore, subjects for international discussion, and perhaps decision. No doubt their economic value to the favored nation and their material injury to the excluded nations have been exaggerated. Nevertheless, the nations discriminated against are aggrieved. Whether rightly or wrongly, they think they are injured. Suspicion arises. taliation is planned and put into effect. Trade wars follow, and bitterness and hostility are engendered between peoples. It can no longer be said that a special discriminatory treaty between two peoples is their concern alone. Nor can it be said that preferences between Re 1 President Wilson in his address to Congress on January 8, 1918, advocated, as the third of his 14 points, "the removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all nations consenting to the peace and associating themselves for its maintenance." |