States government in regard to commercial matters at the present time, and that consequently, in accordance with diplomatic usage, he was not in a position to discuss them. He wanted the house to know, however, the spirit (geist) in which these negotiations were being conducted. Germany's commercial relations with the United States rest upon the treaty between the United States and Prussia of 1828, and the similar treaty with the Hanse Towns of about the same date. He discussed in detail Articles V. and IX. of this treaty, explaining the different interpretations given to them by the two governments concerned. He referred to the treatment of German sugar under the Dingley tariff and stated that German representations in the matter had been so far successful that the indirect export premiums upon sugar exported from other countries were now considered by the American customs officials. He then referred to the question of tonnage dues, reciting the action of our government in 1888 and the reversal of the same in 1896, adding that there appeared to be some probability that this question would be regulated by legis lation in the United States. He further stated that the German government had repeatedly informed the American government of its views in these matters, in regard to the refusal to accord to Germany the benefits of the recent agreement with France and the action of the American customs officials in regard to exports from Germany. In his opinion it is probable, in view of the increasing exportation of American goods to Germany, that the friendly discussion now going on will have a satisfactory result, and consequently he expressed the hope that the house would show that it had confidence in the government." Mr. White, amb. to Germany, to Mr. Hay, Sec. of State, Feb. 13, 1899, See Mr. Hay, Sec. of State, to Mr. White, amb. to Germany, Feb. 28, 1899, "Reduced to a few words, it appears that Germany's griveances against the United States arise, practically, from the prevailing difference of interpretation of the meaning of the most-favored-nation clause in the treaty with Prussia of 1828. Count Posadowsky referred to this treaty and the commercial treaties with the Hanse Towns of about the same date (mentioning casually that almost all German exportations to America went by way of these Towns,') as being recognized by Germany as fully in force. He said that practically the question was this: Either Germany should enjoy all the commercial benefits accorded by the United States to any third country, whether under reciprocity treaties or not, and unrestricted most-favored-nation treatment should prevail, or it must be con sidered that restricted (beschränkte) most-favored-nation treatment should prevail, and that Germany had made a mistake in according to us without concession the benefits of the seven Caprivian treaties of commerce, which were based upon reciprocal concessions. He considered that the most-favored-nation clause had been violated by us when we first put a differential duty upon sugar exported from bounty-paying countries, that it had been further violated when this duty was made compensatory, and still further when we declined to accord to Germany gratuitously the benefits of the recent commercial convention with France, which we have accorded to Switzerland. The value of this last to us he estimated as only about $200,000, while it touched Germany in a particularly sensitive place, as she felt that her 'right' had not been recognized. "Count Posadowsky was much interested in learning that American products imported into Cuba and Porto Rico and Cuban and Porto Rican products imported into the United States were treated in the same way as imports from any other country, and agreed with Mr. Porter in the hope that better times in America would increase the importation of German products. The practical question, however, he said, was whether Germany should continue in her understanding of the meaning of most-favored-nation treatment, or should adopt that of the United States and decline for the future to accord us the advantages of the Caprivian commercial treaties." Mr. White, amb. to Germany, to Mr. Hay, Sec. of State, March 27, 1899, "Your dispatch No. 804, dated March 27, 1899, communicates the views of Count Pasadowsky, minister of the interior, respecting the interpretation of the most-favored-nation clauses of our treaty. It may be convenient to you to recall a previous occasion when the subject was discussed on the part of Germany. "The question appears to have arisen between Germany and Hawaii in 1878, as a result of the reciprocity convention of 1875 between the United States and Hawaii. The Hawaiian special envoy to Berlin, Mr. Carter, discussed it at that time, and reported to his government that an article was framed by which it was agreed that the special advantages granted to the government of the United States in consideration of equivalent advantages should not in any case be invoked in favor of Germany.' (See Foreign Relations of United States, 1878, p. 403; also pp. 382 and 405.) "While we do not deny the right of Germany to adopt the same construction which controls the action of this government, it should be remembered that whatever construction is adopted it must be applied uniformly to all governments whose interests are protected by the like treaty clauses. Otherwise Article XXVI. of the conven tion would be violated. If the compensatory privileges should be extended to any third nation, which has given no special compensation for them, it is evident that as to that nation the grant would be gratuitous, and, by the express provision of Article XXVI., ' shall immediately become common to the other party, freely.' "This point should not be overlooked in any serious discussion of the subject on the part of your embassy.. It is evident that Germany can not apply one construction in her relations with this government and another in her relations with an European governinent." Mr. Hay, Sec. of State, to Mr. White, amb. to Germany, April 8, 1899, The passage above quoted from Mr. Carter imperfectly conveys the pur- (2) GEOGRAPHICAL DISCRIMINATIONS. § 766. "On the 26th of June, 1884, the President approved 'An act to remove certain burdens on the American merchant marine and encourage the American foreign-carrying trade, and for other purposes.' This statute contained thirty sections, relating to inspection of vessels, shipping and discharge of seamen, the liabilities of shipowners, and sundry other kindred topics. Section 14 alone related to tonnage dues, but it provided a new system for levying them which radically differed from that formerly in force. "Section 14 provided that in lieu of the uniform tax of 30 cents a ton per annum previously imposed by law, a duty of 3 cents a ton, not to exceed in the aggregate 15 cents a ton in any one year, should be imposed at each entry on all vessels which should be entered in any port of the United States from any foreign port or place in North America, Central America, the West Indies, the Bahamas, the Bermudas, the Hawaiian Islands, or Newfoundland; and that a duty of 6 cents a ton, not to exceed the old rate of 30 cents a ton per annum, should be imposed at each entry on all vessels entered in the United States from any other foreign ports or places. "It was, however, provided that the President should suspend the collection of so much of the 3-15 cents duty on vessels entered from any port in Canada, Newfoundland, the Bahamas, the Bermudas, the West Indies, Mexico, and Central America down to and including Aspinwall and Panama, as might be in excess of the tonnage and light-house dues, or other equivalent tax or taxes, imposed on American vessels by the government of the foreign country in which such port was situated. "In course of time claims were presented by the governments of Belgium, Denmark, Germany, Italy, Portugal, and Sweden and Norway for the 3-15 cent rate. These claims, excepting in the case of Sweden and Norway, were based upon provisions in treaties of those nations with the United States, by which the contracting parties mutually agree not to grant favors to other nations in respect to commerce and navigation which shall not become common to the other party, either with or without expression of equivalent concessions, as the case may be. "In the case of Sweden and Norway there was a further treaty stipulation, which reads as follows: "The two high contracting parties engage not to impose upon the navigation between their respective territories, in the vessels of either, any tonnage or other duties, of any kind or denomination, which shall be higher or other than those which shall be imposed on every other navigation, except that which they have reserved to themselves, respectively, by the sixth article of the present treaty.' (Article 8, treaty of July 4, 1827.) "Article 6 referred to coastwise navigation, which the contracting parties reserved to themselves, respectively. "The question of the conflict of the provisions of section 14 of the act of June 26, 1884, with our conventional obligations having been referred to the Department of Justice, the Attorney-General, on the 19th of September, 1885, gave the following opinion: "The discrimination as to tonnage duty in favor of vessels sailing from the regions mentioned in the act, and entered in our ports, is, I think, purely geographical in character, inuring to the advantage of any vessel of any power that may choose to fetch and carry between this country and any port embraced by the fourteenth section of the act. I see no warrant, therefore, to claim that there is anything in the most-favored-nation clause of the treaty between this country and the powers mentioned that entitles them to have the privileges of the fourteenth section extended to their vessels sailing to this country from ports outside of the limitation of the act." "This opinion was duly made known to the governments concerned. "In order to illustrate the views of those governments upon the matter, a passage may be quoted from a note of the German minister at this capital, of the 16th of February, 1886, as follows: 66.6 This rejection (of the claim of Germany) is based on the ground that that exemption, which is granted to all vessels of all powers sailII. Doc. 551-vol 5-19 ing between the countries in question (which enjoy the 3-15 cent rate under the act of 1884) and the United States, is purely geographical in its character, and can not, therefore, be claimed by other states under the most-favored-nation clause. "I am instructed, and I have the honor most respectfully to reply to this, that such a line of argument is a most unusual one, and is cal culated to render the most-favored-nation clause wholly illusory. On the same ground it would be quite possible to justify, for instance, a privilege granted exclusively to the South American states, then one granted also to certain of the nearer European nations, so that finally, under certain circumstances, always on the pretext that the measure was one of a purely geographical character, Germany alone, among all the nations that maintain commercial relations with America, notwithstanding the most-favored-nation right granted to that country by treaty, might be excluded from the benefit of the act. "It can not be doubted, it is true, that on grounds of a purely local character, certain treaty stipulations between two powers, or certain advantages autonomically granted, may be claimed of third states not upon the ground of a most-favored-nation clause. Among these are included facilities in reciprocal trade on the border, between states whose territories adjoin each other. It is, however, not to be doubted that the international practice is that such facilities, not coming within the scope of a most-favored-nation clause, are not admissible save within very restricted zones. This law (of 1884) grants definite advantages to entire countries, among others to those situated at a great distance from the United States; these advantages are, beyond a doubt, equivalent to facilities granted to the trade and navigation of those countries, even if they do, under certain circumstances, inure to the benefit of individual vessels of foreign nations. It scarcely need be insisted upon that these advantages favor the entire commerce of the countries specially designated in the act, since they are now able to ship their goods to the United States on terms that have been artificially rendered more favorable than those on which other countries, not thus favored, are able to ship theirs. "The treaty existing between Prussia and the United States expressly stipulates that "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 where it is freely granted to such other nation, or on yielding the same compensation when the grant is conditional." Such a compensation, so far as the reduction of the tonnage tax to 3 cents is concerned, has not been stipulated for by the United States in the aforesaid shipping act. Germany is, therefore, ipso facto, entitled to the reduction of the tax in favor of vessels sailing from Germany to the United States, especially since, according to the constitution of the Empire, no ton |