Chapter VII. The Tariff Act of 1897

At the time of the passage of the tariff act of 1894 nothing seemed more improbable than an early return to the policy of high and all-embracing protection. That policy, as embodied in the act of 1890, had met with apparently unquestionable rebukes at the polls in 1890 and 1892. Nor was there anything in the legislation of 1894 to invite a reaction. As we have seen, the act of that year, so far from being radical, had been, with the single exception of the free admission of wool, anxiously conservative. Once it was passed, the community heaved a sigh of relief and dared to hope that from this quarter at least there would be for a space no further cause of industrial uncertainty and disturbance.

If this reasonable expectation was disappointed, the explanation is to be found, not in any demonstrable change in public feeling, but in the complete overturn in the general political situation. Suddenly and unexpectedly, the tariff was shoved aside as the party issue, and the currency took its place. The stormy session of 1893, in which the silver-purchase act of 1890 had been repealed, foreshadowed the coming change; the commercial crisis of 1893, and the years of depression which followed, completed it with surprising quickness. Ever since the demoralizing days of the excessive paper issues of the civil war, periods of depression have favored the growth of the party of cheap money. The free-silver party, now the party of cheap money, found its hold strengthening in the South and West, and finally captured the Democratic organization. In the South, always the main seat of the political strength of the Democrats, the tariff question had for some time been holding its dominant place largely as a matter of tradition. The opposition to protection had been inherited from the political tenets of antebellum days, and the tariff issue was easily displaced by the new and burning question. The majority of the Democrats of the new generation were won to the free-silver side; the old leaders were contemptuously discarded; the political centre of gravity suddenly shifted. The Democrats being pledged defiantly to one side, the Republicans had no choice but to take the other. Thus the election of 1896 turned directly on the question of the free coinage of silver. The popular verdict was clear on that question, and on that only.

It was not to be expected, however, that the Republican party would desert its old faith, or turn suddenly with whole and single heart to the new issue forced upon it. For years—almost for generations—the Republicans had been fencing and compromising on the various phases which the currency question from time to time assumed. Moreover, the depression which set in after the crisis of 1893 made an opportunity for the apostles of high protection as well as for those of free silver. Both parties in the newspaper tariff controversy of 1890–94 had predicted a general rush of prosperity, the one from high duties, the other from low duties. As the years succeeding 1893 grew blacker and blacker, the stanch protectionists had the opportunity to cry: “We told you so; let us return to the policy of prosperity.” In the early part of 1896, before the silver question had forced itself to the front, the Republicans had resolved to stake the issue once more on protection; and it had accordingly been settled that Mr. McKinley was to be the party candidate for the Presidency. What might have been the outcome of a campaign in which the tariff was the single issue cannot be said; though the general conditions at the moment certainly were favorable to the party not in power. Fate willed it that the campaign centred on silver. But here, after all, the Republicans were on the defensive. As to the currency, they undertook only to maintain the status quo; while on the tariff, though it might be in the background during the campaign, they had resolved to take the offensive, and had engaged to legislate afresh at the first opportunity.

This difference in disposition as to the two problems became more pronounced when the smoke of battle cleared away, and the next move was in order. While the popular and electoral votes had been clearly for the Republicans, the complexion of the national legislature was not so altered as to give them a free hand on the currency. In the Senate they had no controlling majority without the aid of silver votes. On the currency question the party, as such, could do nothing,—certainly nothing without dissension and recrimination. But on the tariff question something could be done at once.

The occasion for action was the more urgent because of the state of the finances. For several years there had been a deficit in the current operations of the Treasury. The first fiscal year in which the balance had been on the wrong side was 1893–94; and then followed several years similarly unfortunate.¹ The very circumstance that the deficit appeared, and indeed had been most serious, while the tariff act of 1890 was still in force, indicated that it was due, not to the particular provisions of the act of 1890 or of its successor of 1894, but to the general industrial conditions of the period after 1893. The great crisis of 1893, itself the result of a complexity of causes, among which reckless monetary legislation was the chief, had been followed, as such revulsions must be, by a sharp falling-off in the imports and a consequent heavy decline in the customs revenue. The deficit which resulted was often alleged to be due to specially inadequate legislation in 1894. The act of 1894 had indeed failed to make rigorously careful provision for the needed revenue; but the same had been the case with the act of 1890, and was again the case, as we shall presently see, with that of 1897. The looseness of our federal legislation, so far as careful calculation of income and outgo is concerned, is an old and familiar phenomenon, the result partly of general political conditions and partly of the reliance on so variable a source of revenue as protective customs duties. But in partisan discussion, much was made of the failure of the act of 1894 to yield the revenue needed at the time; and at all events some measure of relief for the Treasury was called for.

Hence President McKinley, in calling the extra session of 1897, asked Congress to deal solely with the import duties and the revenue. The two questions of industrial policy and of legislation for revenue ought, indeed, to be considered separately. But in the history of tariff legislation in the United States, as in that of most other countries, they have been constantly interwoven; and so they were in this case. What with the undeniable need of revenue, the comparative ease with which party strength could be consolidated on the question of protection, the old predilection of all the leading spirits among the Republicans for that issue, and the clearly expressed wish of the President, the tariff at the extra session received exclusive consideration. Thus the first fruits of the election of 1896 were legislation, not on the question which had been uppermost in the campaign, but on the tariff question, on which no clear and unequivocal evidence of popular feeling had been secured.

The legislative history of the measure was instructive, and in some respects showed striking contrasts with that of its predecessor of 1894. In the House the bill was reported by the Committee on Ways and Means as early as Match 18th, within three days after the session began. This extraordinary promptness was made possible by methods that paid scant respect to the letter of the law. Strictly, so long as the new Congress had not met, no one was authorized to take any steps towards legislation at its hands. But, long before this, it was settled that Mr. Reed was to be once more Speaker, and he was able to intimate that the existing Committee on Ways and Means was to remain substantially unchanged in the next Congress; and, during the hold-over session of 1896–97, that committee accordingly was at work on the tariff bill, and was able to present it to the new Congress immediately on its assembling. Mr. Dingley, already chairman of the committee in the Fifty-fourth Congress (1895–97), was again to be chairman for the next; and his name was attached in popular discussion to the new measure which he was able to present with such celerity.

The action of the House was as prompt as that of its committee. Within less than two weeks, on March 31st, the bill was passed. Only a comparatively small part of it had been considered in the House: no more than twenty-two of the one hundred and sixty-three pages were taken up for discussion. In the main, the committee scheme was adopted as it stood, being accepted once for all as the party measure and passed under the pressure of rigid party discipline. The whole procedure was doubtless not in accord with the theory of legislation after debate and discussion. But it was not without its good side also. It served to concentrate responsibility, to prevent haphazard amendment, to check in some measure the log-rolling and the give-and-take which beset all legislation involving a great variety of interests. Under the iron rule of Speaker Reed, the House gave the session to the enactment of a deliberately planned tariff bill, and to that only.

In the Senate progress was slower, and the course of events showed greater vacillation. The bill, referred at once to the Senate Committee on Finance, was reported after a month, on May 8th, with important amendments. There was an attempt to impose some purely revenue duties; and, as to the protective duties, the tendency was towards lower rates than in the House bill, though on certain articles, such as wool of low grade, hides, and others (of which more will be said presently), the drift was the other way. The Senate, however, paid much less respect than the House to the recommendations of the committee in charge. In the course of two months, from May 4th to July 7th, it went over the tariff bill item by item, amending without restraint, often in a perfunctory manner, and not infrequently with the outcome settled by the accident of attendance on the particular day; on the whole, with a tendency to retain the higher rates of the House bill. As passed finally by the Senate on July 7th, the bill, though it contained some 872 amendments, followed the plan of the House Committee rather than that of the Senate Committee. As usual, it went to a Conference Committee. In the various compromises and adjustments in the Senate and in the Conference Committee there was little sign of the deliberate plan and method which the House had shown, and the details of the act were settled in no less haphazard fashion than has been the case with other tariff measures. As patched up by the Conference Committee, the bill was promptly passed by both branches of Congress, and became law on July 24th.

In what manner these political conditions affected the character of the act will appear from a consideration of the more important specific changes.

First and foremost was the re-imposition of the duties on wool. As the repeal of these duties had been the one important change made by the act of 1894, so their restoration was the salient feature in the act of 1897. On clothing and combing wool the precise rates which had been imposed in the tariff act of 1890 were restored. Clothing wool was subjected once more to a duty of eleven cents a pound, combing wool to one of twelve cents. On carpet wool there were new graded duties, heavier than any ever before levied. If its value was twelve cents a pound or less, the duty was four cents; if over twelve cents, the duty was seven cents.

In 1894, when the duties on wool were removed, the general expectation alike of the advocates and opponents of protection was that this change had come to stay. The political and economic probabilities in 1894 were such as to justify the expectation. The astonishing growth of all manufactures, uninterrupted before and after that date, made it certain that the United States under any tariff conditions would be a great manufacturing country, and seemed to warrant the belief that the desire for freedom in the use of materials would become stronger, the prospect of an expanding foreign trade more tempting, the demand for protection to domestic industries less insistent. The need of foreign wool for clothing the people of the United States and the inadequacy of the domestic supply were clear then, and indeed became more clear in the intervening years. In the woollen manufacturing industry itself it was to be expected with confidence that, once the transition to free wool accomplished, the manufacturers would oppose a return to the old régime. And, as it proved, the manufacturers expressed themselves in terms surprisingly strong on the disadvantages, from their point of view, of a return to the wool duties.² If, nevertheless, the change was made, the explanation is to be found mainly in the unexpected turn of the political wheel.

Wool is the article as to which it can be said with greatest truth and greatest plausibility that the farmer gets his share of the largesses of protection. It is true that in 1892 the farmers of Ohio and of other central States seemed to show that they were indifferent to the attraction; for in that year a whole row of central States had voted against the party of protection, and in Ohio itself the victory of that party had been so narrow as to be equivalent to a defeat. It is true also that the main effects of the duty on wool would certainly be to stimulate the activity and increase the profits of the large wool-growers in the thinly settled trans-Missouri region, rather than to benefit substantially the farmers proper.³ But the determination to give evidence of fostering care for the farming interest was too strong to be affected by such considerations. The silver party had posed ostentatiously as the special friend of the debtor and the farmer. The Republicans, having pushed forward the tariff as their first strong card, must needs do something for the farmer; and heavy duties on wool were the natural result, consistent at once with the established party policy and with the long-continued and earnest contention of President McKinley himself.

One other part of the wool duties served to show how the general political complications affected the terms of the tariff act. The duties on carpet wool, as has already been noted, were made higher than ever before. In the House the rates of the act of 1890 had been retained; but in the Senate new and higher rates were inserted, and, though somewhat pruned down in the Conference Committee, were retained in the act. They were demanded by the Senators from some States in the far West, especially from Idaho and Montana. These Senators, though Republican, were on the silver side in the monetary controversy, and so by no means in complete accord with their associates. They needed to be placated; and they succeeded in getting higher duties on the cheap carpet wools, on the plea of encouragement for the comparatively coarse clothing wool of their ranches. It had been shown time and again, on the very principles of protection, that carpet wools were not grown in the country, and that those imported did not affect to any appreciable extent the market for domestic wool. But the Western Senators, who held the balance of power, were able nonetheless to secure this concession to their demands. It deserves to be noted, on the other hand, that the Senate had been disposed to lower the duties on clothing and combing wool. The Finance Committee had proposed rates of eight and nine cents a pound, and the Senate itself had voted rates of ten and eleven cents; the reduction being due to the influence of the manufacturers, who were opposed to the high duties not only because of the price added on the raw material, but also because of the still higher duties on their own products which would be entailed.⁴ But in the Conference Committee the House rates of eleven cents on clothing wool and twelve cents on combing wool were restored, and so appeared on the statute book.

The same complications that led to the high duty on carpet wool brought about a duty on hides. This rawest of raw materials had been on the free list for just a quarter of a century, since 1872, when the duty of the war days had been repealed. It would have remained free of tax if the Republicans had been able to carry out the policy favored by the great majority of their own number. But here, again, the Senators from the ranching States were able to dictate terms. In the House bill, hides had still remained on the free list. In the Senate a duty of 20 per cent. was tacked on. The rate was reduced to 15 per cent. in the Conference Committee, and so remained in the act.

The restored duties on wool necessarily brought in their train the old system of high compensating duties on woollens. Once more we find the bewildering combination of ad-valorem duties for protection and specific duties to compensate for the charges on the raw material. In the main, the result was a restoration of the rates of the act of 1890.⁵ There was some upward movement almost all along the line; and the ad-valorem duty alone, on the classes of fabrics which are most largely imported, crept up to 55 per cent. Just thirty years before, in 1867, when the system of compound duties on woollens was first carefully worked out, it rested on the assumption that a “net” protection of 25 per cent was to be secured. But the ad-valorem rate, designed to give this net protection, had advanced steadily in the acts of 1883 and 1890, and in the act of 1897 reached 55 per cent.!

The experiment of free wool and of moderated (though but slightly moderated) duties on woollens, was thus tried under the act of 1894 for three short years, and these, moreover, years of great general depression. As has been already said, even under normal business conditions the transition from the system of high duties must have been for a while disturbing and trying, and the full effects of the change, alike for consumers and producers, could not have worked themselves out for several years.⁶ While the manufacturers had cheaper wool and unlimited choice in the use of it, they had to learn to avail themselves of this advantage. The wool-growers, especially in the central districts, had to face a fall in the price of wool, and had hardly time to make the change (more or less inevitable under any conditions) of raising sheep for mutton rather than for wool. As it happened, all this distressing transition was made the more trying because it took place in a period when all industry was depressed. Just as the general revulsion of the years 1893–97 was ascribed by the protectionists to the tariff act of 1894, so the special difficulties of the wool manufacturers and wool-growers were ascribed to that measure, and here with some show of reason. Given a reasonable time, with general economical conditions of a normal sort, and it is more than probable that the new régime in the wool industry would have won its way to general acceptance. But the experiment of free wool and of simple duties on woollens was tried for too short a time to prove the wisdom of the change.⁷

On cotton goods the general tendency was to impose duties lower than those of 1890. This was indicated by the drag-net rate, on manufactures of cotton not otherwise provided for, which had been fifty per cent. in 1890, and was 45 per cent. in 1897. There was, again, as in 1890, a rigorously elaborate system of combined specific and ad-valorem duties on certain sorts of goods selected for especially heavy rates, such as cotton stockings and hose, and plushes, velvets, corduroys.⁸ In the main, the cotton manufacturers held aloof from the new measure. The rates of the act of 1894 had been not unsatisfactory to them; and they may have feared some such policy in regard to their material as befell the wool manufacturers. In fact, the Senate, in the course of its tortuous amendments, inserted in the bill (apparently somewhat to its own surprise) a duty on raw cotton, designed to check the importation of certain kinds of Egyptian cotton whose fibre fits it for some special uses. But here no political complication within the Republican party bolstered up the change; and this proviso, absurd enough, but no more absurd than those relating to carpet wool and to hides, disappeared in the Conference Committee.

On two large classes of textile goods new and distinctly higher duties were imposed,—on silks and linens. The duties on silks present a remarkable case of the unexpected extension of the protective system. From the time of the civil war, silks had been subject to heavy ad-valorem duties—60 per cent. from 1864 to 1883, and 50 per cent. from 1883 to 1897. These duties had caused a great silk-manufacturing industry to grow up, with results that were in some respects surprising, and might perhaps be cited as showing the possibility of successful application of protection to young industries. But the measure of apparent success thus attained, and the degree of protection thus afforded, did not satisfy the manufacturers or the dominant protectionists. An increasing competition from silk goods produced in Japan was feared, the spectre of “cheap labor” being invoked once more. Moreover, the fraud and undervaluation inevitable under any high ad-valorem duty had long suggested the desirability of arranging some schedule of specific duties on silks. Unquestionably the administration of the ad-valorem duty had been unsatisfactory, and the rates of 50 and 60 per cent. had been less effective in checking imports than they would have been without the almost systematic undervaluations by consignees and agents. On the other hand, the difficulties of framing a schedule of specific duties were great, and indeed had hitherto been thought insuperable. In view of the greatly varying qualities of the goods, and the difficulty of grading them by any external marks, duties by the pound or yard would be too high on the cheaper goods, disproportionately low on the dearer. The act of 1897 boldly attempted to grapple with the difficulties of the case, and for the first time imposed specific duties on silks. The mode of gradation was to levy the duties according to the amount of pure silk contained in the goods. The duties were fixed by the pound, being lowest on goods containing a small proportion of pure silk, and rising as that proportion became larger; with the proviso that in no case should the duty be less than 50 per cent. This plan brought about an unquestionable increase in the rates, especially on the cheaper silks. How great the increase was, could be judged only by a person minutely conversant with the trade, and might be difficult to calculate in advance even by such a person. On the other hand, it was doubtful whether the administrative difficulties encountered under the high ad-valorem duties of previous acts would not appear in full force under this one. The exact determination of the percentage in weight of pure silk in any given piece of so-called silk goods could hardly be an easy matter. Yet this had to be precisely ascertained for the satisfactory administration of the duties of 1897. Thus, the duty on certain kinds of silks was $1.30 per pound, if they contained 45 per cent. in weight of silk; but advanced suddenly to $2.25, if they contained more than 45 per cent. The same sort of gradation, bringing sudden great changes in duty as an obscure dividing line was crossed, ran through the whole schedule; and the temptation to false statement at the hands of the importer would seem to be as great as the difficulty of detection at the hands of the customs examiner. Both in the high range of rates and in the attempt at rigorous enforcement the new act here went far beyond the act of 1890, making a new and important advance in the application of extreme protection.⁹

On linens another step of the same kind was taken, specific duties being substituted here also for ad-valorem. In 1890, the ad-valorem rate on linens had been raised to 50 per cent., to be reduced in 1894 to 35 per cent. In 1897, a compound system was adopted: specific duties imposed with ad-valorem supplements, such as had already been tried on cotton hose, velvets, and other fabrics. Linens were graded somewhat as cottons had been graded since 1861, according to the fineness of the goods as indicated by the number of threads to the square inch. If the number of threads was sixty or less per square inch, the duty was one and three fourths cents a square yard; if the threads were between sixty and one hundred and twenty, the duty was two and three fourths cents; and so on,—plus 30 per cent. ad-valorem duty in all cases. But finer linen goods, unless otherwise specially provided for, were treated leniently. If the weight was small (less than four and one half ounces per yard), the duty was but 35 per cent. On the other hand, linen laces, or articles trimmed with lace or embroidery, were dutiable at 60 per cent.,—an advance at 10 per cent. over the rate of 1890. The new specific duties on linens were expected to induce some cotton mills to turn to cheaper grades of linens, such as towel cloth; but the general conditions of the manufacture of finer linens made it doubtful here, as in the case of finer silks and woollens, whether the imported fabrics would be supplanted.

It was inevitable, under the political conditions of the session, that in this schedule something should again be attempted for the farmer; and, accordingly, we find a substantial duty on flax. The rate of the act of 1890 was restored,—three cents a pound on prepared flax, in place of the rate of one and one half cents imposed by the act of 1894. Here, too, no appreciable economic change was likely to result. Bagging for cotton, which had been admitted free under the act of 1894, was subjected to a duty, but a lower duty than that of 1890: the rate being cent per square yard in 1897, as compared with 1 cents in 1890. This compromise may also be regarded as making some concession to the planter of the South.

On chinaware the rates of 1890 were restored. The duty on the finer qualities which are chiefly imported had been lowered to 35 per cent. in 1894, and was now once more put at 60 per cent. On glassware, also, the general ad-valorem rate, which had been reduced to 35 per cent. in 1894, was again fixed at 45 per cent., as in 1890. Similarly the specific duties on the cheaper grades of window-glass and plate-glass, which had been lowered in 1894, were raised to the figures of 1890; though on some of the more expensive kinds of plate-glass the lower rates of 1894, being still sufficient to prevent importation, were left substantially unchanged.

The metal schedules in the act of 1897 showed in the main a striking contrast with the textile schedules. Important advances of duty were made on many textiles, and in some cases rates went considerably higher even than those of 1890. But on most metals, and especially on iron and steel, duties were left very much as they had been in 1894. Indeed, Mr. Dingley, in introducing the bill in the House, said that, “the iron and steel schedule, except as to some advanced products, had not been changed from the present law, because this schedule seemed to be one of the two of the present law [the other being the cottons schedule] which are differentiated from most of the others, and made in the main protective.” Hence we find, as in the act of 1894, iron ore subject to duty at forty cents a ton, and pig iron at four dollars a ton. On steel rails also there was no change from the comparatively moderate rate of 1894; it remained $7.84 per ton. On coal there was a compromise rate. The duty had been seventy-five cents a ton in 1890, and forty cents in 1894; it was now fixed at sixty-seven cents.

On the other hand, as to certain manufactures of iron and steel farther advanced beyond the crude stage, there was a return to rates very similar to those of 1890. Thus, on pocket cutlery, razors, guns, we find once more the system of combined ad-valorem and specific duties, graded according to the value of the article. It is not easy to unravel the meaning and probable effects of the complicated duties imposed in these cases; but it is clear that they were framed with a view to imposing a very high barrier to imports, and yet were arranged on the system, vicious from the administrative point of view, of bringing sudden changes in duty as a given point in appraised value is passed.¹⁰

Some other items in the metal schedule deserve notice. Copper remained on the free list, where it had been put in 1894. Already in 1890 the duty had been reduced to one and one fourths cents per pound. As the copper mines, almost alone among the great enterprises of the country, had been enjoying uninterrupted prosperity, even during the period of depression, and had been exporting their product on a great scale, no one cared a straw for the duty. For good or ill the copper duty had worked out all its effects years before. On the other hand, the duties on lead and on lead ore went up to the point at which they stood in 1890. Here we have once more the signs of concession to the silver Republicans of the far West. A considerable importation from Mexico of ores bearing both lead and silver had brought some competition with American mines yielding the same metals—competition which could not well be helped as to the silver, since that would find its way to the international market in any case, but which could be impeded so far as the domestic market for lead was concerned. Accordingly there was a substantial duty on lead, and on lead-bearing ore in proportion to the lead contained.¹¹

In general, the duties in the metal schedule ceased to excite controversy, and even to arouse attention. Whether or no as a result of the application of the protective system, the iron and steel industry had in fact passed the period of tutelage, and had become not only independent of aid, but a formidable competitor in the markets of the world. The extraordinary development of this industry during the period between 1870 and 1895 is one of the most remarkable chapters in the remarkable economic history of our century. The discovery of the wonderful beds of iron ore on Lake Superior; the feverish development of the coal deposits of the middle West; the amazing cheapening of transportation by water and rail; the bold prosecution of mining, transportation, manufacturing, not only on a great scale, but on a scale fairly to be called gigantic—all these revolutionized the conditions of production. They called for resource and genius in the captains of industry; enabled the bold, capable, and perhaps unscrupulous to accumulate fortunes that rouse the uneasy wonder of the world; and gave rise to new social conditions and grave social problems. Something of the same sort happened in the growth of copper mining; though here the richness of the natural resources counted far more, and the situation in general was more simple. Among the forces which were at work in these industries, protective duties probably counted for much less than is often supposed. An eagle eye in divining possibilities, boldness and resource in developing them, skill and invention in designing the most effective mechanical appliances,—these forces of character and of brains, developed by the pressure of competition in a strenuous community, and applied under highly favoring natural conditions, explain the prodigious advance.

The forces which so completely changed the situation of the iron and steel industry were most actively at work through the decade from 1880 to 1890. By 1890 they had worked out their effects on such a scale as to command general attention. In that year, for the first time, the production of pig iron in the United States exceeded that of Great Britain. The enormous output, and the cheapened cost, must soon have brought a sharp fall in prices. The crisis of 1893, and the depression which followed, precipitated the fall, and soon, as is the common effect of such revulsions, intensified it. Prices of all the crude forms of iron and steel went down to the foreign level and even below it. After a long period of gradual but rapid change, the results of the new conditions in the industry now suddenly worked themselves out. Not only was the domestic market fully supplied, but the beginnings of an export movement appeared. Imports of the cruder forms of iron and steel ceased entirely; and the more highly manufactured forms which continued to be brought in were mainly “specialties,” made by unusual processes or affected by exceptional conditions.

Perhaps the most striking consequence of these changed conditions was the new situation as to steel rails. With the aid of cheaper pig iron, and by means of improved methods, rails were made as cheaply as in Great Britain, if not more cheaply. The combination which had succeeded for so many years in keeping the price of rails above the normal point, was still able to hold together for some years after 1893. But the stress of continued depression, slackened demand, and sharper rivalry, finally caused it to give way in 1897, and the price of rails dropped abruptly. The duty imposed in the act of 1897 ($6.72 per ton) was nominal; for domestic prices were as low as foreign. Doubtless, in the future, such a duty, like those of former acts, might facilitate another combination and another period of inflated prices. But for the time, steel rails were exported, not imported, and at all events the period when protection could be said in any sense to be needed had clearly passed.¹²

Another consequence of the changed conditions in the iron and steel industry was that the duty on tin plate, a bone of contention under the act of 1890, was disposed of, with little debate, by the imposition of a comparatively moderate duty. The higher duty on that article in the act of 1890 (2 cents per pound) had been advocated by protectionists and attacked by their opponents with equal bitterness. Yet the reduction in 1894 (to 1 cents) had aroused little comment; while in 1897, with the protectionists in full command, it was raised to no more than 1½ cents, again with little comment. In the intervening period the prices of the steel sheets from which tin plates are made (tin plates being simply sheets of steel coated with tin) had fallen in the United States in sympathy with the prices of all forms of iron and steel; and this not only absolutely, but as compared with the prices of similar articles in Great Britain. Hence even the duty of 1894 was as effective for the purposes of promoting the manufacture of this particular article, as had been the higher duty of 1890; while that of 1897, which was a trifle higher than that of 1894, was more than sufficient to maintain the protectionist support for the industry. The episode was certainly a curious one. The much-contested duty of 1890 went into effect just at a time when the general development of the iron and steel industry was preparing the way for the immediate effectiveness of the duty in stimulating domestic production; while the rapid fall in iron and steel prices after 1890, and especially after 1893, enabled the tin plate manufacture to hold its own, after a brief space, with a much lower duty than it had so insistently demanded in 1890.

A part of the act which aroused much public attention and which had an important bearing on its financial yield was the sugar schedule—the duties on sugar, raw and refined. It will be remembered that the act of 1890 had admitted raw sugar free, while that of 1894 had imposed a duty of 40 per cent. ad valorem. This ad-valorem rate had produced a revenue much smaller than had been expected, and, indeed, smaller than might reasonably have been expected. Notwithstanding the insurrection in Cuba and the curtailment of supplies from that source, the price of raw sugar had maintained its downward tendency; and the duty of 40 per cent. had been equivalent in 1896 to less than one cent a pound. In the act of 1897 the duty was made specific, and was practically doubled. Beginning with a rate of one cent a pound on sugar tested to contain 75 per cent., it advanced by stages until on sugar testing 95 per cent. (the usual content of commercial raw sugar) it reached 1.65 cents per pound. The higher rate thus imposed was certain to yield a considerable increase of revenue. Much was said also of the protection now afforded to the beet sugar industry of the West. That industry, however, was still of small dimensions and uncertain future. The protection now extended to it, moreover, was no greater than had been given by the sugar duty, even higher than that of 1897, which had existed from the close of the civil war to 1890. No doubt the changed conditions of agriculture and of the methods of beet sugar manufacture might cause the same duty to have a greater effect at the close of the century than during the earlier period. But this effect could come but slowly, and for many years the sugar duty would not fail to yield a handsome revenue to the Treasury; while at the same time it enabled the protectionist party to pose once more as the faithful friend of the farmer.

On refined sugar, the duty was made 1.95 cents per pound, which, as compared with raw sugar testing 100 per cent., left a protection for the domestic refiner,—i.e., for the Sugar “Trust,”—of one eighth of one cent a pound. Some intricate calculation would be necessary to make out whether this “differential” for the refining interest was more or less than in the act of 1894; but, having regard to the effect of the substitution of specific for ad-valorem duties, the Trust was no more favored by the act of 1897 than by its predecessor, and even somewhat less favored.¹³

The changes which this part of the tariff act underwent in the two Houses are not without significance. In the bill as reported to the House of Representatives by its committee, and as passed by the House, the initial rate on the crudest sugar (up to 75 degrees) was the same as that finally enacted, one cent; but the rate of progression was slower (.03 cent for each degree instead of .035), and the final duty on the important classes of raw sugar in consequence somewhat less. The so-called differential, or protection to the refiners, was one eighth of a cent per pound. In the Senate there was an attempt at serious amendment. The influence of the Sugar Trust in the Senate had long been great. How secured, whether through party contributions, entangling alliance, or coarse bribery, the public could not know; but certainly great, as the course of legislation in that body demonstrated. The Senate Finance Committee reported an entirely new scheme of sugar duties, partly specific and partly ad valorem, complicated in its effects, and difficult to explain except as a means of making concessions under disguise to the refiners. But here, as on other points, the Senate treated its committee with scant respect, threw over the whole new scheme, and re-inserted the rates of the House bill on raw sugar, but with an increased differential, amounting to one fifth of a cent, on refined sugar. So the bill went to the Conference Committee, with the differential alone in doubt. What debates and discussions went on in that committee is not publicly known. It is one of the curious results of our legislative methods that the decisive steps are often taken in star chamber fashion. But it was credibly reported that the sugar schedule was the sticking-point,—that on this schedule, and this only, each branch was obstinate for its own figures. Finally, the Senate gave way. By slightly increasing the duty on raw sugar, and leaving that on refined at the point fixed by the Senate, the House secured virtually the retention of the status quo as to the differential in favor of the Sugar Trust. The result certainly was in striking contrast to that of 1894. Then, too, there was a struggle between the House and the Senate on the protection of the Trust,—not indeed on that alone, but on that conspicuously. Then the House had proposed to wipe out all duties, and so all protection; while the Senate had proposed a substantial largess to the Trust. After a struggle much longer than that of 1897, the House had given way, and its leaders had been compelled to make a mortifying concession to an unpopular policy. The outcome in 1897 was, it is true, in substance not different. The differential was the same under the act of 1897 as it had been under that of 1894; and the increase in the duty on raw sugar once more enabled the refining monopoly, as the one large importer, to make an extra profit, temporary but handsome, by heavy imports hurried in before the new act went into force. But the moral effect was very different. The House in 1897 had adopted the plan of leaving things as they were, and had successfully resisted the effort of the refining monopoly to secure more. The result was due mainly to greater party cohesion and more rigid party discipline, enforced by the genial despotism of the autocratic Speaker of the House.

The tariff act of 1894 had repealed the provisions as to reciprocity in the act of 1890, and had rendered nugatory such parts of the treaties made under the earlier act as were inconsistent with the provisions of its successor.¹⁴ The act of 1897 now revived the policy of reciprocity, and in some ways even endeavored to enlarge the scope of the reciprocity provisions.¹⁵ One of its sections recited, in almost the exact phraseology of the act of 1890, that the President, if satisfied that other countries imposed duties that were “reciprocally unequal and unreasonable,” might suspend the free admission of certain specified articles—tea, coffee, tonka beans, and vanilla beans—and that these articles should thereupon be subject to duty, coffee at three cents a pound, tea at ten cents, and so on. The act of 1890 had held out the threat of duties as to some other important articles—sugar and hides. But these could not now be easily used for the reciprocity clauses, being dutiable in any case. Tonka beans and vanilla beans, even though imported mainly from the tropical parts of South America, were hardly weighty substitutes.

Quite different in purpose, and designed to reach countries of the same rank in power and civilization as the United States, were some provisions which contemplated not fresh duties, but a reduction of those imposed by the new act. In the first place the President was authorized, “after securing reciprocal and reasonable concessions,” to suspend certain duties, and to replace them by duties somewhat lower. The articles on which reductions could thus be made were argol (crude tartar), brandies, champagne, wines, paintings, and statuary. The country aimed at was France. The higher duties on silks in the new act would especially affect this country, and might tempt her to reprisals. Her system of maximum and minimum duties, adopted in 1892, was expressly devised as a means of securing concessions in commercial negotiations. Now the United States followed suit, and arranged her own system of duties in such manner that concessions were provided for in advance.

More important in its scope, but so limited as regards time and conditions as to promise little practical result, was the next section, which contemplated commercial treaties for general reductions of duties. The President was authorized to conclude treaties providing for reductions of duty, up to 20 per cent., on any and every article. But the treaties must be made within two years after the passage of the act; the reductions could be arranged only through a period not exceeding five years; and the treaties must be ratified by the Senate, and further “approved by Congress,” that is, by the House as well as by the Senate. The other reciprocity arrangements, described in the preceding paragraphs, did not need the consent even of the Senate. The arrangement for a possible general reduction of duties by 20 per cent. was not contained in the House bill, but was inserted by the Senate in the course of its amendments. Restricted as it was, the chance of its leading to any change in the rates of duty was of the slightest.¹⁶

An important aspect of the new act, and one much discussed, was its fiscal yield. Designed to give protection to domestic industries, it was expected also to bring to the Treasury a much-needed increase of revenue. This combination of industrial and fiscal policy is too common in the history of the United States, as indeed in that of other countries, to have aroused much comment. Yet it was certainly unfortunate that so little attention was given to the simple question of revenue, without regard to protection or free trade. Additional taxes on beer or on tobacco (not to mention duties on tea and coffee), even though so moderate in rate as to have been little noticed and easily borne by consumers, would have yielded a large, steady, and easily collected revenue. Proposals for taxes of this sort were indeed made by the Senate Finance Committee; but most of them were struck out by the Senate itself, and hardly a trace remained in the act as passed. A slight increase in the tax on cigarettes and a modification of certain rebates in the taxes on beer alone remained as simply fiscal measures. Barring these minor changes, protective duties, and these only, were relied on to convert the deficit into a surplus.

There was much heated discussion immediately after the passage of the act as to its effect on the public finances; it being predicted with equal confidence that it would fail to secure the desired revenue, and that it would convert the deficit into a surplus. It was certainly to be expected that,—once the heavy imports rushed in just before the passage of the act were out of the way,—the increased duties on sugar, on wool and woollens, and on other articles, would swell the revenue considerably. But how much? On this subject the only thing certain was that the financial effect was entirely uncertain. All calculations as to the fiscal results of such customs legislation as the United States undertook in 1883, in 1890, in 1894, and in 1897, rest simply on guesswork. Supposing the imports to remain the same as in some previous year, it is possible to state what a given rate of duty will yield; but no one can foretell with any approach to accuracy what the imports will be. This is more particularly the case with imports of protected articles, and so with the revenue derived from them. Such an article as sugar, indeed, once the rate of duty is fixed, yields a fairly regular amount. Barring sugar, we have in the main dutiable imports that fluctuate greatly and unexpectedly from year to year. Even with rates unchanged, it is impossible to know in advance with any degree of certainty what the revenue will be. In times of activity imports tend to rise, and the revenue swells; in times of depression they tend to fall, and the revenue shrinks. He who could foretell the oscillation of the industrial tides would have something on which to base an estimate of the direction at least, if not of the rate, in the movement of the national revenues. But even for the most experienced observer and under stable rates of duty, there must always be a large margin of uncertainty in estimates of the future tariff revenue. With rates much changed, no estimate can be more than a guess.

The discussions as to the revenue to be expected from the act of 1897 served to bring into vivid relief not only the haphazard character of our fiscal methods, but the need of reform in the general financial and monetary system. One of the arguments urged in favor of its passage was that an increase of revenue was necessary in order to enable the Treasury to fufill its obligations for the maintenance of gold payments; and it was even maintained that a surplus was the one thing needful to bring about a sound and stable monetary situation. No doubt, as things had stood ever since the resumption of specie payments in 1879, it was not only desirable on grounds of every-day prudence that the revenue should at least equal the expenditure, but this was important for the monetary responsibilities which had been imposed on the Treasury of the United States. It was clear, however, that a continuing surplus, and the unfailing avoidance of a deficit, were not to be expected. A large accumulated surplus tempts to reckless expenditure, as it did in 1890; while the inevitable periods of depression recurrently cut down the revenue, and make occasional years of deficit more than probable. It was unfortunate that the questions of protection to domestic industries and of revenue for the government should be intertwined.

This source of difficulty, which had so much affected tariff legislation in 1894 as well as in 1897, was removed in 1900, when the gold standard act reorganized the Treasury and set aside the reserve fund of 150 millions for the security of the paper money. Thereby the monetary system was made independent of fluctuations in the general revenue. The question of protection and free trade still remained complicated with the revenue problem of the government; and this was inevitable, as long as customs duties were so largely relied on for meeting the national expenses. But the monetary problem at least was finally separated from the fiscal problem.

The tariff of 1897, like that of 1890, was the outcome of an aggressive spirit of protection. As in 1890, much was said of the “verdict of the people” in favor of the protective policy. Yet the election of 1896 turned on the silver question; and the Democrats in 1894 certainly had much more solid ground for maintaining that the popular verdict had been against high-handed protection than the Republicans in 1897 that it had been in favor of such a policy. Given the political complications of 1896–97, it was no doubt inevitable that a measure imposing higher duties should come. But the act of 1897 pushed protection in several directions farther than ever before, and farther than the political situation fairly justified. It disheartened many who had supported the Republicans on the money issue in 1896; and even good party members, loyal to the general policy of protection, doubted whether that policy had not now been carried too far.

The new and unexpected turn thus given the tariff history of the United States was the more regrettable because the general trend of the country’s development made a liberal policy at once easier and more inviting. The closing years of the century found new economic conditions, which must become of greater and greater consequence for our customs policy as the next century is seen to open a new era. The United States is a great manufacturing country; not only this, but one in which the bulk of the manufacturing industries is no longer seriously dependent on protection. The changes in the metal industries, to which reference was made in the preceding pages, are not only important in themselves, but are of far-reaching consequence for the general industrial future of the United States. Iron and steel, on which the material civilization of the modern world rests, are produced more abundantly than anywhere else, and at least as cheaply,—soon, if not yet, will be produced more cheaply. With the wide diffusion of a high degree of mechanical ingenuity, of enterprise, of intelligence and education, it is certain that the United States will be, and will remain, a great manufacturing country. The protective system will be of less and less consequence. The deep-working causes which underlie the international division of labor will indeed still operate, the United States will still find her advantages greater in some directions than in others, and the ingenuity of legislators will still find opportunity to direct manufacturing industry into channels which would not otherwise be sought. But the absolute effect, still more the proportional effect, of such legislation on the industrial development of the country will diminish. The division of labor within the country will become more and more important, while international trade will be confined more and more to what may be called specialties in manufactured commodities, and articles whose site of production is determined mainly by climate. Not only sugar (for the present), tea, coffee, and the like, but wool also belong in the class last mentioned, as to which climatic causes dominate; and the duties on wool, with those on woollens in their train, are thus the most potent in bringing a substantial interference with the course of international trade. But, on the whole, protective duties, however important they may be in this detail or that, cannot seriously affect the general course of industrial growth, and will affect it less and less as time goes on. In any case, the question for the future will be, even more than it has been in the past, not whether the United States shall be a manufacturing country, but in what directions her manufactures shall grow,—whether in those where aid and protection against foreign competition are constantly sought, or in those where natural resources and mechanical skill enable foreign competition not only to be met, but to be overcome on its own ground.

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¹

Fiscal Year	Ordinary Revenue	Expenditures
1892–93	461.7	459.4	2.3 Surplus
1893–94	372.8	442.6	69.8 Deficit.
1894–95	390.4	433.2	42.8 Deficit.
1895–96	409.5	434.7	25.2 Deficit.
1896–97	430.4	448.4	18.0 Deficit.

The figures indicate millions of dollars. The deficit really began to appear in the second half-year of the fiscal year 1892–93; but the receipts in the first half-year had been large, so that this fiscal year as a whole showed a small surplus.

² “Never until he had experience under free wool did the manufacturer realize the full extent of the disadvantages he suffers by reason of the wool duty, and the impossibility, by any compensating duty, of fully offsetting these disadvantages.” So much was said in the statement made before the Ways and Means Committee by the secretary of the Wool-Manufacturers’ Association. Bulletin of the wool Manufacturers, March, 1897, p. 84.

³ In a formal communication to the Ways and Means committee the Wool-Manufacturers’ Association used the following language: “The real explanation of these extraordinary demands lies in the fact that the wool-growers of the Middle West find themselves in need of protection against their American competitors west of the Mississippi River. It was not the imports under the McKinley law, but the cheapergrown wools of the Far West, which made wool-growing relatively unprofitable on the high-priced lands of Ohio, Michigan, Pennsylvania. Every further expansion of the ranch industry must increase the effects of this competition. An enormous tariff on wool, such as is proposed, would overstimulate this ranch industry, by its promise of excessive profits, and would thus still farther increase the difficulties of the Middle-West farmer.” Bulletin of the Wool-Manufacturers, June, 1897, p. 133. The woolgrowers had at first asked a duty of fifteen cents a pound on clothing and combing wool, and finally had pro posed, as an “ultimatum,” twelve cents. The manufacturers had offered to join in recommending duties of eight and ten cents (graded by value) on clothing wool, and of nine and eleven cents on combing wool. In the act the growers got substantially their ultimatum, —eleven cents on clothing wool, twelve cents on combing wool.

⁴ “It is not pleasant for the American wool manufacturer to be told that the average ad-valorem rate upon woollen goods, under the tariff of 1890, was 98 per cent. It does not particularly help the case from the consumer’s point of view to reply that the actual protective duty accorded him under that law did not exceed 45 per cent. The public looks at the fact—98 per cent.” So spoke the Secretary of the Wool-Manufacturers’ Association to the House Committee. Bulletin of the Wool Manufacturers, March, 1897, p. 83. Nonetheless, the manufacturers in 1897 secured, and presumably asked for, an increase of the protective (i.e., ad-valorem) duty on woollens to 55 per cent.,—a rate higher than any imposed before.

⁵ The drift of the changes from the rates of 1890 is shown by the following figures as to the two classes of goods most largely imported:

DUTIES ON WOOLLEN CLOTHS.
1890	1897
(1) If worth 30 cents or less per pound, 33 cents per pound plus 40 per cent. (2) If worth between 30 and 40 cents per pound, 38½ cents per pound plus 40 per cent. (3) If worth more than 40 cents per pound, 44 cents per pound plus 50 per cent.	(1) If worth 40 cents or less per pound, 33 cents per pound plus 50 per cent. (2) If worth between 40 and 70 cents per pound, 44 cents per pound plus 50 per cent. (3) If worth over 70 cents per pound, 44 cents per pound plus 55 per cent.

DUTIES ON DRESS GOODS.

1890	1897
(1) Cotton warp, worth 15 cents a yard or less, 7 cents a yard plus 40 per cent. (2) Cotton warp worth more than 15 cents a yard, 8 cents a yard plus 50 per cent. (3) If the warp has any wool, 12 cents a yard plus 50 per cent.	(1) and (2) the same; but with the proviso that the ad-valorem duty shall be 55 per cent. if the value is over 70 cents per pound. (3) If the warp has any wool, 11 cents per yard plus 50 per cent.; but with the proviso that the ad-valorem duty shall be 55 per cent. if the value exceeds 70 cents per pound.

It will be observed that, under the act of 1897, on dress goods (of which some $20,000,000 worth was imported in 1896), the customs officers must ascertain, first, whether the warp consists “wholly of cotton or other vegetable material”; if so, whether the goods are worth more or less than 7 cents a yard; if not, whether they are worth more or less than 70 cents a pound. All these circumstances affect the rate of duty, and obviously increase the difficulties of administration and the opportunities for evasion.

⁶ See above, pp. 251–53.

⁷ On the episode of 1894–97, and indeed on the whole history of wool- growing from the earliest times to 1908, by far the best investigation is that of Professor C.W. Wright, Wool-Growing and the Tariff, published in the Harvard Economic Studies (1910).

⁸ Compare pp. 227–230 above, where the duties on these articles under the act of 1890 are referred to. The same objectionable method of specific duties, graded by value, was applied in the act of 1897, and in general with higher rates; thus by paragraphs 315, 318, 319, 386 of the act of 1897. On cotton hose, to give a single example, the lowest classes (i.e., the cheapest goods) and the rates on them were:

Class. Duty. In 1890—Value 60c. or less per dozen 20c. a dozen plus 20%

In 1897—Value $1 or less per dozen 50c. a dozen plus 15%

Clearly, the duty of 1897 was very much higher than that of 1890 had been.

⁹ The important part of the silk schedule in the act of 1897 is paragraph 387, which fixed the duties on “woven silk fabrics in the piece, not specially provided for.” The same rates are applicable, under section 388, to silk handkerchiefs. The method of grading is exemplified by the following summary statement of some of the rates first enumerated. Duties on silk piece goods:

(1) containing 20% or less in weight of silk, if in the gum $0.50 per lb.

if dyed in the piece 60 per lb.

(2) containing 20 to 30% in weight of silk, if in the gum 0.65 per lb.

if dyed in the piece 0.80 per lb.

(3) containing 30 to 45% in weight of silk, if in the gum 0.90 per lb.

if dyed in the piece 1.10 per lb.

(4) containing 30% or less in weight of silk,

if dyed in the thread or yarn, black 1.10 per lb.

other color 1.30 per lb.

(5) containing 30 to 45% in weight of silk,

if dyed in the thread or yarn, black 1.10 per lb.

other color 1.30 per lb.

So the schedule goes on, the duties advancing by stages as the per cent. in weight of silk becomes greater, as the goods are dyed in the thread or yarn, as the goods are “weighted in dyeing so as to exceed the original weight of the raw silk,” and so on. Goods of lighter weight (less than 1⅓ ounces per yard) are subject to still higher duties; those of lightest weight (⅓ ounce per yard or less), to the highest duty of all, the maximum being $4.50 per pound.

It deserves to be noticed that the woollen manufacturers, confronted with the undervaluation problem under the ad-valorem duties on woollens, found it impossible to frame a scheme of specific duties. A special committee from their number, which attempted to devise such a scheme, found that “a wholly specific schedule is impossible, because of the thousands of variations—in weave, in texture, in materials, in finish—which distinguish woollen goods from those of all other textile manufactures.” See Bulletin of the Wool Manufacturers, March, 1897, p. 72. In the tariff bill as passed by the House the duties on woollens (over and above the compensating duty) had been made partly ad valorem and partly specific with gradations by value. But this additional complication in the woollens schedule was struck out in the Senate.

¹⁰ Pocket cutlery supplies a good example of the methods applied in the acts of 1890 and 1897 to the articles here mentioned. The rates of duty were:

1890.
Class.	Duty.
(1) Value (per dozen) 50 cents or less	12 cents (per dozen) plus 50 per cent.
(2) Value 50 cents @ $1.50	50 cents plus 50 per cent.
(3) Value $1.50 @ $3.00	$1.00 plus 50 per cent.
(4) Value over $3.00	$2.00 plus 50 per cent.
1897.
Class.	Duty.
(a) Value (per dozen)	40 cents or less. 40 per cent.
(1) Value 40 @ 50 cents	12 cents plus 40 per cent.
(2) Value 50 cents @ $1.25	60 cents plus 40 per cent.
(3) Value $1.25 @ 3.00 per dozen	$1.20 plus 40 per cent.
(4) Value over $3.00	$2.40 plus 40 per cent.

It will be seen that on the cheapest knives there was a reduction in duty as compared with 1890; while on the higher classes, and especially on the second, there was an increase. The most effective change was that by which the line of classification by value was shifted from $1.50 to $1.25,—a shift which caused many goods to come under class 3 in 1897 which were in class 2 in 1890, and so caused a great advance in the duty chargeable. It may be noted incidentally that the figure of $1.50, to mark the dividing line between classes 1 and 2, had been retained both in the House bill and in the Senate bill: the change to $1.25 was made at the last moment in the Conference Committee. It needs only a glance at the duties under these classes in 1897 to show how great will be the temptation to manufacture knives, and to juggle with their value, in such manner as to bring them below the dividing line of $1.25. The same vicious method of grading the duties on pocketknives had been followed in the act of 1894, though with somewhat lower rates. In 1890 and 1897 (not in 1894) the method was also applied to razors, table-knives, and guns, and in 1897 to shears and scissors. The pertinent paragraphs of the act of 1897 are numbers 153 to 158.

¹¹ The duties from 1890–1897 were:

	Lead ore, per pound of lead contained	Lead per pound.
1890	1½ cents	2 cents.
1894	¾ cent	1 cent.
1897	1½ cents	2⅛ cents.

¹² See the figures in Appendix 5.

¹³ The rates of 1897 were:

On raw sugar testing up to 75 degrees	1 cent per lb.
For each additional degree	cent per lb.
Hence raw sugar testing 95 degrees pays	1.65 cent per lb.
And raw sugar testing 100 degrees pays	1.825 cent per lb.
Refined sugar pays	1.95 cent per lb.
Leaving a difference between the refined sugar rate and that on raw sugar at the 100 degree rate of	0.125 cent per lb.

In regard to sugar coming from countries paying an export bounty, the act of 1897 made a change from the methods of 1890 and 1894, when a fixed additional duty of cent per pound had been imposed on bounty-fed sugar. It was now provided in general terms (in section 5 of the act of 1897) that on any article on which a foreign country paid an export bounty, an additional duty should be imposed “equal to the net amount of such bounty or grant”; the Secretary of the Treasury being required to ascertain this amount in each case.

¹⁴ Section 71 of the act of 1894.

¹⁵ Sections 3 and 4 of the act of 1897.

¹⁶ Under the first described of these reciprocity plans, commercial agreements were soon reached with France, Germany, Italy, and Portugal. No treaties of the second sort were ever made.