late summer of 1902, at which certain Senators and some others were present, the President strongly expressed in a public speech a desire for the appointment of a permanent tariff commission to recommend to Congress changes in schedules. This, of course, was at once regarded by the Democrats as an attempt to juggle with the question. It did not satisfy the reformers and it annoyed and worried the partisan Republicans. For a moment it seemed as if the President hesitated to pursue the idea further, but it was not very long before definite announcements from the White House showed that the tariff commission idea was to be pushed as an administration measure. Moreover, hints were thrown out from time to time that a revision of the tariff schedules by Congress would be recommended by the President, and that he might call an extra session of Congress for that purpose in March, 1903. It was noteworthy, however, that these suggestions were made chiefly in those parts of the country where the revision sentiment was strong.

The opinion of the country had been changing on the subject of reciprocity. Throughout our whole history during the past twenty years there has been a rhythmic swing of public opinion from tariff revision to reciprocity as a means of getting relief from the burdens and injustice of existing schedules. Reciprocity has been a failure so far as tariff reform through that means is concerned. This, more than anything else, has again driven public opinion to the side of tariff revision. At the opening of the Congressional session in 1902-1903 there are, therefore, several important questions facing the country. Does it in the first place, want reciprocity? If so, can reciprocity be had? And, finally, is reciprocity to be considered a substitute for tariff revision or not? These questions are important. It is for their settlement that the information contained in the present volume has been gathered. Yet they are questions which can be settled only by the public and upon which no obiter dictum will suffice. It is worth while in a

general way to review the main considerations which suggest themselves upon this topic, in order to indicate the lines upon which the discussion of these questions must proceed.

In considering the question whether or not we really want reciprocity, we may make a distinction at the outset between Cuban reciprocity and reciprocity in general. Dealing first with Cuba, it should be observed that the country has pronounced itself in favor of a grant of reciprocity to the Island. It should be noted, however, that this grant is to be twenty per cent. and no more. The verdict of the last election could hardly be construed as a mandate to give more than that amount, and it seems likely that the opposition will concentrate its powers in an effort to limit the concession to that figure. This naturally raises the question whether Cuba will want reciprocity at that rate, and if not, whether it is wise that we should make a larger offer.

Without attempting here to go into the cost of production of sugar in Cuba, there are certain manifest considerations which suggest themselves in connection with Cuban reciprocity. In the first place, it should be understood that the moral issue at stake in the Cuban problem is either nil or so small that it may be neglected. It is possible that we have already done for Cuba as much as that country has any right to ask. The pledge given to Cuba, if made at all, was made only on the personal faith of Presidentl McKinley, without authority from Congress. It seems, moreover, to be permissible to look at the reciprocity question in regard to Cuba, as in regard to other countries, from a strictly economic point of view. Our moral obligation to the Island scarcely implies more than that we should put her on a basis of fair competition with all other countries in our markets. If we are to go farther than this, if we are to admit Cuban sugar to our markets on more favorable conditions than that of other countries, it is fair for us from the tariff standpoint to inquire whether the advantages we shall receive are equal to those we shall give. This state

ment is not based upon free trade philosophy, for if guided by that philosophy we should do well to reduce our duties on sugar to the revenue point, without question as to the policy of foreign countries. Speaking, therefore, from the protectionist's standpoint, first of all, we have to inquire whether or not our moral duty to Cuba has been fulfilled by placing her sugar in our markets upon an equality with that of foreign countries.

It will be remembered that the McKinley Act had admitted raw sugar free and that the Wilson bill had imposed a countervailing duty on bounty-fed sugar. We have seen, too, that this countervailing duty was brought to perfection under the Dingley Act which imposed a countervailing duty equal in amount to any bounty bestowed by any foreign country on any article including sugar. Under the act of 1890, therefore, the product of sugar in Cuba stood on precisely the same basis as bounty-fed European beet sugar in our market, while our domestic sugar producer had an advantage of two cents per pound over either. At the present time, under the Dingley Act, Cuba, which grants no bounties, can send her sugar to the United States at an advantage of twenty-seven one hundredths of a cent per pound as compared with the beet sugar of Germany, while its disadvantage as compared with domestic sugar due to the tariff is only about 1.7 cents. The difficulty which Cuba has had to encounter in the cultivation of sugar is not due to the "loss of our market," but is due to a general decline in the price of sugar in the world's market. Should we admit Cuban sugar subject to a reduction of twenty per cent., or any other per cent., there is no reason to suppose that the price of sugar at Havana would be better than it now is. As has so often been pointed out in the course of this discussion, sugar prices are determined in the world's market, and not in that of the United States. Why should the American refiner of raw sugar be willing to pay more for Cuban raw sugar than for raw sugar from Europe? Assuming that he would be per

mitted to bring his Cuban sugar into the United States at twenty per cent. reduction, that certainly would not show (unless at all events there was competition among refiners in the United States) that the Cuban planter would be able to get the whole of twenty per cent., if any part of it. It would be largely a question of bargaining power.

In summing up the situation with regard to Cuba, we cannot do better than to quote from a recent article in which our domestic sugar problem is very thoroughly considered.1

"In the case of Cuba there seems to be less danger than in Porto Rico of relatively large gains being obtained by dealers instead of producers. The much larger scale of production practiced in Cuba strengthens the economic position of the producers. It is the commercial custom there, as well as in Louisiana, for central factories to pay for each ton of cane purchased the quoted price of a fixed quantity of sugar. This method of payment tends to distribute any market advantage, even among the mere producers of cane [the colonos]. The planter and the factory, according to some of the testimony, gain about equally from an increase in price.

"The question of Cuban reciprocity involves the whole commercial policy of the United States towards its dependencies. It is not the simple question that it is painted either by its advocates, as necessary to keep faith with Cuba, or by its opponents, as disregard of the vested interests of domestic producers. * Under the free-sugar provision of the McKinley Act, Cuba was prosperous; by the repeal of that law, 'Cuban sugar was shut out of the American market,' and economic distress and the insurrection were the result. To remove the cause of the economic distress, it is argued, reciprocity must be re-established, in aid of which President McKinley promised his influence. The economic side of the argument is clearly at fault. The shipping price is not so much affected by the amount of the duty imposed that directly increasing only domestic prices-as by its disscriminating features, which operate either as handicap or stimulus to the industry of particular countries. Under the act of 1890 Cuban sugar was on the same footing as European beet sugar, and at a disadvantage of two cents (bounty) per pound compared with domestic sugar. Under the Dingley Act Cuban sugar has an advantage of one-fourth

1 Quarterly Journal of Economics, Vol. XVII., Nov., 1902, pp. 77-9. Sugar Question in the United States," by F. R. Rutter.

"The

more precisely .27 cent per pound over German beet sugar and a disadvantage of less than 1.7 cents compared with domestic sugar. The lower price obtained by Cuban shippers-1.8 cents in 1902 as compared with 3.1 cents in 1892-is the result of a general fall in sugar prices. The Hamburg prices of 88-analysis beet sugar show a still more marked decline-from 3.2 cents on January 7, 1892, to 1.4 cents on January 2, 1902. Cuban sugar under the act of 1890 had no special advantage whatever in the American market, under the act of 1897 it has the countervailing duty-and is at no disadvantage save with domestic and colonial sugar. American law can determine only relative prices and variations from the world price. It does not determine absolute prices except within the United States."

When we come to consider the question whether reciprocity in general is a policy to be desired by this country, the inquirer is obliged to recognize several aspects of the problem. The question at once arises-desirable for whom? Evidently in considering a tariff policy of this kind, it might be that the adoption of the policy would serve the interest of the whole of the population, or of but a part of it. It might be worked out so as to assist specific classes only. Therefore, as a policy, it becomes necessary to recognize different aspects of reciprocity. It is evident that the only way in which it could be helpful to the consumers of the country, as a class, would be through a reduction in price of the commodities used by them in daily life. Were such results to be obtained from reciprocity, they would evidently differ in no material respect from the benefits alleged to come from tariff reform or from a reduction in protective duties. If this were to be the case, the reciprocity problem would be reduced to a decision whether it was desirable for us to adopt a general reduction of duties as a protective system against all countries, or whether we should adopt a reduction of some duties, as opposed to a protective system against those only which enforced protective duties against us. This at once opens the whole tariff problem. Into such a discussion it would be out of place to enter at this point. It is worth while, however, to note that, granting the