According to the legislation actually in force, the German colonies, in so far as customs tariff regulations are concerned, are treated by Germany as foreign countries ("Zollausland"); the goods exported from the colonies into the German customs union are consequently subjected to the same treatment as regards customs rates and charges as the like products imported here from foreign countries.

Previously to 1893 German colonial products imported into the customs union did not even get the benefit of the conventional tariff, but came under the operation of the so-called "autonomous" tariff.

This state of things was regarded as a gross injustice by those engaged in colonial trade, and on the 2d of June, 1893, the Bundesrath adopted a resolution whereby the conventional tariff was for the future to be applied to the products of German colonies and protectorates.

In 1890 a representation, drawn up by those interested in the trade of the colonies, was addressed to the Imperial Government, pointing out the advantages which would accrue if, following the example set by Spain in regard to her colonies, differential duties were established in favor of German colonial produce imported into the German customs union.

The Government referred this representation to the Hamburg Chamber of Commerce for its opinion as to the adoption of the suggestion made therein, and in consequence of the chamber reporting strongly in favor of the maintenance of the existing system, and in particular against the introduction of differential duties, the application of the petitioners was rejected.

In the report upon the trade of Hamburg for 1891, issued under the sanction of the Chamber of Commerce of that city, the matter is referred to in the following terms:

"Our colonial policy has unhappily claimed during the past year numerous regrettable sacrifices; at the same time the economic development of most of our colonies seems to be progressing steadily, if slowly; we should, however, regret if the scheme which under various shapes has recently found advocates, viz, to favor German colonial imports by means of differential duties, should be realized. We took last year the opportunity, when a recommendation to this effect was submitted for our opinion, to express the conviction that, whilst the keystone of the commercial development of the German colonies is to be found in Germany herself and in the trade of those colonies with the Empire, that development can not fail to benefit by the participation of other nations in our colonial trade, and by full liberty being left to colonial produce to seek its natural market wherever the most favorable conditions for value may exist."

From inquiries since made, it may be taken for granted that no change has taken place in the attitude adopted upon this subject by the ruling commercial authorities at Hamburg, who continue to adhere to the opinion indicated above. On the other hand, the introduction of a preferential treatment in favor of German colonial products is undoubtedly still one of the desiderata put forward in colonial circles, but I am informed that the question has not been officially raised during the last few years. With regard to the treatment accorded in the German colonial possessions to goods imported from the mother country, Germany is likewise treated by her colonies, as regards customs duties, as a foreign country ("Zollausland"), and no especially favored treatment has hitherto been accorded by the German colonial customs administration to the imports from other foreign states.

With regard to the hypothetical question, What might be expected to be the bearing of a policy of differential duties upon the obligations incurred through the most-favored-nation clause in commercial treaties? The general impression in this country appears to be that differential duties in favor of the trade of the motherland with her colonies, and vice versa, might be introduced, in spite of the most favored-nation clause, in the absence of an express stipulation to the contrary in the treaties.

THE NETHERLANDS COLONIES.

In compliance with the instructions contained in the Earl of Kimberley's circular dispatch of the 25th ultimo, I have the honor to report that no fiscal advantages are accorded in the colonial possessions of the Netherlands to goods imported from the mother country over goods imported from foreign countries; and that, similarly, Dutch colonial goods enjoy no preferential treatment on their introduction into this country, no differential duties of any kind existing here.

Previous to the year 1872 certain products of the Dutch East Indian colonies were charged at a lower rate of the duties levied on exportation from those colonies, and thus practically enjoyed a more favored treatment on their introduction into the mother country than that applied to similar goods imported from foreign countries. The last Dutch East Indian differential export tariff dates from the year 1865 (Indish Staatblad," No. 99, p. 22), and since the 1st January, 1874, when the reform of the Indian export tariff decreed in 1872 finally came into operation, all Dutch colonial products have been and are treated on exactly the same footing as similar products imported from elsewhere.

I may add that by clause 2 of the treaty of the November 2, 1871, between Great Britain and the Netherlands, the conditions of British and Dutch trade with the island of Sumatra were completely assimilated.

THE PORTUGUESE COLONIES.

Merchandise which has been produced in the Portuguese transmarine provinces and conveyed direct in Portuguese vessels pays in the custom-houses of the mother country or the adjacent islands one-half of the duties fixed in the general tariff.

Merchandise which has been produced in the provinces of Mozambique, Portuguese India, and Timor enjoys a similar privilege, whatever the flag under which it is conveyed.

Tobacco is excepted in both cases.

Rice, spices, and fibers, after having been nationalized in any of the custom-houses of Asia or East Africa, are placed on the same footing for the enjoyment of the aforesaid advantage as if they were actually produced in the transmarine provinces.

All merchandise brought from Macao in Portuguese vessels and accompanied by a certificate of origin from that city enjoys, when cleared for consumption in the custom-houses of the mother country and the adjacent islands, a reduction of 50 per cent upon the duties of the general tariff.

Sugar grown in the island of Madeira pays, when cleared for consumption at the custom-houses of the mother country and the Azores, one-fourth of the duty chargeable upon foreign sugar of the same quality.

Maize in grain imported into the island of Madeira from foreign ports pays one-third of the duty levied upon it under the general tariff when imported into Portugal, and when grown in the archipelago of Cape Verde it pays no duty upon entering the island.

The produce and manufactures of the mother country and the adjacent islands imported into the colonial province of Cape Verde enjoy a reduction of 20 per cent from the general tariff for that colony, with the exception of alcohol and plain spirit, the reduction in favor of which is 40 per cent, and tobacco, which if of Portuguese growth pays 50 reis (24d.) per kilogram in leaf, roll, or cake, 300 reis (1s. 4d.) per kilogram of cigars, and 200 reis (11d.) per kilogram of other kinds of manufactured tobacco, as compared with 1,800 reis (8s.) per kilogram for raw tobacco, or 3,600 reis (16s.) per kilogram for the manufactured article, which are the duties levied upon the foreign product.

Merchandise reexported from the custom-house of the mother country and the neighboring islands to the province of Cape Verde pay 80 per cent of the duties charged in the general tariff, tobacco excepted.

Constructions of iron or mixed materials for habitation or manufacturing or industrial purposes, fishing nets and cord for making them, wood, vehicles and parts thereof, sacking, flooring, tiles, stonework, and barrels enter the Province of Cape Verde free of duty if of Portuguese manufacture.

Merchandise produced or manufactured in the mother country or the adjacent islands or nationalized in the custom-houses thereof, imported into the island of St. Thomas, pay 10 per cent of the duties fixed in the general tariff for that island, with the exception of fermented liquors, spirits, and tobacco. As regards the former, the following differences are established:

1

All Portuguese manufactures and produce enter Princes Island free of duty, except alcohol and distilled liquors and tobacco, which pay at the rate just given. The articles of Portuguese manufacture which are exempt from duty at St. Thomas are sacks and sacking, constructions of iron of mixed materials for habitation, agricultural or industrial purposes, vessels under 200 tons, fishing nets and cord for making them, wood, vehicles and parts thereof, tiles of all kinds, barrels, and stonework.

The export duties for coffee and cocoa shipped from St. Thomas to other parts of the Portuguese dominions may be roughly given as one-half of those levied upon shipments to foreign parts in Portuguese bottoms or one-third of their amount when the destination and the vessels are foreign. For all other merchandise they bear the proportion of 1, 5, and 15 per cent of the value, respectively.

The manufactures and produce of the mother country and the neighboring islands imported into Ambriz pay 10 per cent of the general tariff for goods of foreign origin entering that port. Reexports from the same source enjoy a reduction of 20 per cent. Merchandise produced in other districts of Angola and the other Portuguese transmarine provinces pays an all-round duty of 6 per cent upon their value when entering Ambriz, while nationalized foreign goods or the produce of the mother country reexported from the same sources enter duty free.

There is no differential rate as regards merchandise reexported from Ambriz. Whatever its destination or the flag under which it is conveyed, it pays 2 per cent upon the value.

The articles of Portuguese manufacture which are entirely exempt from duty are the same as at St. Thomas.

At the Loanda, Benguella, and Mossamedes custom-houses articles produced or manufactured in Portugal or the neighboring islands or nationalized there pay only 10 per cent of the duties levied upon similar goods of foreign origin, with the exception of alcohol and plain brandy, which pay 60 per cent of the duties of the general tariff, and tobacco, which pays 25 reis (1d.) per kilogram if in leaf, roll, or cakes, 150 reis (8d.) per kilogram of cigars, and 100 reis (54d.) per kilogram of other manufactured kinds.

Raw tobacco of foreign origin pays 1,800 reis (Ss.) per kilog., and double that when in manufactured forms.

The goods of Portuguese origin which enter duty free are the same as at St. Thomas.

The duty upon goods reexported is 2 per cent upon the value, whatever be the destination or the flag.

The export duties levied at these custom-houses upon the majority of the produce of the colony are 15 per cent when the destination is a foreign port and 3 per cent on the value when a Portuguese port. Ivory is an exception as regards the amount of the duty, although the proportion is the same. It is 10 and 2 per cent, respectively.

In Portuguese India the import duties upon goods of Portuguese origin are one-half of those levied upon similar articles of foreign origin.

At Mozambique, Portuguese or nationalized goods pay but 10 per cent of the tariff charged upon foreign goods.

Merchandise reexported from other parts of the Portuguese dominions pays 80 per cent of that tariff, with the exception of distilled drinks, which pay 60 per cent.

The exemptions from duty are the same as at St. Thomas, with the addition of leguminous produce.

No duty is levied upon reexports from Mozambique to other parts of the Portuguese dominions. Reexports to foreign ports pay 2 per cent upon their value, without distinction of the flag under which they are conveyed.

Exports to Portuguese ports pay half of the duty levied when the destination is a foreign port if the duty does not exceed 4 per cent of the value. Above that percentage they pay three-quarters of it. The highest export duty is 10 per cent upon Indian cloves and ivory.

A recent law (April 29, 1895) has considerably reduced the duty levied upon the Portuguese wines in the wood at all the African possessions, and has increased by 50 per cent the duties upon fermented liquors of foreign manufacture, whether imported direct or nationalized previously.

THE SPANISH COLONIES (IN 1895).

Before proceeding to examine the preferential treatment accorded by Spain to her colonial possessions, it may be well to point out the existing relations of these latter to the mother country.

1. Cuba, Porto Rico, and the Canaries are no longer considered as colonies, but have been declared provinces of the Kingdom, with direct representation in the Cortes. There is, however, a fundamental difference in the administration of the two former islands and No. 9-26

of the Canaries. Cuba and Porto Rico, though styled Spanish provinces, are still administratively under the "Ultramar," or colonial office, whereas the Canaries are under the administration of the home office.

2. A second group consists of the Philippines and their outlying dependencies, which are colonies without any direct representation in the Madrid Cortes. 3. A third group is formed by the Spanish settlements in the Gulf of Guinea, under the supervision of the government of Fernando Po.

4. Lastly, there are the Spanish garrison towns and adjacent territories in Morocco.

The basis of the commercial relations of Spain with all these possessions (excepting the Canaries and the fourth group) is absolute freedom for all products imported direct thence into Spain and for all Spanish goods exported direct from the mother country to the several islands.

Such is the general theory, but in practice it is not strictly applied, and certain categories of colonial goods are set apart and pay a duty equivalent to an octroi tax, but in every case below the customs duties levied on the same categories of goods of foreign origin. Commerce between the mother country and her transmarine possessions is considered as forming part of the coasting trade of the Kingdom, and as such is regulated by the general rules of the home coasting trade ("ley de cabotage"), the only exception to this being the Canary Islands, where trade with the Peninsula is restricted, for economic reasons, to the eight "free ports."

The products of Cuba, Porto Rico, and the Philippine Islands and the dependencies of that archipelago are admitted free of customs duties into the Peninsula and Balearic Islands when imported direct under the national flag, with the single exception of tobacco, which is subjected to a special royalty.

In conformity with the budget law of June last the coasting trade ("comercio de cabotage") between the Spanish transmarine provinces and possessions and the ports of the Peninsula can only be carried on in Spanish ships.

When the Spanish colonial products are carried under a foreign flag they are subject, when imported into the Peninsula and Balearic Isles, to the duties leviable under the new special tariff ("segunda tarifa") and to an octroi duty.

Until last year certain colonial food stuffs, though exempt from customs duty, were subject to the following "transitory" and municipal charges, the former imposed with the object of affording "temporary" assistance to the Spanish treasury, the latter being handed over to the local authorities:

These transitory and municipal charges were abolished by the budget law of 1892, and in lieu thereof the customs are authorized to levy a charge equivalent to an octroi duty, the list of taxable articles being at the same time considerably augmented, as will be seen from the following table:

The above table shows that a preferential treatment in regard to the octroi duty is accorded to sugar and coffee produced in Spanish colonial possessions.

Last year's budget law authorized the imposition of a special duty on brandies and spirits imported into the mother country from Cuba, Porto Rico, and the Philippines; till this has been passed the "transitory" duty of 3 pesetas 75 centavos on each hectolite of spirits produced in those islands is maintained. The following is a translation of the special tariff fixing the "regalia" duty on manufactured tobacco imported into Spain:

Special regulations are enforced with regard to the export trade of the Canary Islands, commerce with the Peninsula and the Balearic Islands being confined to the following free ports: Santa Cruz de Tenerife Oratavo, Ciudad del Real de las Palmas, Santa Cruz de las Palmas, Arecife de Lanzarote, Puerto de Calvas, San Sebastian, and Valverde.

The following products of the archipelago are admitted free of duty into the mother country: Spurge oil, almonds, lupines, French beans, vegetable alkali, chestnuts, barley, onions, rye, cochineal, sweets, straw for hats, etc.; fruits, chick-pease, seeds, maize, archil, potatoes, filter-stones, fish, flagstones, silk in cocoon, raw and worked, wheat, and wine.

Common sugar made in the islands from indigenous canes is also admitted free of customs duty, provided--

(1) That it is exported from one of the three ports of Santa Cruz de Tenerife, Las Palmas, or Santa Cruz de las Palmas.

(2) That the manufacturer's certificate is signed by the mayor of the district in which the manufactory is situated.

(3) That the quantity of sugar imported does not exceed a certain specified amount in proportion to the license duty. (4) That the importer of Canary sugar pays the octroi duty imposed on sugar in the ports of the Peninsula.

Food stuffs, fruits, and effects imported into the Canaries from the Peninsula and the Balearic Isles lost their nationality of origin, and would be considered as foreign goods reimported into Spain.

On the other hand, merchandise the produce of and arriving from Spanish transmarine possessions which touch at the Canaries preserve their nationality of origin on reaching the Peninsula, the merchandise being considered as having been merely in depot while in the ports of the archipelago.

The settlements on the coast of Morocco, Ceuta, Melilla, Alhucemas, Penon de la Gomera, and the Chafarine Islands are subject to a separate customs arrangement.

Food stuffs, fruits, and effects, no matter what may be their country of origin, imported into Spain from these ports are treated as foreign goods and have to pay duty as such.

Fish and munitions of war are imported into Spain from these settlements free of duty.

The Spanish possessions in the Gulf of Guinea, consisting of the Islands of Fernando Po, Annobon, and Corisso, and Elobey, and Cabo de S. Juan on the African mainland are treated much more favorably, and the produce of these settlements imported direct into Spain is admitted free of duty, the commerce with the settlements being considered as coasting trade. Moreover, the duty on all produce of the west African Coast exported direct from Fernando Po and its dependencies into Spain is reduced to three-fifths of the customs duty fixed in the general tariff, but if such produce is unloaded at and reshipped to Spain from the Canaries it is considered as foreign goods and taxed accordingly on arrival in the Peninsula.

Cocoas in grain, ground or in parts, and cocoa butter imported from Fernando Po are subject to a tax equivalent to an octroi duty in place of the former transitory and municipal charges.

With this solitary exception, all goods produced in and arriving direct from Fernando Po and its dependencies are admitted into Spain free of duty.

With regard to the bearing of the most-favored-nation article in the commercial treaties on the preferential treatment accorded by Spain to her colonial possessions, I am assured by competent authorities that there is no present intention of changing the commercial regime now obtaining in respect to the Spanish colonies. They are, and as far as known will continue to be, treated on another and more favorable footing to that accorded to all foreign countries. The list of articles liable to the "droit de consommation," or octroi duty, may be (as it was last year) modified from time to time according to the exigencies of the Spanish treasury, but every effort will be made to maintain, and, if possible, to strengthen the commercial ties which bind the Peninsula to her outlying possessions.

BELGIUM.

Imports into Belgium from the Congo State enjoy no preferential treatment, but continue to be treated merely on the footing of imports from the most favored nation. As regards exports from Belgium to the Congo State, the independent State is precluded by the stipulations of the general act of Berlin from giving them any special advantage.

QUESTION VI

THE COMMERCIAL RELATION BETWEEN THE COLONY AND THE MOTHER COUNTRY-THE ABILITY OF THE COLONY TO SUPPLY THE ARTICLES REQUIRED IN THE HOME COUNTRY AND TO ABSORB AND DISTRIBUTE THOSE PRODUCED BY THE MOTHER COUNTRY, AND THE EXTENT TO WHICH THE TARIFF AND OTHER RELATIONS BETWEEN THE COLONY AND THE MOTHER COUNTRY ARE ADJUSTED TO PRODUCE THIS MUTUAL INTERCHANGE.

The questions that naturally present themselves in considering the subject of the commercial relation between the mother country and the colony are:

(A) Whether the colony can produce articles required by the home country, and whether its facilities for their production excel those of the mother country?

(B) Does the colony offer to the mother country special facilities for obtaining the articles which it produces and which the mother country requires?

(C) Does the colony require in exchange for its products the class of articles produced in the mother country, and whether they can be more successfully produced there than in the colony?

(D) Will such interchange of products between the mother country and the colony stimulate production in the colony and increase the mutual demand and interchange?

(E) Whether the colony may also prove valuable as a distributing station for the products of the home country.
(F) Whether the trade of the mother country with the colony grows more rapidly than that with other countries.

(G) Do the mutual advantages of interchange of the natural products of the colony and the mother country lead to the removal in part or in full of tariff or other trade restrictions between the two sections?

A large share of the colonies of the world are located in the Tropics and all of the governing countries are located in the Temperate Zone. Of the 140 colonies, dependencies, and protectorates of the world more than 100 are in the Tropics; and of the 500,000,000 people governed by people other than that of the immediate territory which they occupy, fully 450,000,000 are in the Tropics. Practically all of the people within the Tropics, except those on the American continent, are governed by Temperate Zone nations. It is also in the tropical colonies that commerce and commercial relations remain yet chiefly to be developed, the more advanced colonies lying in the Temperate Zone and peopled by natives of the mother country or their descendants having already developed to a great extent their commerce and commercial relations with the world and with the mother country. It is therefore with reference to the relations between the tropical colonies and the mother countries located in the Temperate Zone that this study will be directed.

(A.) CAN THE TROPICAL COLONY PRODUCE ARTICLES REQUIRED BY THE HOME COUNTRY AND DO ITS FACILITIES FOR THEIR PRODUCTION EXCEL THOSE OF THE MOTHER COUNTRY? Tropical productions now form a large share of the importations of all Temperate Zone countries. The foodstuffs, the coffee and tea and cocao, the tropical fruits, formerly considered a luxury but now a necessity, the fibers, the india rubber, the ivory, the cabinet woods, and the numerous other articles required for use in manufacturing and entering so largely into the great industries and requirements of the daily life of the entire world, form each year a larger share of the requirements and importations of the Temperate Zone countries. Mr. Benjamin Kidd, in his "Control of the Tropics," calls pointed attention to this fact. "If we turn at the present time," he says, "to the import lists of the world and regard them carefully, it will soon become apparent to what a large extent our civilization already draws its supplies from the Tropics. It is curious to reflect to what a large extent our complex, highly organized modern life rests on the works and productions of a region of the world to which our relations are either indefinite or entirely casual." (See p. 2590.)

TROPICAL AND SUBTROPICAL IMPORTS OF THE TEMPERATE ZONE AGGREGATE $1,000,000,000 ANNUALLY.

An examination of the import statements of the principal countries of the world fully justifies this assertion. The tropical and subtropical importations of the United Kingdom in 1899 amounted to about $300,000,000; including india rubber and gutta percha, about $35,000,000; tea, about $50,000,000; fibers, over $25,000,000; coffee and cacao, nearly $25,000,000; tropical fruits and nuts and nut oils, about $30,000,000, and chemicals, drugs, dyes and cabinet woods, $20,000,000.

In the United States the share which tropical products form of the total imports is even larger than that in the United Kingdom or perhaps any of the European countries in which foodstuffs necessarily form a considerable share of the imports. The importation of tropical and subtropical products into the United States, including all sugar imported, has averaged during the last decade more than $300,000,000 a year, and in several of those years has exceeded $350,000,000, or an average of about $1,000,000 per day. The principal items are: Sugar, $100,000,000; coffee from $55,000,000 to $90,000,000 annually; raw silk, from $25,000,000 to $35,000,000 annually; india rubber, from $20,000,000 to $30,000,000 annually; fibers, from $15,000,000 to $20,000,000 per annum; fruits and nuts, a like sum; tobacco, from $12,000,000 to $18,000,000 annually; tea, from $10,000,000 to $14,000,000 a year; cotton, chiefly Egyptian, from $5,000,000 to $6,000,000 per annum; cocoa, from $3,000,000 to $5,000,000 annually; and many other articles of equal importance and necessity for food stuffs or manufacture.

The import figures of other countries also show that they draw largely upon tropical and subtropical territory for their supplies. The imports of Netherlands from her tropical possessions in the Orient alone aggregate more than $100,000,000 per annum; and when