expiration of these agreements. It was impossible, therefore, for the arrangements to go into effect in full until July 1, 1892, a date subsequent to that of the analysis then being made by the President and Secretary of State.

Of Porto Rico Mr. Blaine could not say anything encouraging. The financial condition of that Island subsequent to the going into effect of the reciprocity agreement on the first of September, 1891, had not been such as to stimulate commercial relations. The sugar crop was a partial failure during the first year of the treaty, while the low price of sugar combining with the unfavorable sugar situation had greatly depressed affairs in the Island.

Apologies were also necessary for the trade with Santo Domingo. There had been an actual decrease during the first seven months of the life of the treaty, while during the first eight months this loss had barely been made up. This, also, was attributed by Mr. Blaine to a poor sugar crop and consequent depression.

The British colonies had not been trading with us long enough subsequent to the ratification of their treaty, which became effective only on February 1, 1892, to make it possible to state what would be the effect of the agreement. For the two months, however, no results whatever had been perceptible, our exports even falling off in the trade with Trinidad, Barbadoes, and Leeward and Windward Islands, while trade with Guiana showed but a very moderate increase.

It is now time to state our own inferences concerning the working of the reciprocity policy as applied in the McKinley Act. From what has been said it may be a fair conclusion that:

(1) Only a very slight general effect, if any, was produced by the reciprocity treaties negotiated under the McKinley Act upon our foreign trade.

(2) So far as an effect is perceptible, it is confined to a few countries, and in these countries it almost uniformly

appears that our imports increased much more than our exports.1

14

(3) So far as our exports were assisted at all, the assistance was confined to two limited groups-one containing certain cereals, and the other certain iron and steel manufactures, machinery, etc.

It would naturally be expected, therefore, that the persons who would be chiefly favorable to the reciprocity treaties of 1890 would be the producers and exporters of wheat flour and the manufacturers of machinery and of various iron and steel products. This is, in fact, the case. The most vigorous of those who applauded the reciprocity treaties were either engaged in or connected with one of these two general lines of industry. The one principally affected was that of milling, and it was from the northwestern millers that the loudest complaints concerning the abrogation of the treaties were heard. At a later date, various representatives of the millers expressed themselves most unequivocally on this subject. Speaking before the House Committee on Ways and Means in 1896, Mr. C. G. Jones, the President of the Southwestern Winter Wheat Millers' Association, put the argument very plainly:

"We want reciprocity with the nations that wish it with us, and statutory authority for prompt and effective retaliation against those that rear insurmountable barriers against our commerce. The merits of our products, our ability to place them in the markets of the world, better and cheaper than the breadstuff producers abroad do or can, and the fundamental laws of trade entitle us to all we ask. * * * The evil effects resulting from the abrogation of our reciprocity treaties with several nations have impressed upon the breadstuff exporters of the United States very forcibly the folly of abandoning a system that admits of profitable interchange of products between this and other countries in lieu of a system that has most seriously interrupted international traffic without any promise of future gain in any direction."

While, however, it is thus true that some gains were made

14 Mr. Worthington C. Ford explains this preponderance by the fact that the imports were valued by the Bureau of Statistics in depreciated South American

currency.

in our flour exporting trade in consequence of the treaties, and while it is unmistakably the case that the millers and flour exporting interests vigorously favored reciprocity in 1896, there are several matters which deserve to be borne in mind in connection with the alleged stimulus given to our flour exports under the McKinley Act. The truth is that the rapid increase in flour exports after 1890, which reached the total of 16,859,533 barrels in 1894, was only to a limited extent due to the working of the reciprocity agreements. There had been a marvelous growth in the milling industry between 1880 and 1890, during which time our export of flour had more than doubled. The total gain in flour exports to the South American countries during the reciprocity period was only 950,346 barrels, while total exports of flour in 1891 were 11,344,034 barrels and in 1894 16,859,533 barrels, a gross gain of 5,515,499 barrels. Hence not more than 17.2 per cent. of the gain was due to increased exports to the South American reciprocity countries. The fact is that the increase in our exports to these countries during the reciprocity period was hardly proportionate to the general increase in our flour exports the world over. It would seem, therefore, that the unmistakable decline in exports which appeared to follow the abrogation of the treaties was due to some cause quite apart from these agreements themselves. This cause is found in the growth of strong competition with the United States in wheat growing and flour milling. With such a country as Brazil, for example, a reciprocity treaty was practically powerless to put the American seller into a position where he could compete on favorable terms with the Argentine miller. The crop of wheat in Argentina was increasing enormously during the years subsequent to 1890, and the exports, both of wheat and of wheat flour, from that country to the other South American countries were such as to drive the American miller from the market as soon as time for the strength of the movement to show itself had been granted. Not only was the product of our northwest

ern mills subjected to freight rates vastly higher than those paid by citizens of Argentina, but the Argentine miller, being in close connection with the consumer of the surrounding countries, was able to save a broker's commission and interest on the capital tied up in the wheat during its long journey from the United States to find a market in South America. In short, it seems enough to say that, whatever advantages seem to be due to the reciprocity treaties in our flour milling trade, they are no greater than were contemporaneously gained in trade with non-reciprocity countries, while the disadvantages apparently accruing from the later abrogation of the treaties with those countries were as clearly due to the growth of "an aggressive competition and improved local conditions of supply."

In the case of Germany and Austria-Hungary the course of our trade was very clearly explained by the minority of the Ways and Means Committee who, in the report of 1896 already referred to, made the following remark:

"In 1891 the crops of Europe were extremely poor and we exported in 1892 great quantities of wheat and flour. Later than this, a tariff war between Germany and Russia broke out, and Germany bought grain from us instead of from Russia. Then, the Argentine Republic appeared as a great exporter of wheat and Germany was one of her best customers; what she bought of Argentina, of course, diminishing her requirements from us. Finally, the tariff war with Russia was terminated and Germany resumed buying grain as usual from Russia and her purchases from us fell off rapidly."

CHAPTER VIII

THE ABANDONMENT OF RECIPROCITY

It would perhaps be hard to say whether the defeat administered to the Republicans in the autumn of 1892 was or was not really due to dissatisfaction with the existing tariff. The Congress which was elected as a successor to that which had passed the act of 1890 contained three Democrats to every Republican member. It was a surprising and crushing defeat for the ruling party-a defeat the like of which had never before been witnessed. Old and settled Republican States promptly turned into the Democratic column, and the fact that the tariff question played so commanding a part in the campaign was enough to warrant the opinion that the victory was essentially a success for revenue reform. In the face of all this powerful reaction, the feeble efforts made by the Republicans to stave off the impending Democratic victory in the Presidential campaign by their supposed attempt to broaden our markets, and to let down the protective bars through the reciprocity treaties, was an utter failure. When the voters were called upon to choose between Mr. Blaine, the strong advocate and rejuvenator of the reciprocity policy, on the one hand, and Mr. Cleveland, the antagonist of reciprocity and the strong supporter of tariff revision, on the other, the result was almost certain.

Contemporary with the victory of President Cleveland was a fresh Democratic victory in the Congressional elections, which assured predominance to the Cleveland administration in both branches of the Federal Legislature during the years 1893-1895. It was the high tide of the reform sentiment, and there was