the above changes was reported to the full committee on finance, and made public; but, owing to pressure brought to bear by Democratic senators who still remained dissatisfied, further important changes were subsequently made. Finally, on March 20, as already stated, the amended bill was reported to the senate by Mr. Voorhees, and April 2 fixed as the date for the discussion of its provisions. The most striking of these latest changes were the further increase of the duties on collars and cuffs from 45 to 55 per cent, and on linen shirts from 35 to 50 per cent; and the insertion of a clause abrogating all the existing treaties of reciprocity concluded under the McKinley law of 1890. Among other changes found in the bill as finally reported to the senate the following may be noted:

A very important amendment was made in the section governing the manufacture of tobacco, which was intended to prevent the sale of leaf tobacco by dealers from competing with the sale of manufac tured tobacco, but was so worded as to protect the farmer and grower of tobacco in his right to sell his own product without the payment of a

tax.

In the income tax the senate committee originally struck out the provision of the house bill that this act should not apply to the income or dividends of building and loan associations. As finally re. ported the bill was intended carefully to guard against taxing bona fide building associations, the paragraph reading as follows:

"That this act shall not apply to the income or dividends received or paid by such building and loan associations as are organized under the laws of any state, territory, or the District of Columbia, and which do not make loans except to shareholders for the purpose only of enabling such shareholders to provide for themselves homes."

The schedule for wool and its manufactures, silk, and silk goods, was left unchanged. Pineapples, bananas, and cocoanuts were added to the free list. No articles were removed from the free list as first reported by the committee.

Section 105 of the previous senate bill, which directed the president to notify the government of Hawaii that the United States intended to terminate the treaty of June 3, 1875, as provided in the fifth article of that treaty, at the expiration of twelve months from the time of notice, was omitted from the bill as finally reported.

The date for carrying the general provisions of the bill into effect was fixed for June 30 instead of June 1 as proposed in the measure which passed the house.

There is still a profound dissatisfaction among the Democratic senators with certain provisions of the bill,

particularly those relating to the income tax and the taxes on sugar and whiskey; but what the development of the senate debate will bring forth cannot even be conjectured at this stage. An additional element of uncertainty has been created by the president's veto of the Bland bill for coining the silver seigniorage. This occurred too near the close of the quarter to allow of any indication as to how it would affect the attitude of the silver senators toward the tariff bill.

It is generally admitted that the bill as amended by the senate committee will yield more revenue than as it passed the house; but as to how much more, the widest difference of opinion exists even among the experts of the senate committee and the treasury department. The basis of all calculation, of course, is found in the statistics of past consumption of dutiable articles; but, as compared with the consumption during the last fiscal year, there has already been a great decrease, and none can tell how much of it will continue, or how long. Nor can anyone tell to what extent the purchasing power of the people will be affected by the industrial changes which will follow the passage of the bill, or by the rise and fall in prices which the addition or removal of taxes will involve. Even the manufacturers, who know as much about it as anyone else, are yet at sea in their calculations as to future enlargement or curtailment of home industries, and as to future adjustments of the rate of wages, upon both of which the purchasing power of the people, and hence the amount of government revenue, largely depend. The reduction in the volume of business is already about 30 per cent as compared with last year; and in foreign imports since January 1, about 30 per cent.

The committee estimates that the tariff clauses will yield a revenue of about $165,900,000; the whiskey tax an increase of about $20,000,000; and the income tax a revenue of about $30,000,000. Chairman Voorhees is reported as estimating that the bill as a whole will yield a surplus of $40,000,000. However, the estimates on the income tax range from $20,000,000 to $50,000,000; and the estimates of the uncertainty attaching to the revenue as a whole range as high as $80,000,000. The consumption of such articles as sugar, whiskey, and tobacco will undoubtedly be affected by the increase of cost which higher taxes will involve.

Mr. Carnegie's Letter.-One of the sensational incidents of the general tariff discussion was the publication

in the New York Tribune of January 8, of a letter from Mr. Andrew Carnegie, favoring a moderate Democratic tariff such as that embodied in the Wilson bill. It contained suggestions intended for the manufacturers of the country and the Republican members of congress. Speedy action was necessary, owing to continued failures and general stagnation of industry; and in order to accomplish it, Republicans and Democrats should unite upon a plan of moderate concessions, and pass the Wilson bill with reasonable modifications. It would be better, Mr. Carnegie claims, to have a moderate bill passed by the Democrats than a high protection bill passed by Republicans, for the reason that a large number of people believe that the McKinley tariff is unjust and oppressive, and that ill feeling has been aroused by it between employers and employed. The obliteration of this ill feeling is of the first importance, and this can be accomplished by co-operating with the party opposed to the present tariff in passing a moderate Democratic tariff. Such a settlement of the question would take the tariff out of politics for a long time.

"I believe," says Mr. Carnegie, "the Democratic party would make reasonable modifications in the Wilson bill. There are quite enough Democratic senators who would unite with the Republicans upon the platform of moderate concessions, and the danger to the peace of the country, in my opinion, lies chiefly in the fact that some Republican senators may refuse to co-operate with these. * * *

I submit that it is far better to obtain a moderate Democratic tariff bill, securing us stability and permanence satisfactory to all, rather than a high protective bill passed by the Republican party, and certain to be the object of continual political attack. We all know that uncertainty in regard to import duties is ruinous to our interests. I am not without grounds for believing that it is in the power of the Republicans in the senate to obtain the necessary modifications required in the Wilson bill to make it one such as our industrial system can adapt itself to and prosper under. *** What seems most desirable in the interests of manufacturers of the United States is that a tariff bill should be passed by the Democratic party, and, thereby, that the suspicion that even one 'robber tariff baron' exists in the broad domain of the republic cannot remain in the mind of the most ignorant citizen. I for one am quite ready to accept greatly reduced duties-judiciously framed— to accomplish this result."

Coming from one of the wealthiest manufacturers in the country-one of that so-called "robber tariff baron" class, whose interests have been by many peculiarly identified with the McKinley law-this letter naturally attracted much attention.

Reciprocity Treaties Abrogated.-Ever since the

accession to office of the present Democratic admimstration there has been more or less discussion as to the fate of the reciprocity treaties negotiated during President Harrison's term, under the Aldrich amendment to the McKinley law of 1890. In the platform of the Democratic party the policy of reciprocity is discountenanced. Readers of Current History are well informed as to what that policy means. In a word, it is to grant the privilege of a free market in the United States to those countries alone which are willing to reciprocate by granting in their markets exceptionally favorable rates of entry for American products. In previous issues, we have also traced the development of our foreign trade and the other results which have followed the negotiation of the treaties with Brazil, the Spanish West Indies, Germany, and other countries.

Though originally making no direct reference to reciprocity, the Wilson bill as reported to the house was in principle an abrogation of the policy. It threw open the United States market for raw sugar, coffee, and hides, un conditionally; whereas the freedom of that market under the reciprocity policy was made conditional. In the negotiations leading up to the treaties, the United States had been able to offer inducements. Under the Wilson bill, the power to hold these out was withdrawn. It immediately became a question whether Spain, Brazil, and other countries now bound by reciprocity treaties, would care to continue in force the agreements after the inducements under which they entered into them had been unconditionally accorded."

However, before any indication of the intention of those countries could be received, the revisers of the Wilson bill in the senate cleared up the question as to the intended fate of the existing treaties. In the first revise as reported from the sub-committee on March 8, a clause was inserted specifically repealing the reciprocity clauses of the McKinley law. This, as explained by members of the committee, was not intended to affect existing treaties, but merely to deprive the executive of power to negotiate any further treaties of a like nature. It was however found, when the bill was finally reported to the senate on March 20, that a further change had been made in the clause repealing the reciprocity sections of the McKinley act, so that it now reads as follows:

"That sections 3, 15, and 18 of an act approved October 1, 1890, are hereby repealed, and all agreements or arrangements made or

proclaimed between the United States and foreign governments under the provisions of said sections are hereby abrogated, of which the president shall give such notice to the authorities of said foreign governments as may be required by the terms of such agreements or arrangements."

At the same time, the clause repealing the convention of 1875 with Hawaii was omitted.

This was a concession to those senators interested in sugar. In its effect, it is a protection to the sugar of Louisiana and Hawaii; imposes a duty on about 92 per cent of the imported sugar supply of the United States; and does away with the advantages (whatever they may be) which have accrued to the export trade in American pork, farm produce, machinery, and manufactures, to Germany, the West Indies, Brazil, and Central America.

During the fiscal year ended June 30, 1893, the total importations into the United States of beet and cane sugars under No. 16 D. S. (Dutch standard) amounted to 3,733,040,266 pounds, valued at $114,955,096, of which 3,296,706,423 pounds were cane sugar and 436,333,843 beet sugar. Of the total amount imported, 2,973,854,622 pounds, or about 80 per cent, were produced in countries with which the United States has reciprocity agreements.

Of the total amount of beet sugar (below No. 16 D. S.) imported, 34,223,342 pounds came from Austria-Hungary and 325,503,840 pounds from Germany; and of the total amount of "cane and other sugars imported, 15,836 pounds were produced in and imported from Guatemala, 218,450 pounds from Salvador, 332,967,481 pounds from the British West Indies, 64,035,840 pounds from San Domingo, 1,843,651,095 pounds from Cuba, 99,578,182 pounds from Porto Rico, 114,598,997 pounds from Brazil, and 159,061,559 pounds from British Guiana. With all of these countries reciprocity agreements are in force.

In the same year the importations of sugar under No. 16 D. S. from Hawaii, which came in free under the treaty of 1875, amounted to 288,517,929 pounds, or about 8 per cent of the total importation.

In the same year the total importations of sugars above No. 16 D. S. amounted to only 33,405,081 pounds.

Vol. 4.-4.