War has shown the perils of relying, in case of national emergencies, upon foreign supplies; this has resulted in the adoption of policies, one of whose chief aims is the fostering of industries producing what have been termed “essential " commodities. Amongst other reasons for increased tariff rates may be mentioned: 1. Desire to check the importation of luxuries by countries impoverished through the War and suffering from unbalanced budgets, heavy taxation and depreciated currency and exchange. 2. Desire to increase customs revenue. 3. Retaliation on the part of one country for tariff increases of another country. 4. Attempts by means of raising duties to stimulate negotiations for the conclusion of commercial treaties abrogated during or since the War. The tendency to revise tariffs upward or to introduce highly protective measures in order to serve intensified national interests and to meet the conditions of after-war readjustment is exemplified by the policy of France, Great Britain, Italy and Spain, as well as that of many of the newly formed European states. France, after having used for a time ad valorem surtaxes in addition to her specific duties, adopted, in the middle of 1919, a coefficient system which consists of announcing a coefficient of two, three, or more by which the basic tariff rate is to be multiplied until further notice. The periodic revision of the system of coefficients was entrusted to an Inter-Ministerial Commission, which has frequently during the past four years ordered the imposition of new coefficients or changes in the old ones on lists of particular commodities; partial revisions of the French tariff have thus been carried on from time to time without legislative action or sanction. The power of the Inter-Ministerial Commission to effect tariff changes lapsed on December 31, 1922. A general revision of the French tariff was planned for the spring of 1923, but, owing to unsettled economic and political conditions, it was postponed. A thoroughly revised tariff was enacted by Italy in the middle of 1921; this tariff raised duties considerably over the whole schedule of articles likely to be imported into Italy. The British" Safeguarding of Industries Act," adopted in October, 1921, imposed a duty of 333 per cent upon the importation of foreign goods competing with " pivotal" or "key" industries or of goods offered for sale at exceptionally low prices due to depreciated currencies. The states which before the War formed the AustroHungarian Empire, and which as such enjoyed the benefits of a free circulation of goods, set up after their division into separate political entities, customs barriers against each other, the aim being the raising of revenue and the obtaining of economic self-sufficiency as a corollary to political independence. REFERENCES BUREAU OF FOREIGN AND DOMESTIC COMMERCE. Modern Tariff Systems. The Nation's Business. CULBERTSON, W. S. The "Open Door" and Colonial Policy. American Economic Review, March, 1919. CULBERTSON, W. S. The Bargaining Tariff. Proceedings of the Sixth National Foreign Trade Convention, 1919. CULBERTSON, W. S. Equality of Treatment among Nations and a Bargaining Tariff. Annals of the Amer. Acad. of Pol. and Soc. Science, March, 1921, pp. 160-175. EDER, P. J. Foreign and Home Law. Course in Foreign Trade. Vol. X, FISK, G. M. International Commercial Policies, Chap. VII. KOEHLER, G. Importers First Aid in American Tariff and Custom Procedure, Chap. XLI. PATCHIN, R. H. The Need of a Bargaining Tariff, Proceedings of the Seventh National Foreign Trade Convention, 1920. Pp. 286–303. RAFFETY, F. W. (Editor). Modern Business Practice. Chaps. I, II. Vol. II, Part II, RUTTER, F. R. Tariff Systems of South American Countries. Bureau of Foreign and Domestic Commerce. Tariff Series No. 34. STERN, C. W. Importing. Course in Foreign Trade, Vol. XI. STONE, J. Dual Tariff Systems. American Economic Association Quar- Colonial Tariff Systems. CHAPTER VIII COMMERCIAL TREATIES, RECIPROCITY AND RETALIATION History. A commercial treaty is an agreement between two or more states regulating their trade relations. Such treaties can be traced back to ancient times, a compact governing commercial intercourse between Rome and Carthage having been concluded in 509 B. C. During the Mediterranean era of commerce, through the thirteenth and fourteenth centuries, commercial treaties were used by Genoa, Venice, and other Italian city republics as one of the means for establishing trade relations among themselves and with other states. In the fifteenth century, after Constantinople was conquered by the Turks, there appeared a new form of treaty, the so-called "capitulations," or grants, made by the sultans of Turkey to Christian nations and conferring on Christian traders certain privileges in the Ottoman Empire. Capitulations differ from modern international agreements in that they lack the element of reciprocity; they do not contain mutual concessions. Two pacts, one concluded at the beginning and the other at the close of the eighteenth century, may be considered as the prototypes of modern commercial treaties. The Methuen treaty of 1703 between England and Portugal removed prohibitions on the importation of English woolens into Portugal in return for preferential treatment of Portuguese wines by England, and the Eden treaty of 1786 between England and France contained provisions which led to the reciprocal lowering of many duties in the tariffs of both countries. The Eden treaty was of short duration, friendly trade intercourse between England and France having been interrupted by the wars of the French Revolution and of the Napoleonic régime. A movement toward reestablishing reciprocal relations between England and France became especially pronounced in the middle of the nineteenth century; it culminated in the conclusion of the Cobden treaty. This treaty, made in 1860, contained substantial reductions in tariff rates as well as a clause guaranteeing to both contracting parties the "most favored nation "treatment. The Cobden treaty was hailed in many quarters, both in England and in France, as a step toward the ultimate adoption of free trade. Treaties similar in character to the English-French pact were concluded in rapid succession among most European nations; they all tended toward bringing about a more liberal treatment of imports. Hopes ran high that it was merely a matter of a few years before complete freedom of commercial intercourse among all nations would be established. The treaties themselves were termed by some, rather erroneously, "commercial treaties of the free-trade era." A return toward high protection soon set in, many factors having conspired to bring about the reaction. The most important of these were the European wars which preceded the establishment of the German Empire in 1871, and the Civil War which raged between 1861 and 1865 in the United States. One of the aims of customs duties is the raising of revenue, and revenue was sorely needed at that time in order to pay the expenses of costly wars. Under the guise of providing funds for the national treasury, many old duties were raised and new duties were established the main purpose of which was the granting of protection. High protection was the more readily introduced because of the spirit of extreme nationalism which swept over Europe with the formation of the German Empire. Nationalism has as its corollary a striving for industrial self-sufficiency, for economic aggran |