so vast as this in scope, or indeed even remotely comparable with it, has ever been undertaken in recorded history; and, more than this, the very conception of such a project, permanently inimical in its ostensible objectives to two of the greatest of the nations of the world, is utterly novel. There have been in the past, of course, numberless bitter rivalries, economic as well as political, between great peoples on the globe; but there is no previous instance, so far as we can remember, of the employment of every conceivable economic means by one rival or group of rivals for the incessant and indefinitely prolonged impairment of the economic forces of its antagonist or antagonists.1

So far as the most-favored-nation clause is concerned, the extent to which the Peace Conference followed the recomdations of the 1916 economic conference at Paris will appear in the outline of treaty provisions which follows.

61. MOST-FAVORED-NATION TREATMENT IN THE TREATIES

OF PEACE

The treaty of Versailles, making peace with Germany, caused that country to guarantee that

Every favour, immunity or privilege in regard to the importation, exportation or transit of goods granted by Germany to any Allied or Associated State or to any other foreign country whatever shall simultaneously and unconditionally, without request and without compensation, be extended to all the Allied and Associated States.2

There was no reciprocal pledge to Germany, but the obligation on Germany's part will cease to be effective after five years (that is, on January 10, 1925) unless the Council of the League of Nations decides, at least a year before that

'Senate Document, op. cit., pp. 59-60. Issue of July 1, 1916; article by Arthur Richmond March.

"Article 267.

date, that they shall remain binding, with or without amendment, for an additional period.1

Most-favored-nation treatment is provided for in an elaborate group of articles embracing various subjects and effective for different periods. For the reconstruction period, at least, the Allied and Associated Powers are thoroughly secured in their claim for equality in the German markets.

2

In the Treaties of Saint Germain, Trianon and Neuilly, Austria, Hungary and Bulgaria, respectively, have made the same most-favored-nation pledge. In the case of Austria and Hungary, it is agreed, however, that, unless the League of Nations decides otherwise, an Allied or Associated power shall not, after the expiration of three years, be entitled to require fulfillment of the above provision if that power does not accord correlative treatment in return.* As in the treaty with Germany, the treaties with the other Central Powers provide for numerous guarantees of mostfavored-nation treatment in various branches of commercial activity.

The Treaty of Sèvres, signed by the Principal Allied Powers and Turkey, contains no provision analogous to those cited in the other treaties of peace, but provides that

The capitulatory regime resulting from treaties, conventions or usage shall be reestablished in favour of the Allied Powers which directly or indirectly enjoyed the benefit thereof before August 1, 1914, and shall be extended to the Allied Powers which did not enjoy the benefit thereof on that date."

1Article 280.

2 The United States incorporated these provisions in its treaty of peace with Germany.

3 Articles 220, 203 and 150, respectively.

Articles 232 and 215, respectively.

5 Article 261. The Treaty of Sèvres never went into effect. It was superseded by the treaty signed at Lausanne July 24, 1923, providing for the abolition of the capitulations, but granting mutual most-favorednation treatment.

At the Paris Peace Conference following the World War, the Principal Allied and Associated Powers also concluded treaties with certain allied states which were to be the recipients of territory detached as a result of the war from enemy powers and Russia. These were Czechoslovakia, Greece, Poland, Roumania and the Serb-Croat-Slovene State. The treaties with these states contain no general most-favorednation clause relating to imports and exports, such as that included in the treaties with the enemy countries. However, they contain certain interesting provisions, of which Article 15 of the treaty with Poland is typical,—

Poland undertakes to make no treaty, convention or arrangement and to take no other action which will prevent her from joining in any general agreement for the equitable treatment of the commerce of other States that may be concluded under the auspices of the League of Nations within five years from the coming into force of the present Treaty.

Poland also undertakes to extend to all the Allied and Associated States any favours or privileges in customs matters which she may grant during the same period of five years to any State with which since August, 1914, the Allies have been at war, or to any State which may have concluded with Austria special customs arrangements as provided for in the Treaty of Peace to be concluded with Austria.1

1Article 222 of the treaty with Austria, to which reference is here made, is as follows:

"Notwithstanding the provisions of Articles 217 to 220, the Allied and Associated Powers agree that they will not invoke these provisions to secure the advantage of any arrangements which may be made by the Austrian Government with the Governments of Hungary or of the Czecho-Slovak State for the accord of a special customs regime to certain natural or manufactured products which both originate in and come from those countries, and which shall be specified in the arrangements, provided that the duration of these arrangements does not exceed a period of five years from the coming into force of the present Treaty."

The treaties with the succession states contain most-favored-nation clauses, dependent upon reciprocity, governing vessels, transit and, in some of them, a few other matters.

Viewing the war period as a whole, one may say without hesitation that the delicately adjusted most-favored-nation régime that had grown up in Europe following the Cobden treaty of 1860 was dealt a severe but not, as will presently be shown, a fatal blow by the developments of 1914-1919.

62. DEVELOPMENTS OF THE RECONSTRUCTION PERIOD

The reaction from the cooperative spirit of allied warfare is inevitably an epidemic of chauvinism. This has been preeminently true of the period following the World War and has manifested itself nowhere more definitely than in commercial relations. Tariff walls, undertaken under pressing need for revenue and economic conservation have developed into serious hindrances or even prohibitions of commerce. Great Britain has departed from its free-trade tradition and the continent of Europe has become a maze of high-tariff barriers. Systems of licensing imports and exports, or of limiting them to fixed quotas, have developed in several countries. In the midst of such conditions. changes in commercial treaties would not be unexpected.

As a matter of fact, the denunciation of treaties began before the war was over. As between hostile governments the outbreak of war terminated the treaties in force, including commercial conventions.

France, in 1918, announced the intention to terminate all commercial treaties, to which it was a party, which contained "the general clause regarding the most-favorednation or the consolidation of tariffs." With a few exceptions, however, the treaties were later continued indefinitely, subject to termination on three months' notice, and several new treaties were concluded.1

The action of France in denouncing its treaties was typical of other continental countries. Thus Greece, in

1Handbook, passim and pp. 869 et seq.

1919, denounced a number of treaties, including one with the United States. Roumania took similar action in 1921. In Russia the revolution of 1917 put an end to the existing treaty régime. In 1917, also, Italy denounced many treaties and actually terminated a number of them. Spain denounced several treaties the next year, but continued them in force for a time and later replaced them by temporary modi vivendi. Both Italy and Spain have, however, engaged in extensive negotiations and have concluded a considerable number of new treaties since the war.

In England also there was strong sentiment for denouncing treaties containing the most-favored-nation clause. Such opinion as approved the recommendations of the Paris economic conference of 1916 would naturally have supported so obvious a corollary. Mr. Bonar Law stated in the House of Commons on May 13, 1918, that the treaties would be denounced. The denunciation, however, did not take place, and notwithstanding the resolves of war times and of the period immediately following the war, Europe has not thrown overboard the ante- bellum most favored - nation treaty system. Therein lies encouragement for the new American commercial policy.

Among the succession states to the Austro-Hungarian Empire the very pressing need for commercial intercourse has forced the adoption of many arrangements, most of them temporary, for tiding over the reconstruction period. At the Porto Rose Conference of 1921 recommendations for a common-sense régime among these states received hearty approval and appear to have laid the foundation for a permanent liberalization of commercial relations. The same may be said of various treaties and conferences affecting former portions of the Russian Empire bordering the Baltic.

The Plenary Session of the Genoa Conference, held May 19, 1922, accepted a report of the Economic Commission containing the following language: