Foreign Commerce of the United States

The Civil War tariffs continued with minor revisions until the general revision of 1883. This act increased the duties on some products and reduced them on others. The general average of the rates, however, was not greatly changed. Under the Act of 1890 the protective system was greatly extended and duties were increased in that act as well as many products removed from the free list. Com pound or mixed duties were freely used in this act and the duties on many products were higher than ever before.

The high protective duties in the McKinley Act of 1890 were strongly contested in the political campaign of 1892 and after a change of ad ministration with the election of Cleveland, Congress set about revising the tariff downward. Substantial changes were made in the Act of 1894 but it was far from a free trade bill.

In 1896 the administration changed again and a highly protective act was passed in 1897. This continued in effect for an unusually long period, namely, until 1909 when duties were increased on the average still further.

With the change of administration in 1913, a new and lower tariff act was passed which continued in effect until 1922, at which time duties were again increased all along the line in the tariff act of that year. The Act of 193o still further increased the duties on most duti able products.

there are given the average ad valorem rates o duties on dutiable and upon total imports for the year immediate': following the enactment of important tariff acts since 186o. It is important to recall that these ad valorem comparisons among variou acts may be deceptive from the point of view of the amount of pro tection offered American industry. In the first place, changes in price of products may greatly affect the ad valorem calculations and in second place some of the higher duties may so reduce the imports o the products to which they apply that they have small weight in calculat ing the averages. Furthermore, the protective principle may be gradual': extended to a wider and wider range of articles for which the new dutie may be low or moderate, thereby reducing average rates. These fact probably account for the impression obtained from the table that thy ad valorem rates of duty on dutiable imports have been gradually de clining since the Civil War, whereas, as a matter of fact, the protective principle had been gradually spreading since that time with minor recessions in 1894 and 1913, until 1934 when a definite change of far, reaching movement took place.

Reciprocity in Foreign Trade Policy.

On June 12, 193z the President approved an Act of Congress which amended th( Tariff Act of 193o and which empowered him for a period o] three years "( ) to enter into foreign trade agreements witt foreign governments or instrumentalities thereof and (2) tc proclaim such modifications of existing duties and other im port restrictions, . . . as are re quired or appropriate to carry out any foreign trade agree ment that the President has entered into hereunder." No reduction or increase in any rate of duty was permitted be yond 5o per centum, nor could any item be transferred from or to the dutiable and free lists. The importance of this act, which was extended for an ad ditional three years by joint resolution of the 75th Congress approved March 1, 1937, lies in the radical departure from Congressional tariff making to what may be called scientific tariff making which it estab lished. The law provides that, before concluding any trade agreement, the President shall seek information and advice from the United States Tariff Commission, the Departments of State, Agriculture, and Commerce, and such other sources as he may deem appropriate. An interdepartmental committee, headed by the Department of State, was established to work out the details of the program and to prepare the basis upon which the United States was willing to enter into agreements with other nations. Not only are all of the expert facilities of the Government thus brought to bear on these negotiations, but aid and sug gestions from industry have been sought and utilized, thus in suring the utmost objectivity in the working out of individual trade pacts.

The underlying principle of reciprocity is to offer positive and definite inducements to individual foreign nations to co-operate in a program of mutual reduction of trade barriers in the form of lower United States tariffs on items which others wish to sell in exchange for concessions from other nations on items which the United States seeks to sell. A reduction of tariff barriers gen erally is sought by recourse to the most-favoured-nation formula bilaterally applied.