tion would be violated. If the compensatory privileges should be extended to any third nation, which has given no special compensation for them, it is evident that as to that nation the grant would be gratuitous, and, by the express provision of Article XXVI., shall immediately become common to the other party, freely." "This point should not be overlooked in any serious discussion of the subject on the part of your embassy. It is evident that Germany can not apply one construction in her relations with this government and another in her relations with an European governinent." Mr. Hay, Sec. of State, to Mr. White, amb. to Germany, April 8, 1899, The passage above quoted from Mr. Carter imperfectly conveys the pur- (2) GEOGRAPHICAL DISCRIMINATIONS. § 766. "On the 26th of June, 1884, the President approved 'An act to remove certain burdens on the American merchant marine and encourage the American foreign-carrying trade, and for other purposes.' This statute contained thirty sections, relating to inspection of vessels, shipping and discharge of seamen, the liabilities of shipowners, and sundry other kindred topics. Section 14 alone related to tonnage dues, but it provided a new system for levying them which radically differed from that formerly in force. Section 14 provided that in lieu of the uniform tax of 30 cents a ton per annum previously imposed by law, a duty of 3 cents a ton, not to exceed in the aggregate 15 cents a ton in any one year, should be imposed at each entry on all vessels which should be entered in any port of the United States from any foreign port or place in North America, Central America, the West Indies, the Bahamas, the Bermudas, the Hawaiian Islands, or Newfoundland; and that a duty of 6 cents a ton, not to exceed the old rate of 30 cents a ton per annum, should be imposed at each entry on all vessels entered in the United States from any other foreign ports or places. "It was, however, provided that the President should suspend the collection of so much of the 3-15 cents duty on vessels entered from any port in Canada, Newfoundland, the Bahamas, the Bermudas, the West Indies, Mexico, and Central America down to and including Aspinwall and Panama, as might be in excess of the tonnage and light-house dues, or other equivalent tax or taxes, imposed on American vessels by the government of the foreign country in which such port was situated. "In course of time claims were presented by the governments of Belgium, Denmark, Germany, Italy, Portugal, and Sweden and Norway for the 3-15 cent rate. These claims, excepting in the case of Sweden and Norway, were based upon provisions in treaties of those nations with the United States, by which the contracting parties mutually agree not to grant favors to other nations in respect to commerce and navigation which shall not become common to the other party, either with or without expression of equivalent concessions, as the case may be. "In the case of Sweden and Norway there was a further treaty stipulation, which reads as follows: "The two high contracting parties engage not to impose upon the navigation between their respective territories, in the vessels of either, any tonnage or other duties, of any kind or denomination, which shall be higher or other than those which shall be imposed on every other navigation, except that which they have reserved to themselves, respectively, by the sixth article of the present treaty.' (Article 8, treaty of July 4, 1827.) "Article 6 referred to coastwise navigation, which the contracting parties reserved to themselves, respectively. "The question of the conflict of the provisions of section 14 of the act of June 26, 1884, with our conventional obligations having been referred to the Department of Justice, the Attorney-General, on the 19th of September, 1885, gave the following opinion: “The discrimination as to tonnage duty in favor of vessels sailing from the regions mentioned in the act, and entered in our ports, is, I think, purely geographical in character, inuring to the advantage of any vessel of any power that may choose to fetch and carry between this country and any port embraced by the fourteenth section of the act. I see no warrant, therefore, to claim that there is anything in the most-favored-nation clause of the treaty between this country and the powers mentioned that entitles them to have the privileges of the fourteenth section extended to their vessels sailing to this country from ports outside of the limitation of the act.' "This opinion was duly made known to the governments concerned. "In order to illustrate the views of those governments upon the matter, a passage may be quoted from a note of the German minister at this capital, of the 16th of February, 1886, as follows: "This rejection (of the claim of Germany) is based on the ground that that exemption, which is granted to all vessels of all powers sail-H. Doc. 551-vol 5—19 ing between the countries in question (which enjoy the 3-15 cent rate under the act of 1884) and the United States, is purely geographical in its character, and can not, therefore, be claimed by other states under the most-favored-nation clause. "I am instructed, and I have the honor most respectfully to reply to this, that such a line of argument is a most unusual one, and is calculated to render the most-favored-nation clause wholly illusory. On the same ground it would be quite possible to justify, for instance, a privilege granted exclusively to the South American states, then one granted also to certain of the nearer European nations, so that finally, under certain circumstances, always on the pretext that the measure was one of a purely geographical character, Germany alone, among all the nations that maintain commercial relations with America, notwithstanding the most-favored-nation right granted to that country by treaty, might be excluded from the benefit of the act. "It can not be doubted, it is true, that on grounds of a purely local character, certain treaty stipulations between two powers, or certain advantages autonomically granted, may be claimed of third states not upon the ground of a most-favored-nation clause. Among these are included facilities in reciprocal trade on the border, between states whose territories adjoin each other. It is, however, not to be doubted that the international practice is that such facilities, not coming within the scope of a most-favored-nation clause, are not admissible save within very restricted zones. . This law (of 1884) grants definite advantages to entire countries, among others to those situated at a great distance from the United States; these advantages are, beyond a doubt, equivalent to facilities granted to the trade and navigation of those countries, even if they do, under certain circumstances, inure to the benefit of individual vessels of foreign nations. It scarcely need be insisted upon that these advantages favor the entire commerce of the countries specially designated in the act, since they are now able to ship their goods to the United States on terms that have been artificially rendered more favorable than those on which other countries, not thus favored, are able to ship theirs. "The treaty existing between Prussia and the United States expressly stipulates that "If either party shall hereafter grant to any other nation any particular favor in navigation or commerce, it shall immediately become common to the other party, freely where it is freely granted to such other nation, or on yielding the same compensation when the grant is conditional." Such a compensation, so far as the reduction of the tonnage tax to 3 cents is concerned, has not been stipulated for by the United States in the aforesaid shipping act. Germany is, therefore, ipso facto, entitled to the reduction of the tax in favor of vessels sailing from Germany to the United States, especially since, according to the constitution of the Empire, no ton nage tax is collected in Germany from foreign vessels, that is to say, no tonnage tax of the character of American tonnage taxes in the sense of section 8, paragraph 1, Article 1 of the American Constitution, viz, those designed to pay the debts of the government, and to pay the expenses of the common defense and the general welfare.' "In the situation thus described matters remained until the 19th of June, 1886, when an act was approved entitled 'An act to abolish certain fees for official services to American vessels, and to amend the laws relating to shipping commissioners, seamen, and owners of vessels, and for other purposes.' By the eleventh section of this act the fourteenth section of the act of June 26, 1884, was amended. To the area in respect of which the 3-15 cent rate under the latter act applied, was added, the coast of South America bordering on the Caribbean Sea.' The other amendments were as follows: "As above stated, the act of 1884 provided that the President should suspend the collection of so much of the 3-15 cent duty on vessels entered in the United States from any port in Canada, Newfoundland, the Bahamas, the Bermudas, the West Indies, Mexico, and Central America, down to and including Aspinwall and Panama, as might be in excess of the tonnage and light-house dues, or other equivalent tax or taxes, imposed on American vessels by the government of the foreign country in which such port was situated. In lieu of this, section 11 of the act of 1886 contains the following provisions: "Provided, That the President of the United States shall suspend the collection of so much of the duty herein imposed on vessels entered from any foreign port, as may be in excess of the tonnage and light-house dues, or other equivalent tax or taxes, imposed in said port on American vessels by the government of the foregin country in which such port is situated, and shall, upon the passage of this act, and from time to time thereafter, as often as it may become necessary by reason of changes in the laws of the foreign countries above mentioned, indicate by proclamation the ports to which such suspension shall apply, and the rate or rates of tonnage duty, if any, to be collected under such suspension: Provided further, That such proclamation shall exclude from the benefits of the suspension herein authorized the vessels of any foreign country in whose ports the fees or dues of any kind or nature imposed on vessels of the United States, or the import or export duties on their cargoes, are in excess of the fees, dues, or duties imposed on the vessels of the country in which such port is situated, or on the cargoes of such vessels.' "The obvious purpose of the subproviso in the above-quoted extract from section 11 was to exclude from the benefit of the proclamation authorized by the main proviso the vessels of those countries which discriminated in their ports in favor of their own vessels and 66 against vessels of the United States, which is the ordinary form of discrimination, and in the absence of which no other is likely to exist. By the unfortunate employment, however, of the term such port in the subproviso, the grammatical antecedent of which term had to be sought in the main proviso, the effect of the subproviso seemed to be to exclude from the benefits of the proclamation only those countries in whose ports a discrimination was practiced against the United States in favor of the country of the port to which the proclamation applied. For example, suppose a proclamation was issued under the act of 1886, for the abolition of tonnage dues on vessels entering the ports of the United States from Amsterdam. By the terms of the act, any vessel, of whatever nationality, entering the ports of the United States from Amsterdam would have been entitled to exemption from dues, unless barred by the existence of a discrimination against vessels of the United States in the ports of the country to which the vessel in question belonged. In determining whether such discrimination existed, the inquiry would naturally be whether the government of that country discriminates in its ports against vessels of the United States as compared with its own. Thus, if the vessel from Amsterdam were British, the inquiry would be whether a discrimination existed in British ports against vessels of the United States as compared with British vessels. But, upon a strict grammatical construction of the act of 1886, it might have been argued that the inquiry should not be whether in the case supposed such a discrimination was practiced in favor of British vessels, but merely whether vessels of the United States received in British ports the same treatment as the vessels of the Netherlands, the latter being the country in which the port of Amsterdam is situated. "That such was not the intention of Congress, and that a different and more usual form of discrimination was aimed at, namely, that in favor of national as against foreign vessels, seems to be established by the adoption by Congress, when the matter was brought to its attention, of the act of April 4, 1888, the first section of which amends the eleventh section of the act of 1886 by striking out of the subproviso the words such port,' and substituting there for words which describe the discrimination which the undersigned supposes to have been intended by the original act. "The undersigned calls attention to this feature of the matter, at the present stage of the discussion, not because it had any bearing upon the treaty claims now under consideration, but in order to avoid the repetition of the terms of the acts of 1884 and 1886, which would be necessary if the subject were left to be mentioned hereafter. In the formulation of proclamations under the act of 1886 the feature just described presented a difficulty which illustrates the complicated character of the subject with which the act attempted to deal and the |