collect it. The minority do not tackle this part of the scheme.

In the next place, the great change in the bill is in the substitution of ad valorem duties for the mixed and specific duties of the tariffs of 1883 and 1890. This duty has been adopted with a particular regard, we are told, for the poorer classes. Twice in the history of the United States the ad valorem system was imposed-i.e., in 1842 and 1846-61. The two parties have always divided in regard to it. The tariff of 1842 was distinctly protective, and specific duties were mixed with ad valorem duties. The tariff of 1846-61 was Democratic, and though it adopted an ad valorem scale, it yet maintained a protection of from 20 to 40 per cent, which in those days was high protection. The discussion will no doubt continue, as there are no elements of finality in it; and the change from the specific to ad valorem now will so change the character of the statistics that the discussion of tariff questions in the United States will increase the number of inmates in the lunatic asylums.

Thirdly, the article relating to reciprocity provisions in the Act of 1890, under which the President made agreements and proclaimed them, is to be wholly done away with. In June 1892,1 and in December 1892,2 we had occasion to call attention to the peculiar character of these agreements as they bore on the mostfavoured-nation clauses of treaties in which this country is interested. It is with pleasure we notice that the majority report says—

"This section has brought no appreciable advantage to American exporters; it is not in intention or effect

a provision for reciprocity, but for retaliation. [We pointed this out in December 1892.] It inflicts penalties upon the American people by making articles of the fiscal necessities of them pay higher prices, for these other nations compel them to levy duties upon the products of the United States, which in the opinion of the President are reciprocally unequal and unreasonable. Under the provisions of this section, Presidential proclamations have been issued imposing retaliatory duties upon five articles (sugar, molasses, tea, coffee, and hides) when coming from certain countries. These proclamations have naturally led to ill feeling in the countries thus discriminated dence in which it has been claimed, against, and to diplomatic corresponwith apparent justice, that such discriminations were in violation of our solemn treaty obligations."

In expressing in December 1892 our hope that the new régime in America would have more respect for "the opinion of Christendom," we had these proclamations, agreements, and treaties in view.

It must be kept in mind that though many reductions have been made on the lines we have indicated, the new tariff is a distinctly Protective Tariff. The average rate of duties imposed on dutiable importations in 1892 was 48.71 per cent. The rate that would have been imposed under the duties in the original Wilson Bill would have been 30.31 cent, a protection which seems high, and a source of revenue which seems certain. This rate has now been raised. In view of the fact that this 30 per cent average-which in the case of particular lines of manufactured goods amounts of course to very much more- -stands in the way of the foreign exporter, we may accept with many "grains of salt" the

statements made by the opponents of the bill, that the English manufacturer is going to dominate the American market; that the growth of any sort of sugar-cane or beet in the United States will be impossible; that free salt will transfer the New England markets to England and Canada; that free flax and hemp will transfer that industry from America to India; that the reduction of the silk duties will remove all manufactures to France, Germany, and Japan; and that free coal would destroy the value of the coal deposits of thirty-one States of the American Union. We have seen, of course, that the financial fabric of the United States is a frail structure. It is hardly possible to believe that after a century of protection the manufacturing, mining, and agricultural industries of the United States are at the mercy of the effete monarchies and experimental Republics of Europe, even with a wire fence of 30 per cent to protect them.

Again, an attempt, feeble enough indeed, but well meant, has been made to encourage that long-suffering, and always delicate, national industry-native shipping. This is attempted in two ways. In the first place, it is provided that all articles of foreign production imported for the construction and equipment, or repair, of vessels built in the United States for foreign account, or for the purpose of being employed in the foreign trade, including the trade between the Atlantic and the Pacific ports of the United States, may be imported in bond; and upon proof that such articles have been used for the purpose mentioned, no duty shall be paid on them. In the second place, it is provided that a discriminating duty of 10 per cent shall be placed on all goods imported in vessels not of

the United States, unless such vessels are entitled to enter the ports of the United States on equal terms with the vessels of the United States by treaty or by Act of Congress. The free importation of foreign articles for building and equipment and repair may indeed be a valuable concession, and may be of service in the building of ships; but inasmuch as the United States has treaties, giving most-favoured or national treatment, with almost every Power in the world possessing ships in foreign trade, the 10 per cent discriminating duty will have no other obvious effect than that of increasing the number of such treaties, if there are any nations now not entitled. But the singular manner in which American public men have interpreted treaties in times very recent, may make us feel that perhaps this clause of the new tariff may afford encouragement at least to official ingenuity.

The income-tax feature of the new tariff is one that, like all the features of the scheme, requires time for development. In the meantime it is one of the most noticeable parts of the scheme. It has been hitherto supposed by most American writers on political economy that no income-tax would again be placed on American citizens till the system of protection had so stimulated the development of American natural resources, and so increased home manufactures, that importation would largely cease, the revenue from customs fall off, and some new form of taxation would become imperative. The last income-tax in the United States was imposed during the pressure of war expenditure. It was a graduated tax extending from 5 to 7 and 10 per cent, according to income. It was altered from time to time

according to the year's needs, beginning at 3 per cent and 5 per cent in 1863; running up to 5 and 10 per cent in 1866; declining to 5 per cent in 1867-70; and still further declining to 2 per cent in 1871-73, at which date it ceased altogether. The total income from this source (including personal and corporate taxes) was $347,220,897 in ten years. The present rate is 2 per cent; and it is calculated that about $30,000,000 can be collected in this way. The calculations made concerning this tax have revealed some very curious things concerning this paradise of labour and land flowing with whisky and wages; as, for example, that 31,500 persons own more than half the total wealth of the country, and that the number of persons and corporations having incomes of more than $4000 is not more than 85,000. If we assume that the 85,000 are, say, heads of families-there are no figures as to the corporations-of, say, five persons each, then we find that out of a population usually put, since 1891, for public discussion, at 70,000,000, only 425,000 persons enjoy the direct benefit of incomes over $4000. It seems incredible, in view of all we sometimes hear about American prosperity.

The general characteristics of American trade during the year ending June 30, 1893, show a number of abnormal conditions. These may be briefly indicated. The imports from Europe show an increase of $66,821,624. Of this increase, $26,558,888 came from Great Britain. The domestic exports to Europe decreased $189,106,919. Of this sum $78,991,774 consists of the decreased trade with Great Britain. The increased import from Great Britain is qualified by the fact that a large part of the increase

was in items free of duty, the dutiable articles-i.e., manufac tures being deterred by the M'Kinley tariff. The decreased export to England was mainly in bread-stuffs. The movement of gold was the most remarkable feature. We have indicated in an earlier part of this article the fact that a borrowing nation cannot pursue the rôle of a predatory picaroon among its creditors. This lesson was taught the United States in 1893. The total exports of gold to Europe ran up from $59,952,285 in 1889, to $108,680,844 in 1893; and immediately from $50,195,327 in 1892 to $108,680,844 in 1893—a very startling jump in one year. Nothing on the face of things accounts for it. The excess of exports over imports was $202,875,686, and in the nature of things a considerable import of gold ought to have taken place. But the reverse was the case. The export of gold to Great Britain jumped from $6,508,060 in 1892 to $21,415,797 in 1893, and to France and Germany there were like increases. There were no unusual disturbances in the London money-market to call for a demand for gold. Nevertheless the demand for gold on the United States was peremptory and persistent. The truth is, that capital invested in the United States and in American securities was suddenly withdrawn owing to want of confidence. "American Government and railroad securities," says the official statistician, "have been sent to this country in large blocks to be sold, while foreign investors have made limited purchases in our stock and investment markets, except when the conditions were such as to offer a special inducement to taking chances that is, in a time of distress bordering upon panic." That

so complete a breakdown should have taken place in American securities may serve as a warning against a fiscal policy which tends to produce want of confidence and a desire for reprisals on the part of creditor nations.

Those who are now joining in the insensate outcry against the House of Lords in this country, for a perfectly legitimate exercise of a well-understood part of the functions of its office-i.e., the amendment or rejection of measures which in their judgment may not have received sufficient consideration from the publicwould do well to consider the present and late attitude of the American Senate. This body, theoretically the elect of the elect, but practically the partisan choice of, in many cases, purchased legislatures, delayed for months the settlement of the Currency Question upon which the public issued its "mandate," sternly enough, in November 1892, and for a considerable time delayed, and have, in part, and in character also, altered the Tariff Bill of the House of Representatives, passed in that House after weeks of anxious and careful debate. This same body has within a few months rejected the President's nominee for the Supreme Court of the country, at the dictation of one of the most objectionable of the "Boss senators, and so maltreated the President's nominee for the post of American Minister to Italy that, after being finally confirmed in his appointment, he resigned the office in disgust. It will be well for those who think that the British House of Lords is a body with an imperfect organisation, to remember that it is a body with splendid and patriotic traditions, and that in all its history it has never thwarted the public will as

VOL. CLVI.-NO. DCCCCXLVIII.

badly, as needlessly, and as often as the American Senate has done within a period so short as to be within the memory of the most casual reader of the journals.

The question may now be briefly discussed, How long is this new tariff likely to last? The chief speakers on each side have appealed to the future; those who are in doubt as to results always do. Mr Reed, of Maine, ex-Speaker, a man of much ability, concluded his remarks, his oration, against the Wilson Bill as follows:

"We know, my friends, that before this tribunal we all of us plead in vain. Why we fail let those answer who read the touching words of Abraham Lincoln's first inaugural, and remember that he pled in vain with these same men and their predecessors. Where he failed we cannot hope to succeed. But though we fail other days in the larger field, before here to-day, like our great leader of the mightier tribunal which will finally and for ever decide this question we shall be more than conquerors; for this great nation, shaking off as it has once before the influence of a its high destiny until over the South, lower civilisation, will go on to fulfil as well as over the North, shall be spread the full measure of that amazing prosperity which is the wonder of the world."

On the other hand, Mr Wilson of Virginia, the sponsor of the new tariff, concluded as follows:

"This is not a battle over percentages, over this or that tariff schedule; it is a battle for human freedom. As Mr Burke truly said, every great battle for human freedom is waged around the question of taxation.. The men who had the opportunity to sign the Declaration of Independence, and refused or neglected because there was something in it which they did not like-thank God there were none such; but if there had been, what would be their standing in history to-day? If men on the battle2 P