ures in the United States numbered 4,512, or exactly 700 more than in the corresponding period of 1895. The largest number in any previous first quarter was in 1885, when the total was 4,050. The total liabilities in that quarter amounted to $41,464,000; but in the first quarter of 1896 the amount of liabilities was $62,513,000.

Textile Industries.-The condition of these industries throughout the quarter was one of great depression. At the end of the quarter the signs of improvement were not encouraging. The tendency was still downward. In the last week of June fourteen announcements were published of the closing of woolen mills, and only one announcement of increase in hours of work. Most of the cotton mills in New England announced a stoppage of work for two weeks in July and two weeks in August. In the middle of June there were 3,000,000 pieces of print cloth on hand unsold, with prices the lowest ever recorded.

Mercantile Sentiment.-At the end of June the mercantile situation was on the whole satisfactory, in spite of the usual depression incident to a holiday season, and especially a holiday season during a political campaign. There was no general desire shown on the part of merchants to borrow; on the contrary, the tendency had for some time been to bring their affairs more nearly down to a cash basis. Thoughtful men were desirous of being out of debt. They knew that, whatever might be the ultimate benefits or disadvantages to accrue from the adoption of the free coinage of silver, the result for a time, longer or shorter, could not fail to be great confusion while a readjustment of values to the new standard was in progress.

THE RECIPROCITY POLICY.

Owing to the important place assigned to the question of reciprocity in the republican national platform of 1896 (p. 258), special interest attaches at this time to the history of the working of the treaties which were concluded in accordance with Section 3 of the McKinley Tariff act of 1890, and were abrogated by the democratic 53d congress in 1894. A full record of the incidents connected with the negotiations of each of those treaties, of their bearing upon the expansion of American foreign commerce, and the effects of their repeal, will be found in preceding numbers of CURRENT HISTORY.* Under the McKinley law,

*See Vol. 1, pp. 90. 92, 218, 281, 313. 348, 350, 409, 477, and 560; Vol. 2, pp. 6, 126, and 336; Vol. 3, pp. 21, 559, and 687; Vol. 4, pp. 47, 286, 555, and 778; Vol. 5, pp. 52 and 54; Vol. 6, p. 131.

it will be remembered, the president was empowered to suspend the free introduction of sugar, molasses, coffee, tea, and hides from any country imposing upon American products duties in his opinion reciprocally unequal and unreasonable. The rates of duty to be levied during such suspension, were fixed by the law. Under this act treaties of reciprocity were concluded with Brazil, Spain (for Cuba and Porto Rico), Germany, Austria-Hungary, San Domingo, Honduras, Salvador, Guatemala, Nicaragua, the British West Indies, and British Guiana. While differing in details, the general principle underlying all the conventions, was to grant the privileges of the American market to foreign products only on condition of securing for American products reciprocal advantages in foreign markets. In 1894 the democratic tariff legislation of the 53d congress annulled the treaties and ignored their principle.

Working of the Treaties.-With the exception of some special lines-notably flour-it does not appear from the returns of foreign trade in recent years that the reciprocity treaties were accompanied by the full degree of expansion in American foreign commerce which the framers of the treaties had expected. It should, however, be noted that all economic causes, whatever may be their natural tendency, are liable in actual working to be interfered with by the operation of other principles whose real bearing may be overlooked; so that any conclusion regarding the expansion or falling off of exports or imports may require to be qualified in the light of a more extended knowledge of the active principles at work. Except in the case of the Spanish West Indies, there was no marked general increase of American foreign commerce during the life of the reciprocity treaties, and no marked general decline immediately following their abrogation. The following are the figures of our trade with Germany since 1888:

ary 1, 1892 (Vol. 1, p. 477), or after the middle of the fiscal year 1892. In that year there was a very large export, but in 1893, wholly under reciprocity, the exports were less than in 1890 or 1891; in 1894 there was an increase, but the export for 1895, nearly all of which was subsequent to the termination of the agreement, was the same as the previous year; the exports for the current year show a considerable decline.

In the case of the treaty with Brazil, the earliest reciprocity treaty concluded, which went into operation April 1, 1891 (Vol. 1, p. 92), the year 1892 showed but little increase in the American export trade; 1893 and 1894 showed considerable decrease; 1895, part of which was subsequent to abrogation of the treaty, showed increase; while estimates for the fiscal year 1896 show no falling off. Figures are given as follows:

On the other hand, the effect of the treaty with Cuba and Porto Rico was undoubtedly a large increase in American exports, due to the concessions secured from Spain, as the following figures show:

FOREIGN TRADE WITH CUBA AND PORTO RICO.

The temporary schedule took effect September 1, 1891; and the permanent, July 1, 1892 (Vol. 1, p. 348). An almost immediate result was that the United States secured a large part of the flour trade of Cuba, which Spain had held before the treaty and which Spain has since resumed. We should bear in mind, however, that our exports to Cuba and Porto Rico had shown some increase before the treaty was signed, and that the enormous falling off in

1895 and 1896 is in part accounted for by the curtailment in the purchasing power of the Cubans due to the low price of sugar and the demoralization accompanying the present war in the island.

No reciprocity treaty was made with Venezuela, the result being that the duties imposed in the United States caused a transfer of Venezuelan coffee exports to Europe, and our imports from the republic fell off about two-thirds. Our exports thither have, on the other hand, shown but little change.

The reader will form his own opinion from the results noted above, as to the efficiency of the reciprocity policy. It is undoubtedly effective in special circumstances and along special lines; but there are also other conditions. which operate materially to expand or to contract foreign

commerce.

On May 28 a report on the whole subject of reciprocity and the present condition of the American export trade, was submitted to the ways and means committee of the house of representatives by a sub-committee (Mr. Hopkins of Illinois, chairman) consisting of the republican members, who had for some time been conducting an investigation. Statements were gathered from many representatives of the various arts and industries interested. The report is of course a partisan one, but is interesting to all students of this important subject. A summary of it is here presented.

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A "remarkable unanimity" was noted as to the value and results of the reciprocity arrangements and the disastrous effect of their repeal. In the case of Germany, it is stated, the treaty removed the embargo which had been placed on American products in 1880, admitted free a number of agricultural products and many more at a greatly reduced rate of duty. For twelve years the United States had tried to accomplish this by diplomatic negotiations; but it had always failed until the adoption of the reciprocity policy enabled the secretary of state to offer the Germans a compensation which they deemed equivalent in the free admission of their beet sugar to the United States."

The result of the repeal of the treaty with Germany in spite of the formal protest of her ambassador, has been the adoption by that country of a policy of retaliation which has been a serious blow to the American export trade thither. Sympathetic retaliation has followed from Austria, Belgium, Holland, and Denmark, until now American agricultural products are practically shut out of the markets of northern Europe, and the result is felt by every man who raises a bushel of wheat or corn, or who sen is a hog or steer to the stock yards. Thus exports of corn to Europe dropped from 52,000,000 bushels in 1894 to 23,000,000 bushels in 1895. from 84,000,000 bushels to 71,000,000. of flour of 1,700,000 barrels, and other

Exports of wheat dropped There was a loss in the exports interests suffered accordingly.

Extended mention is made of the protests filed by Austria, Guatemala, Brazil, and other countries against the repeal.

The report next dwells on the effect of the repeal on the milling and live-stock industries, which, it says, have suffered more by the revocation of the reciprocity arrangements than any other interests. One of the largest manufacturers of flour is quoted as having informed the committee that the loss to the merchant millers of this country occasioned by the repeal was at least $16,000,000 a year, or 4,000,000 barrels of flour. Large mill-owners assert that the reci procity treaties of 1890 were extremely favorable to the export trade of the United States. They kept the flour trade in a healthy condition, and were the cause of the fine development of that industry, which has placed the United States ahead of all other milling countries. The effect of their repeal is the disastrous milling trade now existing.

The fear is expressed by the committee, that the injury done to American commerce with Brazil by the repeal of the reciprocity arrangement is permanent, at least so far as flour is concerned. Under that convention, from April 1, 1891, to August 28, 1894, flour from the United States was admitted free into that country. Now there is a duty of 52 cents a barrel. Then this country had absolute control of the market. Now American wheat and flour exporters are entirely at the mercy of the Argentine Republic and the capitalists who have erected mills in Brazil to grind the wheat from that country and Uruguay.

The report shows that under reciprocity American exports of flour to the German empire increased from 9,000 barrels in 1881 to 54,000 in 1892. In 1893 these importations were increased to 210,000 barrels, with a further exportation to 286,000 barrels in 1894. One year after the abrogation of the treaty, exports of flour to Germany were reduced to 256,000 barrels. Equally interesting are the statistics with reference to the exportation of flour to France. In 1892 the value of these exports was $1,178,000, while now it has dwindled to $4,000.

Reference is made to the circumstance that nearly all the great nations are increasing their rates of tariff both for the protection of domestic industries and for revenue; and attention is directed to the utterances of Mr. Chamberlain, colonial secretary of Great Britain, on March 25 (p. 181), in which he proposed an imperial Zollverein based on free trade within and a tariff for protection without the British empire. This is a striking indication of the development of the protection sentiment in Great Britain.

Regarding trade with Latin America, the report states that last year the United States bought of the republics to the south of it products worth in the aggregate $246,000,000, and that 92 per cent of these products were admitted free of duty. During the same year it sold to them merchandise to the value of $143,000,000, which was taxed from 5 to 100 per cent on its value in their custom houses. The balance of trade against the United States, $103,000,000, was paid in gold.

The exports from England to Latin America consist of cotton goods and other wearing apparel, drugs and medicines, machinery and implements, boots and shoes and other articles of leather, hardware, railway supplies and other articles of iron and steel, and all the various forms of manufactured merchandise that enter into the wants of men. The almost uniform testimony of the merchants and manufacturers who have replied to the enquiries sent out by this commit