was conducted by American insurance companies, was greatly influenced by the fluctuations which occurred in the foreign trade, by the increased competition between marine underwriters, the incomplete knowledge of sound insurance methods, and by the Napoleonic wars. The extraordinary losses by capture and detention during these wars depleted the resources of many insurance companies. The twenty years following 1840 constituted the third or "golden period" of American marine insurance. The growth of the American ocean marine and of American trade and shipping, the increasing number of long voyages, and the high insurance rates which prevailed gave a strong impetus to the growth of the marine insurance business in the United States. This prosperous epoch was followed by one of gradual but almost continuous decline in American marine insurance. As is elsewhere stated, the deep-sea merchant fleet of the United States passed through a long period of decline which extended from the Civil War to 1913-a decline which was for some years furthered by British marine underwriters, who pursued a policy of giving preference in insurance rates to British vessels. Meanwhile, the amount of foreign competition steadily increased, foreign underwriters no longer being satisfied with such American business as came to them. During the decade beginning in 1870 they began to invade the field of American marine-insurance companies by establishing offices in the United States. In late years much the larger share of marine insurance of the United States as a whole has been written by foreign underwriters. Indeed, there are now but seven domestic companies which do a large business, and of these but one confines its activities to marine insurance. Unlike the foreign companies operating in the United States, but five American companies do an exclusively marine-insurance business, all the others depending largely or partly upon fire insurance. In the United States, as throughout the world, Lloyds' Association of London has become the controlling marine-insurance organization. Since the seventeenth century this organization has developed into the world's leading marineinsurance exchange, providing the information necessary to conduct the marine-insurance business intelligently, the regulations governing the business conduct of the members, the quarters where its members may conveniently insure risks, the rules governing the construction of vessels, and a large staff of surveyors and agents, who inspect and classify vessels at the leading ports of Great Britain, the United States, and elsewhere. In recent years there has been a tendency, especially on the part of large ocean navigation companies, toward self-insurance. Marineinsurance companies, however, continue to underwrite the ocean cargoes, the vessels of practically all the smaller lines, the almost number 'S. S. Huebner, "Development of Marine Insurance." in Annals of American Academy of Political and Social Science, Sept. 1905, pp. 267–69. less tramps which roam the seas, the vessels of the many large lines which have not inaugurated the policies of self-insurance, and a portion of the risk of the great ocean lines which partially insure their vessels in self-insurance funds. In the discussion of domestic trade, rather than of foreign commerce, the rise of large industrial corporations or so-called "trusts" was treated because their main activities have been in production and marketing within the United States. From 1890 to 1899, however, when manufacturers became important in the foreign trade, their activities were extended to foreign markets. Indeed, a large share of the success of the United States in exporting manufactures has been due to the efforts of large corporations. So long as the exports of the country consisted largely of foodstuffs and raw materials which were needed in European countries, there was little difficulty in finding foreign markets; but in the development of markets for American manufactures in competition with foreign exporters the difficulties have increased many fold, with the result that the large corporations have led and the smaller shippers have followed in their wake. With few exceptions only the largest shippers have been able to develop a direct exporting organization, with salesmen and branch houses in the field, to undertake expensive foreign campaigns, and to bring American wares effectively before foreign buyers who were in the habit of buying from European exporters. Some of them have undertaken the operation of large fleets of ocean-going vessels, for the purpose of reducing freight costs and guaranteeing a direct transportation service. CHAPTER XXX. COMMERCIAL TREATIES OF THE UNITED STATES. General commercial and navigation treaties, 135. Most-favored-nation clause, 137. Nations engage in commerce with each other in consequence of the rights and privileges which they may grant to each other. This privilege of foreign trade which one country grants to another may be, and frequently is, extended by courtesy, but it is commonly granted in formally proclaimed treaties, agreements, conventions, or other international acts. In the same way the conduct of special matters relating to commerce and shipping, such as the collection of tariff duties, the interchange of consuls, and the protection of patents, copyrights, and trademarks, may at times be left to international courtesy, with entirely satisfactory results, but such matters are nevertheless commonly regulated by treaty. When a trade privilege is granted by one nation to another in a treaty, it then becomes a treaty right which is legally binding and may properly be enforced. Commercial treaties,1 agreements, conventions, etc., may conveniently be classified as (1) general "commerce and navigation treaties," (2) special commercial treaties, (3) commercial treaties with certain countries, the trade customs of which differ from those ordinarily prevailing in international trade, and (4) international conventions, agreements, or other acts to which many nations are parties. GENERAL COMMERCIAL AND NAVIGATION TREATIES. Hardly had the United States broken away from Great Britain before the newly established nation began to negotiate commercial treaties with European powers in an endeavor to pave the way for a regular and organized foreign commerce. It was difficult at first to induce foreign nations to enter into comprehensive commercial treaties, yet a general commercial treaty was concluded with France as early as 1778 and 1800, with The Netherlands in 1782, with Prussia in 1785 and 1799, with Spain in 1795, with Sweden in 1783, and with Great Britain 'The full text of all treaties, conventions, and international agreements of the United States may be found in Treaties, Conventions, etc., between the United States of America and Other Powers, 1776-1909, compiled by Wm. M. Malloy (Sen. Doc. No. 357, 61 Cong., 2 sess., 2 vols., 1910), and Ibid., 1910-1913, of the same series, compiled by G. Charles (Sen. Doc. No. 1063, 62 Cong., 3 sess., 1 vol., 1913). These volumes contain most of the material used in writing this chapter. Use has also been made of Moore, Digest of International Law (House Doc. No. 551, 56 Cong., 2 sess., 7 vols., 1906). Reference may also be made to Fisk, International Commercial Policies (1910). in 1794 and 1815. These early treaties were narrow in scope and subject to restrictions. After the war of 1812 the commercial treaties of the United States became more comprehensive, as well as more numerous. The entire period from 1815 to the Civil War was replete with negotiations, and general commerce and navigation treaties were accepted not only by most of the countries of Europe, but also in South and Central America, Mexico, and Asia. Additional treaties of this general type have been made since the Civil War, especially with the more recently opened countries of the world, while others have expired or have been abrogated either by foreign powers or by the United States. The general commercial treaties which have so long governed the trade between the United States and many foreign nations are variously known as treaties of "peace and commerce," of "friendship, boundaries, commerce, and navigation," "friendship and general relations," "amity and commerce," "friendship, commerce, and extradition," "friendship, commerce, and navigation," and by other titles, but they are most commonly referred to as treaties or conventions of "commerce and navigation." Though these treaties are by no means identical, they ordinarily contain common provisions concerning a limited number of commercial subjects, and usually include a clause providing for reciprocal freedom of commerce and navigation, a clause which was limited and restricted in some of the earlier treaties, but which later became more general. The first commercial treaty with Great Britain, for example, Jay's treaty of 1794, specifically excepted the British West Indies and Canada from this general clause, and the treaty of 1815 did likewise. A typical statement of the usual provision for reciprocal freedom of commerce and navigation is contained in the Prussian treaty of 1828: "There shall be between the territories of the high contracting parties a reciprocal liberty of commerce and navigation. The inhabitants of their respective States shall mutually have liberty to enter the ports, places, and rivers of the territories of each party, wherever foreign commerce is permitted. They shall be at liberty to sojourn and reside in all parts whatsoever of said territories, in order to attend to their affairs; and they shall enjoy, to that effect, the same security and protection as natives of the country wherein they reside, on condition of their submitting to the laws and ordinances there prevailing." Supplementary to the general provision for freedom of commerce and navigation, a separate clause frequently stipulates certain mutual trade privileges. For example, Article 6 of the Brazilian treaty of 1828 provided as follows: "It is likewise agreed that it shall be wholly free for all merchants, commanders of ships and other citizens or subjects of both countries to manage themselves, their own business, in all the ports and places subject to the jurisdiction of each other, as well with respect to the consignment and sale of their goods and merchandise by wholesale or retail, as with respect to the loading, unloading and sending off their ships, they being in all these cases to be treated as citizens or subjects of the country in which they reside, or at least to be placed on a footing with the subjects or citizens of the most favored nation." MOST-FAVORED-NATION CLAUSE. The commerce and navigation treaties are especially important because of the "most-favored-nation" clauses which they contain. Ordinarily the most-favored-nation clause in the commercial treaties of the United States is a general clause in which the contracting nations guarantee to treat each other in the same manner as they treat the most favored nation in all matters of commerce and navigation, providing the conditions are identical. As early as 1778, for instance, the French treaty of "amity and commerce" provided that "the most Christian King and the United States engage mutually not to grant any particular favour to other nations, in respect of commerce and navigation which shall not immediately become common to the other party, who shall enjoy the same favour, freely, if the concession was freely made, or on allowing the same compensation, if the concession was conditional.” The most-favored-nation clause stated in this way has become known as the American or restricted clause, as distinct from the unconditional clause contained in the treaties between European countries. The most-favored-nation clause of some American treaties does not specifically express its restricted nature, but it is now understood by all nations that, under the American interpretation, the granting of special trade concessions to one country does not entitle all other treaty powers to such concessions unless the concessions were freely made, or unless the other countries are willing to make the same compensation as the most favored nation. European nations have at times charged the Unt ed States with a violation of the most-favored-nation clause, but such charges have usually been due to a failure to understand the restricted nature of the American clause. In addition to making the general clause applicable to all commercial matters, it is a common practice specifically to extend most-favorednation treatment in the matter of the duties on imports and exports. The Prussian treaty of 1828, for instance, although it contains the usual most-favored-nation clause, also provides that— "No higher or other duties shall be imposed on the importation into the United States of any article, the produce or manufacture of Prussia, and no higher or other duties shall be imposed on the importation into the Kingdom of Prussia of any article the produce or manufacture of the United States, than are or shall be payable on the like article being the produce or manufacture of any other foreign country. Nor shall any prohibition be imposed on the importation or exportation of any article the produce or manufacture of the United States, or of Prussia, to or from the ports of the United States, or to or from the ports of Prussia, which shall not be equally extended to all other nations." |