Colonial Tariff Policies

That nearly one-half of the world's area now consists of colonies is d to a variety of economic and political forces. These forces have shown their influence neither continuously through modern history nor with equal effect upon different powers. Their influence was relatively ineffective during most of the nineteenth century and when the colonial movement began again about 1875 it excited but little interest on the part of the three powers which had been the first to enter the field of colonial enterprise, while powers which had previously been either nonexistent or indifferent to colonial expansion now joined in the race. The salient features of this modern colonial history may be seen to fall into three periods.

FIRST PERIOD.

The modern period of colonial expansion began in the latter half of the fifteenth century, when the Portuguese pushed their explorations down the coast of Africa and around the Cape of Good Hope to India, while Spanish expeditions crossed the Atlantic and found the continents of America blocking the westward route to the Spice Islands of the East. The Pope declared the unconquered portions of the world divided between Portugal and Spain. Before the period of its union with Spain (1580-1640) Portugal was the political equal and the commercial superior of England. During that period the Dutch, even while fighting to free themselves from Spain. ventured boldly and with striking success onto the high seas; and by 1630 they possessed one-half of the world's merchant marine. Seeking colonies as a means of trade, they took from the Portuguese most of the Spice Islands, including Ceylon. By the end of the century they had settlements in Guiana and the Cape of Good Hope.

Somewhat tardy in their entry, France and Great Britian profited by the pioneering of other nations and overcame the handicap of a late start by the vigor and effectiveness of their commercial and settlement activities. To them, in the second half of the seventeenth century, the Dutch lost much of the carrying trade. The eighteenth century found France and Great Britian the leading colonial rivals. Between 1756 and 1815 Great Britian took from France, Canada, India, and various minor colonies, and from Holland practically all of her colonies (but the Spice Islands were later restored). In the same period Great Britian lost thirteen American colonies and

1 This was the consequence much more of the enforcement of French and English navigation acts than of the wars of the period.

France sold the Louisiana Territory, all that remained of her North American colonies.2 A little later Brazil declared its independence of Portugal, and virtually all of South and of Central America esstablished its independence of Spain. This left Great Britain the foremost of colonial powers.1

Throughout this early period, colonial rivalry was dominated by the theories and practices of mercantilism and monopoly. Although there was some settlement colonization in America and at the Cape, the chief object of early colonial enterprise was the acquisition of treasure in the form of precious metals; and where these were not obtainable spices, silks, sugar, or slaves were taken for the purpose of securing money by exchange. The African and Asiatic "colonies" were mere trading stations, and even the English, onquests in India amounted simply to the occupation of areas tributary to and required for the strategic safeguarding of the ports. With certain exceptions, chiefly at the beginning and at the end of the period, monopolies were the order of the day. If the state did not keep the trade in its own hands (as in the case of Portugal), it granted monopolies to chartered companies or, later, excluded from the trade all but its own nationals. The principle of monopoly applied to all phases of the colonial trade: To the colony as a market, to the colony as a source of raw materials or commercial luxuries, and to the carrying trade between colony and mother country. The monopoly was fortified not by differential tariffs, but by absolute prohibitions, sanctioned sometimes by even a death penalty, and it was relaxed only gradually, mainly by the conclusion of commercial treaties.

SECOND PERIOD.

The six decades from the end of the Napoleonic Wars to about 1875 form a second period in colonial history. Then, as a consequence of various influences-such as the successful revolt of the Americas, the liberal and humanitarian concepts of the philosophy of the French Revolution, the doctrines of Adam Smith and his successors, the decrease in the relative importance of colonial trade, and the great expansion of markets for the manufactured products of Europe resulting from the industrial revolution-the colonial powers loosened, in different degrees and with unequal promptitude, their restrictions on colonial trade. At the same time and in some

2 Except some relatively unimportant islands. Except the Guianas and British Honduras.

At that time some of the British colonial acquisitions were commonly regarded as of slight value. At the end of the eighteenth century England would gladly have traded Canada for Guadeloupe and Martinique. Colonial trade was relatively more important then than now, but estimated by modern standards its total was insignificant. Of the 3,280 vessels which constituted the English merchant marine in 1701, it is estimated that the whole number could not have carried on long voyages as much merchandise in a year as can a single large modern steamship. Voyages to the East Indies frequently occupied more than a year. It is estimated that in the early years of the reign of Charles II, the total exports of England averaged a little over £2,000,000 per annum, and that a century later it amounted to only £16,000,000. The heavy costs of transportation limited the trade to valuable commodities, such as spices, sugar, silks, and woolens. The various parts of Europe were practically self-sufficient, with the exception of a few seaports and the industrial centers, such as those of Holland, closely connected with them. The same was true of continental America and India. The West Indies, however, were devoted to sugar raising, of which they had practically a monopoly, and they imported a large proportion of what they consumed; their trade, both in exports and imports, was therefore more important than was that of the larger colonies on the neighboring mainland. Incidentally it may be noted that as a rule the foreign trade of a small area or a small population is greater per capita than is that of a similar but larger unit, which has almost invariably more diversified resources and a greater division of labor. shall, Alfred: Trade and Industry, especially pp. 25 and 38.)

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what the same measure, the general interest in colonies declined. The idea of "barren sovereignty" aroused no enthusiasm, and in many quarters it was felt that the expenses of colonization were certain and burdensome while the profits, if any, were both uncertain and, since the ultimate destiny of colonies was independence, transient. The free-trade movement scored its greatest victory in Great Britain, and there the anticolonial movement developed its greatest strength; but among the other colonial powers, with the exception of France, indifference and inaction prevailed. In France, Louis Philippe and the government of the Second Empire went ahead with active colonial policies, with little reference to public opinion. Under Louis Philippe (1830-1848) France acquired Algeria and various islands of Oceania. Napoleon III (1852-1870) directed the acquisition of Cochin-China, Cambodia, and New Caledonia, extended the French hold on western Equatorial Africa, and made some treaties with the natives of Madagascar. He also backed the unsuccessful adventure of Maximilian in Mexico. The British, frequently in conflict with Africans and Indians, extended their sway somewhat in South and West Africa and on a considerable scale in India, in spite of resolutions of Parliament and of the directors of the East India Company. During this period, Great Britain conceded "responsible" self-government to the settlement colonies, restored the native government of Mysore, acknowledged the independence of the Transvaal, gave away the Ionian Islands, and in a number of cases refused petitions for protectorates or disowned annexations made by subordinates, both in Africa and in Oceania, including Hawaii.

THIRD PERIOD.

The third period of the modern colonial movement began after the middle of the nineteenth century, when the further development of industries and large scale production forced a keener competition for markets for manufactured goods. The Liberalism of the preceding period now yielded to the insistent demands of nationalism. The new nationalism expressed itself not only in the consolidation of the German and of the Italian states and of the Canadian provinces and in the disintegration of Turkey in Europe, but in the protective tariffs of the seventies and 'eighties, and, after the explorers had penetrated "darkest Africa." in the new phase of colonial expansion which has continued to the present day. After 1877, the area of the British holdings in Asia, Africa, and Oceania increased fourfold; France acquired all but a quarter of a million out of the total 4,000,000 square miles of her colonial empire: Germany, Italy, Belgium, Japan, and the United States acquired all of their colonial possessions."

Most of the colonial acquisitions in this third period were at the expense of rather primitive governments in Africa and Oceania or

See Chapter XII, pp. 632 ff.

6 Two-fifths of India still consists of Native States."

7 Oceania is used in this report to include the islands of the Pacific east of Ceylon and south of the Philippines and Hawaii, except Australia and New Zealand.

The figures are for the colonial empires as they existed before the war.

Alaska was purchased by the United States in 1867. For the purchase of Assab in 1869 by Italian interests, see p. 373.

of better organized states in Asia; but to a small extent the growth of certain empires represents only the change of title as between colonial powers. The United States acquired the Philippine Islands, the Canal Zone, and the Danish West Indies by purchase, and Hawaii 20 and American Samoa (including Tutuila) by amicable agreement with the existing governments.

"Protection," in theory and in practice, may be regarded both as a1 cause and as an effect of nationalism. New emphasis upon both was in no small measure contributory to the new movement in colonial expansion. To acquire a colony was to stake out a prospective preserve for national trade and to prevent exclusion from the area in question as a possible consequence of some other nation's taking it. Colonial trade became again an object of exploitation; but to insure the advantages earlier sought through prohibitions and monopolies there was now substituted the differential tariff. As early as 1877 Portugal increased the slight differential duties already in force in some of her colonies. Italy, with the acquisition of her first colony, adopted the use of differential duties. France, in the years between 1885 and 1892, "assimilated "11 most of her colonial tariffs. Japan and the United States adopted the principle of preference or assimilation.12 The self-governing Dominions first increased their protective tariffs and then introduced preferential features.

Not all countries and not all colonies, however, followed the new trend. Great Britain and Holland adhered to the free-trade principles of the preceding period, both at home and in their dependent colonies. Germany maintained an open-door régime in all the regions which she acquired. In theory, at least, Leopold of Belgium did likewise in the Congo Free State. The exceptions were thus consid-, erable in number, but some of them were of the type that "prove the rule." Bismarck, a protectionist, but without interest in colonies, embarked on colonial enterprise in deference, apparently, only to public opinion. One of his motives in proceeding to the annexation of a million square miles of territory was undoubtedly to prevent the erection of protective tariff barriers by other nations around those regions. In this his policy was well in accord with that of Great Britain, and Germany and Great Britain were able to impose a free-trade policy in regard to the whole of Central Africa. Leopold acquired control in the Congo only on condition that a freetrade régime be maintained there. In other places, too, the keenness of colonial rivalry was kept within bounds by agreements that the powers which acquired new territories would not institute discriminatory trade regulations.

These agreements will be discussed under the heading "Treaties and Colonial Tariffs"; they are mentioned here because the evidences

10 Technically Hawaii was annexed by joint resolution, but the terms of the resolution embodied the text of a treaty which the United States Senate had failed to ratify. The chief cases, in this period, of transfer of sovereignty among the colonial powers were the sale or cession by Spain of most of her colonies. Various regions over which various powers had previously claimed more or less effective suzerainty became in this period colonies: The Transvaal, taken by Great Britain; Morocco, Tunis, Tripoli, Cyprus and Egypt, lost by Turkey to France, Italy, and Great Britain; outlying regions, lost by Siam, taken by France and Great Britain; Korea, Formosa, and Indo-China, lost by China and acquired by Japan and France: Karafuto, lost by Russia to Japan. The lease of the Liaotung Peninsula, and other titles and privileges in South Manchuria which China had accorded to Russia, were transferred to Japan; and Germany, France, and Great Britain acquired territorial leases on the coast of China.

See chapter on Colonial Tariff Policy of France, p. 143.

For the delay in the application of the principle to the Philippines, Formosa, and Ka, see pp. 588, 139, and 442.

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