In the preferential colonies of France, the tariffs of Senegal and Guinea contain a differential in favor of French imports which amounts to seven-twelfths (58.3 per cent) of the duty upon articles not enumerated, and this may be taken roughly as the characteristic rate. The numerous classifications of textiles have specific duties with preferences on the whole somewhat greater than the fraction named. Other important articles (dutiable at higher rates) have differentials relatively smaller-on liquors, tobaccos, sugar, salt, mineral oils, arms, and powders the differentials are from one-eighth to one-half. In the complicated schedules of Oceania the widest diversity exists, but the most characteristic rates are 12 per cent upon French products with 8, 10, or 13 per cent additional on foreign goods, so that the differential is from two-fifths to a little more than one-half of the total charges collected. In their preferential colonies, therefore, the French give to their own products differentials which scarcely exceed one-half of the total charges levied; and the difference between the assimilated colonies and the preferential colonies is both in the percentage of the preferences and in the height of the rates upon which the differentials are reckoned.

In the colonies of those countries which do not pursue a policy of assimilation, there is greater diversity both as between different systems and within the colonies of single powers.

Portugal.-Except for the preferential colonies of the United States, where the preference is one hundred per cent of the duty, the percentage of preference on national goods is highest in the Portuguese colonies: In Mozambique, Guinea, and Portuguese India, 50 per cent; in the Cape Verde Islands, 80 per cent; and in the other preferential colonies, 90 per cent. In Mozambique, however, there are many items specifically scheduled on which the preferential is much greater than 50 per cent, as is also that on wine in Portuguese India. Some of the differentials on wine and tobacco exceed 90 per cent, and on the whole that figure may be taken as the characteristic Portuguese preference.

Spain.-In Fernando Po and Guinea the general preference is onethird of the 15 per cent duty-that is, Spanish goods in Spanish ships pay only 10 per cent ad valorem. But on textiles, ready-made clothing, boots and shoes, coal, jewelry, and wines other than sparkling, the preference is the whole of the specific duties. Other alcoholic beverages receive no preference, while on beer, powder, arms, tobacco, and petroleum the preference is from 50 to 80 per cent. Considering the comparative importance of these enumerated articles on which the preference is 50 to 80 or 100 per cent, the average preference in this colony can scarcely be estimated at less than 50 per cent. Spanish Morocco and the Canary Islands are under the open-door régime, but the latter has had since 1914 a differential duty of more than 2 cents per pound in favor of Spanish sugar.

Italy. The Italian colonies must be treated individually. In Eritrea, Italian goods pay at the rate of only 1 per cent; foreign goods pay, as a rule, 8 per cent, with 10 per cent on cottons and 15 per cent on linen, sugar, and oils. The preferences thus range from 873 to 931 per cent. In Somalia the preference amounts to 931 per cent on articles not enumerated, and ranges from 333 to 90 per cent

on enumerated commodities, except that there is no preference103 on arms, tanned skins, leather goods, mats, sesame oils, and manufactures of wood. Seventy per cent may be considered the characteristic preferntial rate.104 In the tariff of Libia there are fewer varieties of preference, but it is not easy to determine or define what are the amounts. The only open preferences are those on textiles and on sugar, which commodities pay preferential specific surtaxes in addition to the uniform 8 per cent ad valorem duty. As the specific surtax remains a fixed sum and as the ad valorem duty, of course, varies in amount with variation in the price of the commodities, it is obvious that with an increase in price the relative importance of the surtax in making up the total of the charges will decrease. At the time when the preferential was imposed, the preference on Italian sugar was roughly one-half of the total duty on the foreign product, while that on textiles was perhaps, generally speaking, less than onethird. The rise in prices since 1914 decreased the relative proportions. There is also a concealed preference, indefinite in amount but apparently approximating 50 per cent on many classes of Italian goods, granted by means of undervaluation at the customs. Making a rough generalization, it may be said that the Italians grant Italian products a preference of about 90 per cent in Eritrea, 70 per cent in Somalia, and about 50 per cent in the much more important colony of Libia.

British Crown Colonies.-The general rates of preference in the West Indies are simple fractions of the duties ordinarily levied: In Trinidad, Guiana, Barbados, one-half; in British Honduras, the five Leeward and the three Windward Islands, one-third; and in Jamaica and the Bahamas, one-fourth.105 In Cyprus the reduction to products of the Empire is two-fifths, one-third, or one-sixth. Thus minor fractions characterize the preferential tariffs of the British dependent colonies, in contrast to the larger differentials found in preferential tariffs of the colonies of other countries. (For Fiji see p. 371.) British Dominions.-Of the four great self-governing Dominions, South Africa grants the smallest preferences to products of Great Britain and the sister Dominions. The tariff schedule contains 30-odd items upon which the duties are specific, and on these the preference ranges from one-fifth to one-thirteenth of the full rate. Ad valorem rates of 15, 20, and 25 per cent are levied on a great number of manufactured articles, and upon these the preference is 3 per cent ad valorem, or from one-fifth to one-eighth of the full duty. There is also a long list of articles-74 items-which are dutiable at 3 per cent, if of foreign origin, but free under the preferential schedule. On the other hand there is a list of 54 items which enter entirely free, and upon which there is, therefore, no preference.

In Canada the rate of preference to British goods has been somewhat altered from the one-third at which it was placed in 1900, but the departures from this fraction are not wide; the preference rises to

103 The nonpreferential items pay 10 per cent regardless of origin; both the duty and the absence of preference are for the protection of native industry.

104 This is the rate on cottons, which make up one-half of the total imports. The differential on spices is 333 per cent; otherwise the smallest is 50 per cent.

195 The fractions named are those specified in the agreement of 1920 with Canada, except that the Bahamas, in ratifying the agreement, voluntarily increased the preference from one-tenth to one-fourth.

one-half only upon a few items dutiable at 5 and 10 per cent, respectively, in the two schedules,106 and on a number of items it is only one-fifth. A considerable number of articles have no preference, since they are free from all sources, or, less frequently, they have only one rate. The articles free from Great Britain but dutiable from other sources are very few and dutiable at only 5 or 10 per cent. 107

In Australia the preferences upon articles dutiable at ad valorem rates are very similar to those of Canada. In a few cases the preference amounts to one-half, but usually it is two-fifths, one-third, or one-fourth, except for some items otherwise dutiable at 5, 10, or even 15 per cent, which are free under the preferential schedule. Upon items dutiable at specific rates the same and similar fractions prevail; but, e. g., upon brandy, gin, and rum the preference is one shilling per gallon, which comes to only one twenty-eighth to one-thirtieth of the duty levied upon the foreign product; upon cigars the preference is one-eleventh; and on cigarettes, one twenty-second. On other tobacco, sugar, and many miscellaneous items there is no preference. (Rates and differentials have been further increased in 1921.) New Zealand has less extensive schedules than Australia and lower rates. The preferential reduction found most frequently is one-third, but there are a few exceptions where the preference is as high as two-thirds, and a greater number in which it is a fraction smaller than one-third. On the other hand, there are a larger number of items than in Canada or Australia upon which the ordinary duty is 10 or even 20 per cent and which are admitted free from the British Empire. (But see p. 778 for tariff of Nov. 3, 1921.)

Outside of South Africa, where the preferences are much smaller, the characteristic preference of the Dominions is evidently one-third, with the entire remission of duty on a small number of items dutiable chiefly at low rates.

The fraction one-third is less characteristic of the preferences found in certain British Crown Colonies, but it is characteristic of the differentials introduced in 1919 in the tariff of the United Kingdom, and while the chancellor of the exchequer, Austen Chamberlain, was not then "propounding the general tariff policy" of the country, he stated that one-third was "what I may call the general Empire rate, so far as a general Empire rate exists."

ABSOLUTE AMOUNT OF PREFERENCES.

Up to this point the amounts of the preferences have been referred to in terms of fractions or percentages of the rates of duty on foreign products. By this criterion the preferences of the United States and Japan rank easily first, as these countries maintain in their assimilated and preferential colonies differentials of the whole of the charges levied. After them, in descending order, come the colonies of Portugal, France, Italy, Spain, the British Dominions, and the British Crown Colonies. This method of indicating and comparing the amounts of the preferences is comparatively the easier.

106 There is one item dutiable at rates of 15 and 30 per cent.

107 Except that certain vessels, and the bags, barrels, or other containers in which salt is imported, are dutiable at 25 per cent if of foreign origin. Wines are dutiable at uniform specific rates, but there is an additional duty of 30 per cent ad valorem on foreign wines. South African wines pay only 25 cents a gallon.

but consideration based on determination of the absolute amounts of the preferences is much more important. But it should be noted that a small differential on a standard commodity-for instance, sugar or cheap cottons-is of much greater consequence than is a differential of like amount or percentage on less standardized goods such as machinery, ready-made clothing, and large classes of manufactured articles of types wherein articles of widely varying prices compete with each other. Fashions are of some importance, even in Africa, though it is generally understood that the natives of Africa, India, and Oceania show less discrimination in regard to quality and pay more conclusive attention to price than do purchasers in America and Europe. Again, where the preferences differ for different articles it may be found that some even of the largest have actually no effect on trade, for the reason that even with this advantage the industries of the mother country are not in position to compete, or that, on the contrary, foreign competition is nonexistent-as might be shown by comparison with neighboring neutral markets. In other words, even a general comparison of the absolute amounts of the preferences gives only rough results. For an accurate determination of the effects of differential tariffs, a historical trade study, item by item, would be necessary.

Without undertaking a detailed comparison of the height of the schedules in the various colonial tariff systems, it appears that on the basis of the absolute amounts of preference the order in which the systems have been ranked above would have to be somewhat changed. The United States, Japan, and France all have high protective tariffs, and, with some exceptions in the French colonies, the rates of their national tariffs apply in their assimilated colonies.108 The French tariff rates are higher than those of the Portuguese colonies, where most of the rates range from 5 to 20 per cent, so that the absolute amount of the preference is considerably greater in the French assimilated colonies than in the Portuguese, where, moreover, the preference is less than the whole amount of the duty. The greatest absolute preferences are found, therefore, in assimilated colonies, and in regard to them the preferences granted by France, Japan, and the United States would rank in the same order as that in which their national tariffs would fall if arranged according to the height of their rates, respectively.

Among the preferential colonies (as distinguished from the assimilated) the Philippine Islands have apparently the highest rates of duty, and as the preference there is the whole amount of the duty the differentials are obviously greater than those which prevail in the British Dominions or in the colonies of Italy, Spain, Portugal, and Great Britain. The British Dominions also have high rates of duty; of the rates found with some frequency in their schedules the maxima are 25 per cent in South Africa, 35 per cent in Canada, 371 per cent in New Zealand, and 45 per cent in Australia.109 In the Australian tariff of 1920, out of 583 differential items, the differential on 367 items is 10 per cent and on 136 items 15 per cent ad valorem. Assuming an equivalence of the items, the average differential comes to about 11.5 per cent. The Canadian and New Zealand

109 The charges levied under names other than customs duties lessen the figure for the percentage of preference accorded in general to French products but do not affect the absolute amount of that preference.

100 Practically the only higher ad valorem rates are those on spirits.

preferentials, which average about one-third of the full duties on the preferential items, probably average under rather than over 10 per cent ad valorem. The Italian colonies appear to have duties lower on the whole than those of the Spanish colonies of Fernando Po and Guinea, whence it is a question whether the larger percentage of the preference in the former is as important as the smaller percentage in the latter.

The various rates of the different Italian and Portuguese colonies are hard to compare, but the Portuguese reach higher maxima, and as their differentials average higher in proportion their preferences are probably higher than those of Italy. The British Crown Colonies, in which the differentials are only one-fourth to one-half of the moderate rates of duties, have evidently the smallest discriminations in favor of the mother country. On the basis of the absolute height of the differentials it would appear that the assimilated colonies of France, Japan, and the United States should be grouped, followed in descending order by the Philippine Islands, then by the Portuguese preferential colonies, the British Dominions, the preferential colonies of Italy and Spain, and finally by those British Crown Colonies which employ preferential tariffs.

VIII. RATES AND PREFERENCES IN COLONIAL EXPORT DUTIESSUMMARY.

Before the war export duties had been generally dropped from European fiscal systems. They are forbidden by the Constitution of the United States, and those which were inherited from the Spanish régime in the Philippines were abolished in 1913 and are now forbidden by the organic law of August, 1916.110 Japan abolished the Korean export duties in 1919.110 Many of the older British Crown colonies and Dominions have no such duties, and there are other exceptions, but otherwise export duties are found as a regular part of the European colonial system. There was a tendency for these duties to disappear with the development of the colonies, but the financial requirements of the war interrupted this tendency, and led to the restoration of a considerable number of export duties and to increases in the rates of others.

PURPOSES.

Export duties on raw materials have a protective effect upon the industries using those materials somewhat the same as the effect of import duties levied upon the competitive finished products. In very few cases, however, does it appear probable that protection for local industry was an object in imposing export duties in colonies. Export duties are frequently laid upon articles where there is no further industrial process to be protected; for instance, on bananas, tea, and polished rice. They are frequently laid without distinction upon articles in different stages of manufacture; for instance, hides, raw or tanner.111

110 The only export duties in the American colonial system are those of the Virgin Islands. Their rates have been continued temporarily from the Danish régime, except that on sugar, which has been raised.

1104 But see p. 445.

111 In the German colonies, particularly German East Africa, care seems to have been taken that the duties should have no protective effect. The rate of 15 per cent on ivory, on horns, and on some shells, hides, and skins was imposed also upon articles manufactured from these materials, and the specific or smaller ad valorem rates on sugar cane, woods, matweed, and palm leaves were likewise imposed upon the manufactured products.