Page:The Economic Journal Volume 1.djvu/367

 THE MCKINLEY TARIFF ACT 345 within the United States is two cents per pound. The bounty begins on the 1st of July, 1891, and is to last until 1905. This bounty, though not entirely without precedent in our economic legislation, is probably a tactical mistake. It is a con- fession that a protectionist duty is equivalent to a bounty; a confession which obviously is inconsistent with the common assertion that duties are paid by the foreign producer rather than by the domestic consumer, and the other equally common asser- tion that the effect of duties is to lower rather than to raise the price of the articles on which they are imposed. While the people may be willing to impose what really is a bounty, in the disguised form of a protective duty, they are averse to the direct payment of money out of the public treasury to the producers of particular commodities. The Sugar Bounty was therefore probably a tactical mistake on the part of the Republicans; yet it was one into which they were fairly forced by the necessities of the situation. Meanwhile, athwart the general abolition of the duty upon sugar has come another set of provisions--the so-called reciprocity provisions--which throw more light than any other feature of the McKinley Act on the peculiarities of our political situation. This reciprocity provision is inserted in separate sections of the Act, quite distinct from its general schedules. It provides that the President by proclamation may cause duties to be imposed on sugar, molasses, coffee, tea, and hides, if he consider that any country exporting these commodities to the United States ' imposes duties or other exactions upon the agricultural or other products of the United States, which, in view of the free introduction of sugar, molasses, tea, coffee, and hides into the United States, he may deem to be reciprocally unjust and unreasonable.' The object is to tempt or compel other countries to reduce their duties on American products. Clearly these provisions can apply chiefly to the South American countries--to Mexico, Brazil, the Argentine Republic, and Cuba. This part of the Act has a double origin. In the first place it it connected with the Pan-American scheme of Mr. Secretary Blaine, of which so much has been heard in European countries. It has been obvious to all observers that the only effective way to bring about more intimate relations between the United States and the other countries of the American continent, has been by closer commercial relations. To this our high tariff has interposed an insuperable obstacle. By the new reciprocity provision, reduc- tions of duties on American commodities are to be sought, not by reducing our import duties, but by the threat of raising them if our