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 a suggestive sidelight on the working of preference in colonial interests, that a special reduction of duty by America on Cuban tobacco has created a new trade in a cheaper article, and 'the result has been an increase of exportation to the United States of 16,000,000 cigars.' In the Philippines we have aleady, to begin with, an export tax upon hemp.

More significant still is the fact that the Republic already has a preferential treaty in operation with at least one independent South American nation—Brazil. The coffee-trade of that country being dependent upon the United States, it has no effective choice in the matter. The Brazilian Government granted last year a special tariff reduction of 20 per cent, on certain articles imported from the United States. To extend reciprocal relations upon this model is the evident effort of American commercial policy. With what results can only be shown in the future. But it is certain that the commercial struggle with the United States in South America, which is now in its day of small things, is about to develop in earnest. Indeed, our trade with this group of markets—with the exception of Argentina—seems already to have reached a period of stagnation, if not of decline (1895-1899 average, minus coal, £15,200,000; 1900-1904 average, minus coal, £15,100,000).

Argentina: the Relation of Trade to Power.—In this survey Argentina, as we have said, stands apart. It is a developing country. Our recent commercial relations with her have been of a very encouraging character, and her present economic connection with us is next to that of a British self-governing colony—exception being made of the fact that German trade to Buenos Ayres is increasing faster than our own. The United States, which taxes raw wool as well as wheat, is perhaps more embarrassed in its dealings with the Argentine than with any other country, and American trade accordingly exhibits but feeble progress. Our own dealings with Argentina during the last quinquennium may usefully be shown as follows: