COMMERCIA L Capitulations signify that which is arranged under distinct headings; the Turkish phrase is “ahid nameh,” whereas a treaty is “ mouahede ”—the latter does, and the former does not, signify a reciprocal engagement. Thus, although the Turkish capitulations are not in themselves treaties, yet by subsequent confirmation they have acquired the force of commercial treaties, of perpetual duration as regards substance and principles, while details, such as rates of customs duties, may, by mutual consent, be varied from time to time. The most favoured nation article already referred to concedes to the State in the treaty with which it is concluded whatever advantages in the matters comprised within its stipulations have been allowed to any foreign or third State. It does not in itself directly confer any particular rights, but sums up the whole of the rights in the matters therein mentioned which have been or may be granted to foreign countries. The value of the privileges under this article accordingly varies with the conditions as to these rights in each State which concedes this treatment. The article is drafted in different form: (1) That contracting States A. and B. agree to extend to each other whatever rights and privileges they concede to countries C. and D., or to C. and D. and any other country. The object in this instance is to ensure specifically to B. and A. whatever advantages C. and D. may possess.' A recent instance is Article XI. of the treaty of May 10, 1871, between France and Germany, which binds them respectively to extend to each other whatever advantages they grant to Austria, Belgium, Great Britain, the Netherlands, Russia, and Switzerland. (2) The present general formula: A. and B. agree to extend to each other whatever advantages they concede to any third country ; and engage that no other or higher duties shall be levied on the importation into A. and B. respectively of goods the produce or manufacture of B. and A. than are levied on the like goods the produce or manufacture of any third country the most favoured in this respect. There is a similar clause in regard to exportation. (3) The conditional or reciprocity formula, often used in the 18th and in the early part of the 19th century, namely, that whenever A. and B. make special concessions in return for corresponding concessions, B. and A. respectively are either excluded from participation therein, or must make some additional equivalent concession in order to participate in those advantages. It may further be observed that the word “ like ” relates to the goods themselves, to their material or quality, not to conditions of manufacture, mode of conveyance, or anything beyond the fact of their precise description ; small local facilities allowed to traffic between conterminous land districts are not at variance with this article. Colonies.—Tbe application of commercial treaties to colonies depends upon the wording of each treaty. The earlier colonial policy of European States was to subordinate colonial interests to those of the mother country, to reserve colonial trade for the mother country, and to abstain from engagements contrary to these general rules. France, Portugal, and Spain have adhered in principle to this policy. Germany and Holland have been more liberal. The self - government enjoyed by the larger British colonies has led since 1886 to the insertion of an article in British commercial and other treaties whereby the assent of each of these colonies, and likewise of India, is reserved before they apply to each of these possessions. And further, the fact that certain other British colonies are now within the sphere of commercial intercourse controlled by the United States, has since 1891 induced the British Government to enter into special agreements on behalf of colonies for whose products the United States is now the chief market. As regards the most favoured nation article, it is to be remembered that the mother country and colonies are not foreign countries with respect to each other. The most favoured nation article, therefore, does not preclude special arrangements between the mother country and colonies, nor between colonies.
TREATIES
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Termination. — Commercial treaties are usually concluded for a term of years, and either lapse at the end of this period, or are terminable then, or subsequently, if either State gives the required notice. When a portion of a country establishes its independence, for example the several American Republics, according to present usage foreign trade is placed on a uniform most favoured nation footing, and fresh treaties are entered into to regulate the commercial relations of the new communities. In the case of former Turkish provinces, the capitulations remain in force in principle until they are replaced by new engagements. If one State is absorbed into another, for instance Texas into the United States, or when territory passes by conquest, for instance Alsace to Germany, the commercial treaties of the new supreme Government take effect. In administered territories, Bosnia and Cyprus for instance, and in protected territories, it depends on the policy of the administering power how far the previous fiscal system shall remain in force. When the separate Italian States were united into the Kingdom of Italy in 1861, the commercial engagements of Sardinia superseded those of the other States, but fresh treaties were concluded by the new kingdom to place international relations on a regular footing. When the German Empire was established under the king of Prussia in 1871, the commercial engagements of any State which were at variance with a Zollverein treaty were superseded by that treaty. Tbe present scope of commercial treaties is well expressed by Monsieur Calvo in his work on International Law. They provide for the importation, exportation, transit, transhipment, and bonding of merchandise; customs tariffs; navigation charges; quarantine; the admission of vessels to roadsteads, ports, and docks ; coasting trade ; the admission of consuls and their rights ; fisheries ; they determine the local position of the subjects of each State in the other country in regard to residence, property, payment of taxes or exemptions, and military service; nationality; and a most favoured nation clause. They usually contain a termination, and sometimes a colonial Article. Some of the matters enumerated by Monsieur Calvo—consular privileges, fisheries, and nationality—are now dealt with by separate conventions. Contraband and neutral trade are not included as frequently as they were in the 18th century. The preceding statement shows that commercial treaties afford to foreigners, personally, legal rights, and relief from technical disabilities: they afford security to trade and navigation, and regulate other matters comprised in their provisions. In Europe the general principles established by the series of treaties 1860-66 hold good, namely, the substitution of uniform rates of customs duties for prohibitions or differential rates. The disadvantages urged are that these treaties involve Government interference and bargaining, whereas each State should act independently as its interests require, that they are opposed to free trade, and restrict the fiscal freedom of the legislature. It may be observed that these objections imply some confusion of ideas. All contracts may be designated bargains, and some of the details of commercial treaties in Monsieur Calvo’s enumeration enter directly into the functions of government; moreover, countries cannot remain isolated. Tariff arrangements are, however, open to controversy. Without discussing the Methuen Treaty (notice was given by the Portuguese Government in 1835 that it should be no longer operative), it may be admitted that its policy would not now be adopted. If, however, two countries agree by simultaneous action to adopt fixed rates of duty, this agreement is favourable to commerce, and it is not apparent how it is contrary to free trade principles. If the Legislature is restricted from imposing prohibitions or differential duties, this restriction is not injurious ; and when maximum rates of duty are settled, this restriction cannot do harm if its duration is for a limited period ; security in business transactions is provided by such tariff arrangements. Our conclusions are— (1) that under the varying jurisprudence of nations commercial treaties are adopted by common consent; (2) that their provisions depend upon the general and fiscal policy of each State ; (3) that tariff arrangements, if judiciously settled, benefit trade ; (4) that prohibitions, and discriminating or differential duties, are injurious to trade ; and to international relations ; (5) that the most favoured nation clause leads to equality of
