No. 22.
Mr. Kasson to Mr. Evarts.

No. 150.]

Sir: On several occasions during the past year I have had the honor to advise you of the rapidly increasing strength of the theory of protection, not only as indicated by the legislative movement in Austria, but by the tenor of negotiations for commercial treaties with nearly the whole of Europe. In summing up the results as they appear in the commercial relations of this empire at the beginning of the new year, I report them briefly as follows:

The new tariff contains not only a nominal increase of charges for the better protection of home manufactures and in other directions for increase of revenue, but also a horizontal advance of rates by about 20 per cent., effected by the change of the standard for duties from silver to gold. It went into operation with the first day of this year. The old [Page 41] special tariff treaties, having been duly denounced, expired with the last day of the old year, some of them after two or three short renewals, pending negotiations.

The most important of the international commercial relations of this empire were with its two immediate neighbors, Germany and Italy. With each of these governments the negotiations were prolonged and at times heated. The border commerce of each of them with Austria was mutually important, and demanded special consideration in the sense of free trade for the benefit of this local traffic, by rail and otherwise, which was unwilling to be cut off or interrupted by a mere boundary line. In the case, therefore, of these two countries, after frequent suspensions of the negotiations from despair of a satisfactory conclusion, the commissioners in December agreed upon a convention with Germany, to take effect January 1, and with Italy to take effect February 1, nominally upon the principle of the “most favored nation,” but really modified in important particulars into a treaty of reciprocity, or equivalent concessions. So sharp was the contest with Italy (toward whom Austria still appears to retain some feeling of offended superiority), that it was only on the last day of December that a provisorium for the single month of January, before the new treaty comes into force, could be settled and signed. The alarm was so great lest the whole border and coasting trade should be thrown into confusion for this month, that the imperial government obtained from the legislature, on short notice, authority to establish provisional arrangements by special executive decrees.

To France was offered a commercial treaty upon the “most-favored-nation” principle. After a period of rather earnest negotiation, the French Government resolutely declined the proposition, alleging the necessity of legislative authorization before entering upon such negotiations. Between Austro-Hungary and France, therefore, from the 1st of January the autonomic tariff of each country is in force upon imports from the other. Hitherto France, owing perhaps to the superior training and commercial intelligence of her negotiators, has usually had the best of international commercial bargaining with the rest of the world, and she is very reluctant to abandon her advantages.

With England continues in force the treaty of 1876, upon the “most-favored-nation” principle.

The Austro-Hugarian commercial relations with other countries in Europe, Asia, and Africa remain unchanged.

I have, &c.,