to Mr. Evarts.
Vienna, January 29, 1879. (Received February 17.)
Sir: The serious commercial embarrassments which resulted from the suspension of treaty arrangements between Austria and France presented themselves very promptly to both governments. Contracts for future delivery made at the Paris Exhibition by Vienna houses, for example, would be rendered ruinous by the application of the old tariff of France, which would increase duties from 30 to 60 per cent. This tariff has long stood as a menace to force commercial treaties on French terms. The new tariff of Austria, on the other hand, allows an addition of only [Page 43] 10 per cent. to the duties on articles coming from countries having no treaty with this empire. This would be applied to various important imports from France. In both countries the commercial interests raised an outcry; and the two governments promptly concluded a treaty (which has just been ratified here) on the basis of the “most favored nation.”
This gives to Austria throughout the year 1879—at the end of which the French denunciation of the treaties takes effect—the benefit of the existing treaties between France on the one part, and England and Belgium on the other. It gives to France, on the other hand, the benefit of the arrangements just concluded between Austria and Italy for the same period of time.
From this, and from my previous reports, you will rightly conclude that for many years there has not been in Europe such a chaotic condition of public sentiment and action upon tariffs and commercial treaties as that now existing. Under such circumstances, it seems to me very desirable to create a commission in the United States, under the presidency of the Secretary of Treasury, and wholly outside of political affiliations, composed largely of known representatives of the producing, manufacturing, and trading interests, to consider the effect of these and other imminent changes upon American exports and commerce generally; and whether any of our interests suffer disadvantage in comparison with the like interests of other nations owing to any infirmity in our existing treaties. This inquiry ought, in fact, to be always pending under the conduct of our chambers of commerce so long as we have no government board of trade
But these chambers seem to have lost all initiative. The effect of the “most-favored-nation principle” often surprises the merchant who thinks himself uninterested in a commercial treaty between two foreign governments. For example, the new treaty between Austria and Italy is understood to secure on Austrian steel the same duty as on iron. This effects a reduction of some 9 francs per quintal on the Italian general tariff rates on steel, and this, it would seem, under our treaty with Italy, inures to the benefit also of American manufactures of steel.
I have, &c.,