Mr. Winchester to Mr. Bayard.
Berne, October 10, 1887. (Received October 22.)
Sir: The Swiss Federal Council and the diplomatic corps attended a banquet given by the directors of the Swiss national agricultural exposition, in progress at Neuchatel. The remarks of the President of the Confederation attracted much attention, being devoted to a question at the time receiving anxious consideration in Switzerland. The delusion of protective ideas, as furnishing any remedy for the depressed condition of agricultural interests, formed the text of his speech. He said:
The political existence of Switzerland is at present not threatened or endangered from any quarter, but it is different with her economical existence, which makes us more solicitous from day to day through the increase of unjust burdens imposed at all our neighboring frontiers. The first to feel this condition were our manufacturers, who demanded a tariff of retaliation, and now the farmers complain that they are suffering from a denial of the same protection. Indeed, we are to-day the witnesses of an eager race in the parliaments of many countries to raise the duty on importations from their neighboring states until the wall is so high that nothing can pass. Is this to be the grand coronation of the labor and civilization of the nineteenth century—the century of steam, electricity, the piercing of the St. Gothard, the Suez and Panama Canals? No; such a condition can not endure. The commerce of the world is under a tension which the tariff system can not forever subject it to, and protection must become hateful as it tends to make dearer the necessities of the people. Let me express the hope that the time will come, if soon I do not venture to say, when from the excess of the evil good will result; that the people and government will recognize that the fictitious advance created by protective duties leads to general poverty, whilst the liberty of exchange is the surest foundation of general prosperity.
The sentiments of the President, the above brief extract being given to show their tone, seem to meet with a very general and hearty appreciation. There were several other speeches made in the same line, and no one uttered a word, as far as I heard, except in perfect harmony with it. Some of the speakers with great force pointed to France, where, in deference to the demands of the agricultural party, the duty upon cereals, meats, and cattle was largely advanced in 1881–’85, and that these duties, from which the agricultural interest expected so much, had failed to produce the anticipated effect, resulting in no good to producers or consumers, and that the farms are going from bad to worse; that the experience of France in its protection to farmers shows that—
- First. The increase of protective duties on agricultural produce causes not only a decrease in the import but a decrease in the export as well.
- Second. The increase is not of the smallest benefit to the farmer or to the consumer, but on the contrary the price of agricultural produce of all sorts is as low if not lower than before the duty was imposed.
- Third. That those engaged in industries which are affected, and workmen, the price of whose bread and meat is increased, are uniting to resist the demands of the peasant electorate.
- Fourth. That protection is an agricultural remedy is out of the question.
The report of the Stuttgart chamber of commerce, recently made, was quoted in extenso, and special emphasis given to that portion where it says:
The result of the extensive development of the protective system has been to doubly increase the international uncertainty which now burdens trade and commerce. Every movement in favor of protective duties results in efforts on the part of other countries interested in the matter to outbid their neighbors, and that the very duty which is by way of protecting a nation, produces a reaction on home prices, and causes them to become assimilated to those of international commerce.
The entire unanimity that prevailed in all the remarks touching this question was very surprising, for it has been understood there was a considerable party in Switzerland clamoring for a trial of the experiment of protection as a relief to the agricultural depression and continued complaint from the peasants. Swiss exports have for several years been constantly decreasing on account of the cordon of high customs duties surrounding them on all sides. Being an inland country, without ships or sea ports, she has no advantages for direct exportation or importation, and sells and buys most naturally of her immediate neighbors. So her commerce in and out is largely affected through the four conterminous countries, viz, France, Italy, Germany, and Austria. Her exports outside of these, being silk goods, embroideries, and watches, which constitute four-fifths of it, may be classed in a general sense as luxuries, and, in seeking a foreign market, encounter the highest duty, whilst her importations are cotton, machinery, cereals, food-supply, and raw materials for her manufacturers that will not admit of a heavy duty on her part. Yet her revenue is mainly derived from customs, and posts and telegraphs, the receipts from the former being 21,220,000 francs, and the latter 23,215,200 francs for 1887 (estimated), making 44,435,200 out of an aggregate revenue of 52,527,000 francs estimated for the fiscal year.
The cereal crop of last year was much above the ordinary yield, but it left a deficiency for home consumption requiring an importation of an amount more than double in value to the amount produced.
The tariff received a general revision in 1884, and was made slightly more protective, the advance in duty being chiefly in the interest of the manufacturers of silk and other articles by a reduction of the duty on raw material required by them, and by a small increase of those affecting manufactured goods, as was fully set forth by a report of Consul Gifford at Basle, transmitting a translation of the new tariff, with schedule of the changes made. Last winter a bill passed the National Council (the lower house of the Federal Assembly) making a still further increase very much in the line of the tariff of 1884, and it awaits the action of the State Council at the coming session in December. But a very serious difficulty stands in the way of any practical results from tariff legislation in Switzerland at this time, from special commercial treaties in existence with her neighbors and the ones with France and Italy extending to 1892. The treaty with Germany expired in the summer of 1886, and as yet has not been renewed from the unwillingness of the [Page 1499] German Government to concede the more favorable terms for the entry of her products demanded by Switzerland, and the opposition is very great to the renewal in its present form. Some are urging a tariff war with Germany in event of a failure to secure a conventional tariff on a fair basis, but the more intelligent opinion regards any such threat as foolish and suicidal. There appears to be gradually dawning on the masses of the people in the high-tariff countries of Europe, who are the main sufferers from this economic condition, the fact that the stubborn and mysterious depression of industries and the constant uncertainty of prices are in a great measure due to the insatiable disposition of those who have tasted of the fascinating drug of protective tariff, if they can, to take a stronger one of the same opiate, like the daughters of the horse-leech ever crying, “Give, give.” The rapid blocking of the provisions of the most-favored-nation clauses will some day imperatively require a mutual rapprochement on the questions of customs policy. These clauses are daily losing their meaning and importance, because every country denounces the conventional tariff system and enlarges and accentuates the provisions of its own national tariff.
I am, etc.,