The Sun.
London, England, 1847-12-30 00:00:00

CL. 18.

The states of the union propose for the protection►
of the interests of the union, and at their joint charge,
to nominate consuls in foreign ports.

CL. 19.

In respect to the measures to be adopted by the
states of the union, regarding neutrality, quarantine
regulations, protection in cases of vessels stranded,
&c., the laws to he observed thereby shall be reserved
for consideration.
Berlin, March 27, 1847.

THE SYSTEM OF DIFFERENTIAL DUTIES,
AS CONTAINED IN A PROJECT FOR THE INTRODUCTION OF
A GERMAN UNIoN FOR NAVIGATION AND TRADE, SUB-
MITTED TO THE CONSIDERATION OF SEVERAL OF THE
NORTH SEA STATES OF GERMANY.

The confused and antiquated system of prohibitory
import regulations adopted by England, at d
usually comprised under the " Navigation Laws,"
has, in the course of the present century,
been imitated by several other nations. These
nations hoped, by introducing similar laws,
to attain an equal degree of commercial power, or at
least, by adopting a system of retaliation, to put a
stop to England's usurpations. It was, however,
considered necessary in some measure to yield to the
growing knowledge of the subject which prevailed,
and which was decidedly opposed to all prohibitive
systems ; and differential duties were therefore sub-
stituted for prohibitions. The importation of the
inducts of certain countries; in foreign ships was
mot actually forbidden, but it was rendered difficult
and almost impossible
by the imposition of higher
auties. These navigation-laws of modern invention
have been introduced successively into France, the
Netherlands, Portugal,r and Belgium, without,
however, as yet having realised the end proposed ; for
these countries have
England
aned more favourable
terms for their ships in En
countries, nor is their shippinggor in other foreign
interest in a very
flouri‘hing condition. Yet notwithstandingt this, there
fodrailyheis in Germany a growing clardura
introduc-
tion of similar measures, increasinga.
desire that Germany also should have lie-rnvigation-
laws. The views expressed and developed,
the public journals and pamphlets of Germany, first in
afterwards in the debates of the Chambers and inatnhe
counsels A influential statesmen, could not fail to
exercise an influence over the Government authori-
ties, and the memorial of April, 1845, from the
Prussian Department of Trade, made public by
moans of the press, may be considered as compris-
ing those views of the subject which are most
likely to prevail when the matter comes to be taken
into ultimate consideration, Several projects, more
or less in accordance with these views, have since
then been debated, without being any nearer their
execution. The question has, however assumed a
more definite form by being embodied in the sketch
of a treaty, which, divided into p tragraphs, entitled,
" Proposals for the formation of a Union for German
Navigation and Trade" (Vorschluge fiir die Einrichtung
eines Deutschen Schufffahrts-und liandels-Vereins),

has been laid before the Governments of Hanover,

Oldenburgh, Bremen, and Hamburgh, for confiden-
tial preliminary discussion. As in the other state,
the :result of these discussions seems to have been

generally in favour of the project, it behoves us the
more clearly to develope and explain the prepon 'era-
ting reasons which in our case may lead to a different
result. We must enter into details—we must consider
our relations to every foreign country in particular;
nay, we must dwell upon the statistics of various articles
of commerce, even at the risk of rendering the
general survey of the question more difficult by the
minuteness of our inquiries. It will no longer suffice
simply to indicate the danger with which the destruc-
tion of commercial liberty threatens the sea port trade
of Germany ; least of all will this suffice, in opposition
to a projected treaty, which adopts the principle of
commercial freedom as its starting point, and as its goal.
The projected treaty proposes that the German
states shall not only mutually bestow equal rights
upon the shipping and the produce of their respective
states, but that they shall grant the same rights to
the ships and produce of foreign countries ; but with
this reservation, that should the foreign states not
adopt an equally liberal system, measures of retaliation
must or may be adopted against them in German
p3rts.
Now, as by the carrying out of the first and most
important principle here laid down, in point of fact
nothing would be altered in the actually existing re-
lations, the true nature of the proposed change must
be sought for in the additional reservation, the execu-
tion of which would be opposed to the system of com-
mercial freedom. Further, as it clearly follows from
the first proposition, in connexion with the said re-
servation, that when countries treating us unfavour-
ably shall desist from so doing, Germany shall like-
wise desist from her measures of retaliation against
them, it is evident that to establish commercial free-
dom as the basis of Germany's relations with foreign
countries is the ultimate object of the treaty. But as
long as this object is not attained the proposed system
will in its operation act, not in accordance with, but in
opposition to, commercial freedom.
Herein lies the danger—this is the main substance
of the question, to show the doubtful character of
which we have entered into the following explana-
tions. The louder and more unanimously public opi-
nion in a great part of Germany (if we are to con-
sider certain journals as its true organs) pronounces
itself in favour of measures such as those alluded to,
the greater claims has our report for a just degree
of attention and an impartial examination. For pre-
cisely in the one point most important to commerce
does the projected treaty coincide with the various
other schemes that have been propounded ; and this
point we shall also here designate by the sufficiently,
significative, though not quite correct title, " A Com-
mon Navigation Act for all Germany."
This title hardly requires explanation ; it means a
general system of laws and treaties relative to ;.he
footing on which ships and their cargoes shall be
placed in German ports, but only so far as relates to
their admission, or rather to the duties to be im-
posed. But this system is not to be copied from the
English; like that of France, Portugal, and Belgium,
it is to be a protective not a prohibitive system. But
already the observation forces itself upon us, that the
system is nevertheless one of commercial restriction ;
and in order to avoid all misunderstanding, we beg to
be allowed to preface our inquiry—which in its
tendency will be thoroughly practical—with a short
and seemingly more theoretical definition of the views
contained therein.
Commerce will open the safest channels for itself
when allowed its free choice; it will be most pros-
perous when left undisturbed to pursue its natural
course. To such freedom of trade a moderate duty
is by no means opposed, for without imposing any
restraint upon commerce, the latter seems merely to
lighten the burden of direct taxes for the tax-
payer. But a system which goes beyond this,
which, besides the financial object, has a view to the
interests of industry ; which not only aims at filling
the coffers of the State, but endeavours to direct
trade ; which forces the merchant to choose one
market instead of another ; which obliges the im-
porter to freight one ship in preference to another.
and induces the consumer to purchase -one class of
goods instead of another ;—such a system is one of
commercial restriction, and like all other coercion, it
weighs heavily upon those immediately concerned,
and acts prejudicially against the development of the
general interest ; those not so immediately con-
cerned, and who do not at first feel the pressure
of the burden, do not, however, escape it. In
general, a minority of the citizens of a state profit
by burdens imposed aeon the majority. The
smaller the comparative number of the former, the
greater and more evident will be the dispropor-
tion. To protect the small number of persons inte-
rested in maritime trade, the whole mass of consumers
must pay the higher duty as well as the higher price ;
to favour a small number of shipowners, merchants
must submit to pay higher freights ; for the advan-
tage of the comparatively small number of merchants
who obtain their goods direct from distant regions,
every one in the country must forego the cheaper
goods which lie might perhaps obtain in the nearest
European market. This is the nature of the system
in its most obvious features.
Hitherto the protective duties of the Zoliverein
were limited, with some few unimportant exceptions,
to imposing a heavy charge equally upon all
foreign manufactures, so as to secure native fabrics
against all competition in the German markets.
What the Governments in the interior, in their
wisdom, considered right to enact relative to this
subject, we will not here comment upon. The states
on the coast, however, which are more dependent
upon trade than upon manufactures, retained that
freedom in their relations with foreign countries
which is so necessary for their commerce. But it
the system is to be extended to navigation also, it
must assume a new form. In this case differential
duties must be added to high but equal duties.
Foreign productions must not only be taxed, because
they are foreign, but they must be differently taxed,
:according to the ships by which they are imported.
The consumer is henceforward not only to be re-
stricted in his choice between native and foreign
produce, but the merchant is to be equally restricted
in his choice of a place whence to procure his goods,
and of the means of importing them. The mon-
complicated the system becomes, the more burden-
some will be the restrictions. The differential
system will be manifested, partly in the charges on
vessels (double harbour dues, extra impositions on
particular flags), partly in the rate of duties (higher
import dutie-). The difference of duty is to be re-
gulated with reference to the flag under which the
goods are imported, the place from which they are
shipped, and the country in which they are produced.
The protection afforded by differential duties is
intended to operate in favour—first, in favour of
German shipping; secondly, of German trade; thirdly,
of German industry. These three points must be
separately dwelt upon in the sequel.
Further, the purpose of this protection is-
1. Directly an I immediately, though not tempo-
ra. ily, to render foreign competition more difficult as
regards foreign shipping, trade, and produce.
2. Indirectly, and, as the ultimate object proposed,
to compel other nations, from whose markets we have
hitherto been excluded, or into which we have been
admitted on disadvantageous conditions only, to allow
us the means of entering into fair competition with
their native industry.
It has been observed above, that this latter purpose
is, undoubtedly, in accordance with the principles of
free trade, but that the former is in direct opposition
to those principles. The one will, in consequence, be
obliged to yield to the other. In the same degree as
the fulfilment of the latter purpose is approached, the
efficacy of the measure, with regard to the former,
will be diminished, until at last, when the ultimate
object shall be attained, the former must be entirely
abandoned.
The memorial of the Prussian department of trade
above mentioned, as well as the projected treaty now
under consideration, represent the establishment of a
universal system of commercial freedom, with regard
to the intercourse between Germany and other coun-
tries as the chief aim and purport of this measure,
but notwithstanding this, the most numerous as well
as the most important reasons in favour of the com-
mon navigation act, adduced and explained in the said
memorial, as also in various pamphlets and public
journals, all relate to the state of affairs as it will
be previous to the attainment of the ultimate object;
all dwell upon the benefits which the shipping in-
terest, the trade, and the manufactures of Germany
are to derive from the system of differential customs
duties. We have, therefore, to take into consideration
two questions of different import. First, we must
consider what effect the new system will produce on
the several commercial interests of Germany, before
the attainment of the so oft-mentioned ultimate ob-
ject, and whether the advantages to be derived
from it are likely to outweigh the evils which it
may occasion. Secondly, we: must consider the
ultimate object by itself. The proposed investiga-
tions may thus properly be brought under two
heads. Whatever, then, remains to be said of the
new project can he comprised in a third division.
The whole must, however, be preceded by a prelimi-
nary survey of the maritime relations of Germany
with the most important commercial powers, as those
relations are established by laws and treaties, and as
they will in reality appear when the projected treaty
shall have been put into excution.

If the working of the new system is to be consi-
dered somewhat in detail, it is necessary that it should
be viewed as actually in operation, and that we should
picture to ourselves as clearly as possible, the results
as to the state of the customs which so complicated a
system of legislation would bring about. At the same
time, we must presume that the reservation contained
in the projected treaty, relative to the restrictions to
be imposed upon foreign ships and ports, under

certain conditions, has actually been enforced, where
there are no treaties in existence which c?uld pre-

vent it. In the projected treaty, (sec. 9) the expec-
tation is expressed, that foreign states will afford to
the ships of the countries which have conformed to
the treaty, the same privileges as are granted to their
ships in the German ports ; and further (sec. 10) that
the ships and produce of the countries belonging
to the union will not be placed on a more
unfavourable footing in foreign ports than those
of any other nation. Should any foreign state, how-
ever, not realise these expectations, the states of the
union reserve to themselves the power of placing the
ships and produce of such country under a disadvan-
tage, by the imposition of differential duties (sec. 13).
Similar disadvantages may be imposed upon any state
which, by particular privileges, monopolies, or other
sash measures, shall place obstacles in the way of the
shipping and commercial interests of the states be-
longing to the union (sec. 14). If other states should
treat the indirect imports of the ships of the union
j less favourably, a differential duty is reserved for the
ships of such states, as also for the imports of their
ports (sec. 12); and, finally, when foreign states treat
ships and produce belonging to one state of the union,
but coming from another, as coming from a third
I state (not belonging to the same country) (sec. 8),
then the imposition of double harbour dues and extra-
ordinary tonnage dues is reserved for the ships of such
foreign states (sec. 11).
Supposing these reservations to be actually en-
forced, and the existing customs and navigation laws
of the more important commercial countries to be
still in force, the system of customs in our German
ports would assume pretty nearly the following
aspect :
Great Britain, according to the general rule, ad-
mits German ships into her European ports only
when laden with German produce, or coming from
German ports ; and into her colonies only when laden
with German produce and coming from German ports
The exceptions to the first rule, namely, with regard
to such goods as were not included in the so-called
" enumerated articles," were according to the
former English tariff, of two little importance to
be taken into consideration as matters now
stand, they may, however, become of importance
for instance, with regard to flour, cattle; and refined
sugar. In accordance with the above-mentioned
reservation, we should thus have to impose higher
dues upon English vessels, as well as upon all produce,
not British, imported under the English flag, and all
pro iuce, not British, coming from British ports would
also be subjected to differential duties. As, inasmuch
as regards vessels and goods coming from the different
German states England does not consider these states
as belonging to one country (though of late
many favourable exceptions to this rule have
been admitted), we would also have to impose
double harbour dues and extraordinary ton-
nage duties upon English ships in our ports. But
as such an alteration in the shipping dues
would be contrary to the treaty concluded between
England and Prussia in 1824 (which treaty must not
be confounded with that of 1841, to terminate which
it is understood notice has already been given), as
also to existing treaties between England and
Hanover, Mecklenhurgh, Oldenburgh, and the Hanse
Towns, such treaties may at once be abrogated.
Here we immediately meet with a difficulty : the
British treaty with Hanover, concluded in 1844, is
binding until 1854, and the difficulty is increased by
the circumstance that this treaty contains a clause by
which the contracting parties mutually bind them-
selves not to grant to the subjects of any other state
any diminution of charges, or any advantages, privi-
leges, or immunities relative to navigation and trade
which shall not immediately be extended to the sub
jects of the other contracting party also (except when
the concessions shall be coupled with conditions stipu-
lating the granting of a fair compensation).
Although we do not mean to enter into long dis-
cussions and explanations of this clause, we are
obliged to admit that the kingdom of Hanover can-
not avoid placing English ships in future, i. e., until
1854, in every respect on an equal footing with
German ships. It will thus only be the indirect im-
ports of non-English goods from English ports, with-
out regard to the flag under which they are imported,
which will not come within this clause, and which
can consequently be subjected to the imposition of
different duties by Hanover. It is further clear that,
supposing the existence of a German navigation
union, the essential condition of which is to ensure
the uniform treatment of foreign flags by all the
states of the union, the most important German ma•
ritime power on the North Sea, cannot at the very
outset desire to act differently from the principles
followed by the other states with regard to the Eng-
lish flag, the most powerful of all ; it follows, there-
fore, that in this case that which is right by law in
Hanover, must also be considered so in the other
states of the union The whole of the retaliatory
measures against England, i. e., against that state
whose navigation laws gives the German shipowners
the most grounds for complaint, will thus be limited
to imposing an additional duty in German ports on
non-English products imported from England.
The Netherlands levy no higher tonnage duty on
ships belonging to German states which practise re-
ciprocity than they do upon their own, but all im-
ports under the national flag are favoured with a
deduction of duty, amounting on most goods to 10 per
cent., and on some to still more; but as all foreign
flags are, according to the general rule, treated alike,
this is a case for which the projected treaty (section
13) has reserved no retaliatory measures. In so far,
however, as according to the treaties which Holland
has entered into with Great Britain, France, North
America, Belgium, and Russia, ships belonging to
these countries, and trading direct between their own
country and the kingdom of the Netherlands, enjoy
this same advantage of a diminution of duty, which
German ships do not enjoy, and from which even
Russian ships will be excluded at the expiration of
the treaty of 1837 ; in so far there would be reason
to impose a differential duty in our ports upon
imports under the Dutch flag. As regards the Nether-
land colonies, all foreign ships trading with these
are subjected to the higher import and export duties
than are levied upon ships belonging to the mother
country, when trading direct with the colonies.
Though no reservation relative thereto has been made
in the projected treaty, this circumstance might justify
the union in placing Netheeland ships in German
parts under the disadvantage of differential duties, if
such justification were not rather to be sought for
(according to section 14) in the monopoly enjoyed by
the Handelsmaatschappy. For imposing higher duties
on non-Dutch products coining from Dutch ports
there seems to be no grounds, inasmuch as there is no
corresponding regulation in the Dutch laws; such
grounds could therefore only be sought for in the
preference given, in accordance with the above-men-
tioned treaties, to the vessels of those particular
countries, coming direct from their own p rts. The
preference given in Java to the productions of the
Netherlands would hardly (and according to section
13 of the projected treaty certainly not) justify the
imposing of a higher duty in German ports on the
produce of the Dutch colonies, as has, we understand,
been proposed by Bremen ; for the produce of Ger-
many is not there treated more favourably than any
other third country (Belgium partly excepted).
The customs laws of Belgium, which, with respect
to shipping dues and the refunding of the Scheldt
duty, place most German vessels on the same footing
as her own, make, on the other hand, with regard to
the duties on goods, a difference three or fourfold
in favour of the Belgian flag and of direct importation,
as also of importation from non-European ports, and
thus afford sufficient grounds for charging importa-
tions into Germany under the Belgian flag, and im-
portations of non-Belgian produce coming from Bel-
gium, with differential duties. As yet, however, the
treaties of Belgium with Hanover and with the
Zollverein form an obstacle to this proceeding. The
former treaty, which, if notice to determine it were
not given in February last, will be in force at least
until February, 1849, contains the above-cited clause
from the treaty between Great Britain and Hanover,
which secures the Belgian flag against being in future
placed under disadvantages with regard to the ships of
other nations ; and the latter treaty (between Belgium
and the Zollverein), which will be in force until 1851,
likewise contains this clause, in addition to two others,
which must also here be taken into consideration. The
first of these, which will remain in force until 1851,
secures to Belgian ships and their cargoes imported
from Belgium, "the same bounties, compensations,
duties, and other privileges of this kind," which may
be granted to the national ships. The second, notice
to terminate which may indeed be given in 1848,
places all Belgian vessels trading directly between
Belgium and the states of the Zollverein, and without
reference to the country of which their cargoes may
be the produce, on an equal footing with Prussian
vessels. Under the circumstances thus established by
treaties, it seems that at present it would not be
feasible to impose differential duties on Belgian ships
coming direct from Belgian ports, and it even seems
doubtful whether it could be effected on those trading
indirectly between the two countries. We should
probably be obliged to place Belgian ships on an
equal footing with our own, and only the non-Bel-
gian produce imported from Belgium would be sub•
jetted to ditferential duties.
France follows, with regard to her customs, the
same system as Belgium—that is to say, she makes
differences in the customs dues in favour of her own
flag ; and, besides this, she imposes on German vessels
a high tonnage duty from which French ships are
entirely, and the ships of some other countries partly,
exempted. With regard to France, therefore, all the
reserved differences as to shipping dues and customs
duties might at once be imposed, particularly as the
existing treaty between France and Mecklenburgh is
not in any essential point opposed to it.
The same may be said of Spain, where indeed the
difference in the shipping charges is very insignifi-
cant ; but where, on the other hand, the difference