The Washington times., 1915-05-27
THE 5 PER CENT DECISION


The following provision, theoreti-
cally intended, of course, to encour-
age the American merchant marine,
was written into the Underwood tar
if act, and is now the law:
j. Subsection :. That discount Of
per centum on all duties imposed by this
act shall be allowed on such goods,
ported in vessels admitted to registra-
ton under the laws OF the United
states: Provided, that nothing in this
subsection shall be so construed as to
affect the provisions of any treaty con-
cluded between the United States and
any foreign nation.
What does this section mean?
That when goods are imported in
American bottoms they shall pay 5
per cent less than if they came in
foreign bottoms.
1t means that, if the proviso be
left off; but without the proviso it
probably could not be enforced, for
the Constitution and treaties are the
supreme law of the land and may
not be set aside by act of Congress.
Our commercial treaties with almost
all maritime countries guarantee, on
both sides, reciprocal treatment of
shipping; neither country shall dis
criminate against the shipping of
the other; each shall give to the
other the full measure of consider
alton that is given to the "most IA
vored nation" Thus if a single
country has treaty that made i'm
possible, against its shipping, the
application of this 5 per cent dis
elimination, every other country
whose treaty with us contained a
"most favored nation" clause ap-
plicable to shipping and customs,
would get the same advantage; and
law of Congress could not change
the situation.
In short, it may be said that the
section without the proviso would
have been unenforcable because it
would have been an attempt to re-
peal treaties. With the proviso, it
compels the grant of the per cent
rebate to all shipping, that comes
under the favored-nation provisions.
The effect of making this appli-
cation is that in order to grant the
per cent rebate to not over fifty
American ships engaged in the for
eign trade, we grant it also to about
$500 foreign owned ships which
must get the benefit of the favored
nation treatment. The net result is
to nullify the benefit that was in
tended to be given to American
shipping, to lop off per cent from
the sadly needed customs revenue
of the country, and to reduce by
that proportion the protection OF
American industries, already sup.
posed to have been cut by the Un-
derwood measure to the minimum
which even an anti-protection party
dared fix.
The court of customs appeals has
had this question before it since
soon after the Underwood act be,
came law: did the 5 per cent rebate
have to be given to all the treat,
countries? 1t decides that the re-
bate must be so given. This will
cut off at least $1O,0OO,OOO of oul
annual revenues, and increase tt
that extent a deficit that was al
ready startling.
Some wonderment will be enter
tanned as to whether the makers O.
the new tariff act knew that thi
would have to be the end of the mat
ter. They were warned repeatedly
in the discussions, that this woul,
be the effect. 1t is difficult to un
derstand how they could have doubt
ed it, unless they were utterly ig
norant of the facts and effects in
volved in our commercial treaties
They were not permitted to be thu
} ignorant after the matter was de
bated, for in the Senate especiall
these considerations were impresse
with all earnestness.
Yet the authors and political back
ers of the legislation persisted.
will not be an unfair aspersion, no