In the fifteenth article of the treaty of commerce and navigation the British government had reserved the right of countervailing these discriminating duties, and the United States had bound themselves not to impose any new or additional duty on the tonnage of British ships or vessels, or to increase the then subsisting difference between the duties payable on the importation of any article in British American ships; so that when Congress imposed increased duties, the English Parliament exercised the reserved right stipulated in the treaty, and thus by the Act of Geo. III., c. 97, countervailing duties were imposed, payable on the importation of American goods in American vessels, in addition to the duties payable on their importation in British ships.[317] Additional duties were also imposed upon certain specified articles, and three per cent. ad valorem upon enumerated articles.
Effect of legislative measures on both sides.
Such, then, was the legislation on both sides, as it most materially affected merchant shipping. The American shipowners and merchants looked upon every proceeding on the part of the British Legislature as levelled especially against themselves; and, jealous of everything which militated against their own interest, they contended that the Parliament of Great Britain had exceeded the fair intent and meaning of the treaty of 1794, and had secured for the British shipowners the exclusive carriage to Great Britain, in time of peace, of some of the most important objects of American exportation. They pointed out that the English had selected fish, oil, and tobacco, articles of great bulk, as objects on which the highest countervailing duties had been imposed. They alleged that in consequence of this countervailing duty upon oil, a British ship of two hundred and fifty tons register, carrying two hundred and fifty tuns of oil to great Britain from the United States, would pay 453l. 15s. sterling less duty thereon than the same oil would pay if imported into Great Britain in an American ship. By a similar operation, a British ship of two hundred and fifty tons, carrying four hundred hogsheads of tobacco, of one thousand two hundred pounds each, to Great Britain from the United States, would pay 360l. sterling less duty than would be payable on the same quantity of tobacco imported in an American ship; the whole freight, at 35s. sterling per hogshead, would only amount to 700l. sterling, which, after deducting the countervailing duty of 360l., would leave to the American a net freight of only 344l. 1s. sterling.
It was further pointed out that rice, when imported into Great Britain in an American ship, was charged with a duty of 8d. per hundredweight more than when imported in a British ship; and that an extra duty amounting on a tierce of rice to 3s. 9d. sterling, the freight of a tierce of rice being then about 12s. sterling, was also demanded. It was said that no person would give 15s. 9d. freight in an American when he could have the same carried for 12s. in a British ship. Pot and pearl ashes were made to pay a countervailing duty of 9d. per barrel; and as the freight of such a barrel was presumed to be 5s. to 5s. 6d. sterling in times of peace, a difference of 9d. sterling would effectually give the carrying trade to British ships of all the ashes exported from the United States to Great Britain.
Conclusions drawn by the American shipowners.
From such arguments as these the shipowners of the United States drew the conclusion that Great Britain, by her countervailing Act, secured effectually the carrying, for her own wants and foreign commerce, of the American fish-oil, tobacco, pot and pearl ashes, rice, indigo, and cotton; and, having obtained the carriage of these bulky articles, all minor objects, except naval stores, not being sufficiently important to form entire cargoes, would also, of necessity, be carried in British ships. The small export duty imposed by the British Parliament, of one-half per cent. on all goods, wares, and merchandise of the growth or manufacture of Great Britain on their exportation to any port in Europe within the Straits of Gibraltar, and of one per cent. on similar goods when exported to any place not being in Europe or within the Straits of Gibraltar, subjected the United States to a duty on exports double that which was paid by the nations of Europe. Of course this extra duty, small as it was, but utterly wrong in principle, served to make a new grievance, and the Americans contended that this discriminating, or, more properly, this differential, duty was in contradiction to the spirit of the treaties which subsisted between the United States and Great Britain.
Two modes were proposed to the American Legislature to obviate the disadvantages resulting to the carrying trade of the United States from these countervailing and differential duties. The one was, to increase the American discriminating[318] (differential?) duties, so as to counteract the injury they experienced from the operation of the countervailing duties of other nations. The other was, to relinquish the American duties (so far as they related to goods, wares, and merchandise, the growth, produce, or manufacture of the nations to which the ship in which these were imported belonged) in favour of such foreign nations as would agree to abolish such of their discriminating duties as were in their operation injurious to the interests of the United States.
Alarm in the United States at the idea of reciprocity.
The mere intimation of a design to inaugurate something like a policy of reciprocity, if not of entirely free-trade, struck alarm into the minds of the shipowners and shipbuilders of the United States. They held meetings, in which their patriotic feelings of indignation, as seems to have been the case in other countries as well, were singularly intermingled with a keen sense of self-interest, not perhaps very wisely directed. But, carried away by popular clamour, engendered but too often by parties who had only a very limited view of their own and of the national interests, the great mercantile bodies of New York, Boston, and Philadelphia strenuously opposed any remission of the American differential tonnage duties. They insisted that, taking anterior years as a guide, the loss to the revenue would not be less than $450,000 per annum. They viewed the project with alarm, believing that if carried out it must essentially injure the commerce of the United States; as its immediate effect, by opening the market for freight to the lowest bidder, would be to shift the carrying trade from the hands of their own merchants to those of foreigners. In this way the American shipowners argued that foreigners would build cheaper, equip cheaper, and sail their vessels at less cost than they could, at the same time intimating that Europeans were generally satisfied with a less profit than the American merchant could afford to receive.
Objections to the British Navigation Act.