pire, saying: "So also a British subject, in whatever land he may be, shall feel confident that the watchful eye and strong arm of England will protect him against injustice and wrong.' "These are pregnant but dangerous words.

On such lineage was the defence of "dollar diplomacy "made by President Taft in his speech in behalf of policies proposed by his Secretary of State, Mr. Knox. He said that to substitute "dollars for bullets" was "an effort frankly directed to the increase of American trade upon the axiomatic principle that the Government of the United States shall extend all proper support to every legitimate and beneficial American enterprise abroad." Such reasoning might well have led to the use of bullets as the final argument for dollars. This language would not be used by the Department of State today. It is in accord with the principles which are acknowledged, but the administration and interpretation are different. President Roosevelt, on the contrary, had already stated the true American position when he said: "Except for arbitrary wrong done or sanctioned by superior authority to persons or to vested property rights, the United States Government, following its traditional usage in such cases, aims to go no further than the mere use of its good offices." To such ideas the Department of State today holds faith, refusing to be drawn into the entanglements of a merely selfish commercial and trade policy. The question as to "who owns the earth" is as yet unanswered, but as Secretary Hughes recently said: "International relations proceed upon the postulate of international morality." The Economics of Diplomacy, and the study of such international relations, as President Wilson once declared, are not "mere questions of policy and diplomacy, they are shot through with the principles of life." Such affairs are problems of high morality and of national character. And be it remembered that a nation's as well as a man's character is not a mere matter of report. It is a matter of fact.

So first of all we must turn to note the homely, practical ways in which in legitimate fashion the Foreign Service of the United States is concerned with the promotion of trade. Here I prefer to take concrete illustrations of the way in which American Consuls are aiding the development of business. This they do by

their reports on economic, commercial and trade conditions. Their replies to letters written from America open up new channels for enterprise and investment. Opportunities for special sales and purchases are noted and in case of trade disputes the Consul is always ready to seek equitable adjustment and settlement. He tries by his contributions to the World Trade Directory, which is established in the Department of Commerce, to give not the "credit rating" of firms in the given country where he is stationed, but a real "sales picture" of the country for the benefit of American business men. Lastly, the greeting and guidance which he gives to American representatives who are travelling on commercial errands is of special value. Such work is part and parcel of his office.

Thus within the past year out of a long list of exceptional services, I select at random only a few instances of the promotion of American trade interests by members of the American Foreign Service. For example, the Consul at Alexandria has stimulated orders for artificial leather and procured allotment of one-half of the annual Egyptian cotton crop for shipment on American vessels. Previously the entire crop had been shipped in British bottoms. The sale of American machinery and of tools has been promoted by the Consuls at such widely separated posts as Jerusalem, Harbin, Cairo, Durban, Georgetown in British Guiana, Adelaide in Australia, Hankow in China, Cape Town in South Africa and Venice in Italy. Annoying trade disputes were settled at the intervention of the American Consuls at Rotterdam, Havana, Pernambuco and Mukden. The automobile trade is indebted to the good offices of the Consuls at Nagoya in Japan, Riga, Hankow, Montevideo, Coblenz and Copenhagen. American lumber is in demand at Algiers, Ghent, Melbourne, St. Gall in Switzerland, Las Palmas, Montevideo and San José in Costa Rica. Our agricultural products have also found special markets in Rotterdam, Vienna, Bergen, Boulogne and Antwerp. All of these opportunities have come through the vigilance of our Consuls in their various observation posts.

This sort of trade development is the real basis for the promotion of international friendship. It is one of the humble yet most important phases of the Economics of Diplomacy. The

day has gone when the American Consul can be considered a joke. He is now the pilot for trade.

The adoption and maintenance of the Open Door is another illustration of the same subject. In July, 1921, Secretary Hughes wrote to the Chinese Minister at Washington assuring him of the wholehearted support of the United States for that principle "which it has traditionally regarded as fundamental both to the interests of China itself and to the common interests of all powers in China, and indispensable to the free and peaceful development of their commerce on the Pacific Ocean." Accordingly the Open Door was adopted as a leading principle in the treaty relating to China signed at Washington in February, 1922. This not only declared against any special superiority of rights by any single nation in China, but denied any monopoly or preference which would "frustrate the practical application of the principle of equal opportunity." Thus as Mr. (Lord) Balfour stated, the sphere of influence "had not only gone but had gone forever and was now explicitly condemned." Such clear and definite provisions ended a period during which the Open Door had been a polite fiction. They also cleared the way for the assertion of the same principle regarding mandated territory.

At the Council of Algeciras in 1906, when France and Spain had received a special mandate for portions of Morocco, the same idea of equal opportunity for the commerce of all nations was asserted under the leadership of the United States. After the World War, the same principle was also followed with respect to Tangier and in other African territories. More particularly, as regards the Near East, the Department of State early made clear the American policy regarding territories which had once belonged to Turkey. A note of March, 1920, stated to the Allies that it was the view of the United States that "such changes or arrangements [as might take place] will in no way place American citizens or corporations or citizens or corporations of any other country in a less favorable situation than citizens or corporations of any Power party to this treaty."

So much has already been said and written on the Open Door and it is such a familiar doctrine to us that I pass now to a more intricate problem-that of commercial treaties with their rela

tionship to the mercantile navy and to railway and shipping rates. Dr. Arthur Young, Economic Adviser in the Department of State, has recently declared that "the present commercial treaties of the United States are mostly obsolete." This is partially due to the fact that these older treaties were based on conditional interpretation of the most-favored-nation clause. Today, however, under the Tariff Act of 1922 the unconditional most-favored-nation clause is involved in the administration of the law. The recently appointed United States Minister to Rumania, Mr. W. S. Culbertson, formerly of the United States Tariff Commission, has just written an admirable book on International Economic Policies in which he discusses the various aspects of our policy respecting commercial treaties. He thus defines the difference between national and most-favored-nation and "conditional" and "unconditional" treatment:

National treatment guarantees equality of treatment between an alien on the one side and a national on the other. That is, with respect to the matter in question-let us say that it is the right of ships to enter our ports—the alien would pay no other or higher duty than would be paid by an American citizen. In the case of most-favored-nation treatment, a third nation is involved, and most-favored-nation treatment is the absence of discrimination between the citizens of two alien states. The conditional form of [treatment] recognizes and records a distinction between concessions gratuitously made and concessions made in return for an equivalent, whereas the unconditional form names no conditions or circumstances limiting the immediate and automatic extensions of any concession. The unconditional most-favored-nation principle may be adopted as advantageously by a country with a protective tariff as by a country with free trade. Like the analogous policy, the "Open Door," it does not imply the absence of tariffs but the absence of discriminations in whatever tariffs or other commercial measures a nation may see fit to adopt.

If we examine the situation as to shipping, we find that discriminations as to import duties, internal taxes, transit duties, charges in respect to warehousing, bounties, tonnage dues and port charges are all possible unless we secure agreement for equal treatment. As a means of creating a competitive situation favorable to American as compared with foreign vessels, it has been advocated that the United States impose higher dues and charges on foreign vessels or their cargo entering American ports than apply on American vessels. Such a step might be followed

by counter-discriminations by foreign countries. Further, such counter-discriminations might not be confined to American shipping but might be directed against American commerce as well. As Mr. Hughes recently said in the course of an address before the Chamber of Commerce of the State of New York:

It might be well enough to sharpen our knives against those who discriminate against our shipping, but this would be merely to force an agreement for equal treatment for our own ships. When another Government is willing to agree with us to give reciprocally equal national treatment for vessels in foreign trade, we should be willing to make a like agreement. The policy of discrimination in such matters in order to force an agreement attains its end when agreement for equal treatment is reached. But a policy of discrimination for its own sake, with knives out all over the world, of unending strife to see who can make the most by discriminatory charges and retaliations, would be, as it seems to me, a fatuous policy for us and destructive of the interests of American trade.

It is one of the fallacies of those who oppose such clauses as have been inserted in the German treaty that discrimination in favor of our own shipping would have to be met by the same sort of discriminations that we might impose. Manifestly, there could be resort to any practicable kind of retaliation, and nothing that we could do would be more hostile to the general interests of peace, for these interests do not prosper in economic wars. We should aim at the removal of all unjust discriminations against our commerce and seek to make commercial treaties on that basis, with the readiness to promise for ourselves what we would ask of others.

Similar considerations were probably in the mind of Admiral Palmer, President of the Emergency Fleet Corporation, who, in a recent address before the annual meeting of the United States Chamber of Commerce, said: "Government aid based on the principle of flag discrimination on international routes inevitably invites and brings retaliation. The immediate effect may be advantageous, but the result in the long run is likely to be bad."

The force of Admiral Palmer's statement is revealed by the fact that the value of our exports to the important maritime nations which might be diverted by retaliatory measures to foreign vessels are very much greater than the total volume of our imports which could readily be diverted to American vessels by our own discriminating duties. The victory of those who believed that, in respect to the Panama Canal tolls on shipping, the United States was not entitled to discriminate in favor of its own vessels, had