322 THE QUESTIONS OF THE DAY. 



clamoring for a repeal of the bounty. This, however, is not 

 an easy matter. If one nation discontinues the bounty, it at 

 once loses all its foreign trade, which will be seized by those 

 nations which continue to pay it. If one or all discontinue it, 

 millions of capital which have been invested, on the faith of 

 the continuance of the bounties, in factories, wnll be lost, and 

 the owners will be bankrupt. There is a strong pressure to 

 avoid this calamity, and yet it is seen that the present situation 

 can not continue. 



All this had been long foreseen by the different govern- 

 ments, which at the same time could see no escape from their 

 dilemma, when the crisis was intensified by the passage of 

 the United States Tariff Act of 1896, the United States and 

 Great Britain being the largest sugar-importing countri.es. 

 In the United States, however, the gulf states have for a long 

 time bee!i producers of cane sugar, although, as has been stated, 

 at a disadvantage as compared wuth tropical countries, and 

 since 1890 there has been an increasing disposition to produce 

 beet sugar. This country can easily produce all the sugar 

 consumed in the world, the reason why it has not done 

 so, since beet-sugar factories became established, being mainly 

 the high price of labor. But on the passage of the Tariff 

 Act of 1896, the domestic sugar producers demanded that 

 they should not be compelled to compete in their home market 

 with foreign sugar, a portion of whose cost was borne by gen- 

 eral taxation of the country which produced it, with the result 

 that there was incorporated in the law a provision that in 

 addition to the import duty collected on all sugar, there should 

 be levied, on all sugar coming from a bounty-paying country, 

 an additional duty — called a "countervailing duty" — precisely 

 equal to the bounty paid. This at once deprived the producers 

 of those countries of all benefit of the bounty so far as the 

 market of this country is concerned. This led to much ill 

 feeling, especially on the part of Germany, which was at first 

 inclined to consider it a violation of treaty rights inviting 

 retaliation. 



In the meantime the sugar producers of the British West 

 Indian colonies were being reduced to despair by the compe- 



