F.—ECONOMIC SCIENCE AND STATISTICS 107 
duction in certain products the prices of which it is desired to stabilise 
without at the same time restricting an import trade which is tending to 
expand. But the uncertainties and the abuses inherent in all systems of 
quantitative control are exceptionally great in the administration of any 
quota scheme. Unless there is a return in practice to the early original 
purpose of quotas, and governments refrain from using them as special 
bargaining weapons, the prospects for increasing freedom in international 
trade are none too bright. 
In the treaty of 1860 between France and Great Britain there was 
embodied for the first time the principle of competitive equality in trade, 
or the assurance of equal opportunity to all friendly competitors, the 
principle generally referred to as the most-favoured-nation principle or 
clause. The example thus set was followed in the majority of trade 
agreements concluded since that date between the important commercial 
nations of the world. This led to a considerable extension of freedom of 
trade; but, occasionally, intensification of economic nationalist move- 
ments offered opposition to the simple working of the clause. It is not 
surprising, therefore, that since 1929 it has been overlooked or has been 
evaded by the institution of many new types of preferential trade arrange- 
ments. ‘To the question, shall the principle be maintained or re-estab- 
lished, or is it to disappear and be no longer embodied in future commercial 
treaties, a conclusive answer cannot now be given. Reasons, however, 
can be offered for the view that it will not be abandoned completely but 
that it is likely to be retained in a modified form to play a part again in 
the general liberalisation of trade. 
Even if some measure of quantitative regulation of international trade 
survives the depression it is improbable that important industrial countries 
will consent to abandon the rights they now possess in the way of assurance, 
which is given them by the most-favoured-nation clause, of equal oppor- 
tunities for their exporters to supply the imports required by other 
countries. If they did, their merchants would soon complain, with 
justice, of unfair and unequal conditions of competition. ‘That importance 
is still attached to the survival of the principle and that its complete 
abandonment, therefore, is unlikely appears from the report of the Com- 
mittee on Tariffs and Commercial Policy of the London Economic 
Conference of 1933. ‘This Committee suggested modifications that might 
make its application more elastic and better suited to the changed con- 
ditions of trade in 1933. ‘ There was a general opinion,’ the Committee 
reports, ‘ in favour of the maintenance of the most-favoured-nation clause 
in its unconditional and unrestricted form—naturally with the usually 
recognised exceptions—stressing the points that it represents the basis 
of all liberal commercial policy ; and that any general and substantial re- 
duction of tariffs by the method of bilateral treaties is only possible if the 
clause is unrestricted, and that this method would avoid the constant 
resumption of negotiations. 
* However, certain delegations manifested a strong tendency in favour 
of allowing new exceptions in addition to those hitherto unanimously 
admitted, on the ground that, although the unconditional and unrestricted 
most-favoured-nation clause does, under normal conditions, secure for 
