Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 4, 1883

No. 342.
Mr. Frelinghuysen to Mr. Daggett.

Department of State,
Washington, November 15, 1883.

No. 38.]

Sir: I inclose herewith a copy of a communication, dated the 10th instant, from Mr. Edward Lauterbach, the representative in New York of the Pacific Mail Steamship Company, and of the papers accompanying the same.

They present the following assertions:

For several years the Pacific Mail Steamship Company has employed four of its vessels between San Francisco and Australia, which on both outward and homeward trips have stopped at the Sandwich Islands. Their vessels on the China line have also made such stops, as have those of the Occidental and Oriental line of British steamers plying between San Francisco and China. In August last the Hawaiian Government granted to the Pacific Mail Steamship Company the privilege of carrying Chinese emigrant passengers to the Sandwich Islands from China, granting at the same time a like privilege to the Occidental and Oriental Steamship Company, which is organized under the laws of Great Britain, and making the privilege exclusive to these two companies.

In the letter of the minister of foreign affairs, conveying this grant, the assurance is expressly given to the Pacific Mail Steamship Company, that while the Government is not in a position to fix any definite time during which the arrangement shall last, no change will be made without reasonable warning to that company, unless some emergency, not then foreseen, should arise.

This privilege is regarded by the company as of great consequence, as it would probably enable them to continue, even through the dull season, the regular trips of their vessels bearing the United States mail.

But soon after this privilege was granted, Mr. C. Spreckles, of San Francisco, a large owner in the Oceanic Steam Navigation Company recently established between San Francisco and the Hawaiian Islands, informed the Pacific Mail Steamship Company that, unless the demand previously made through him that the calling of the company’s Australian steamers at Honolulu be discontinued, he would procure an abrogation of its privilege of landing Chinese passengers at that port.

The company, distrusting his ability to accomplish this object, declined the proposition, and received thereafter notice from the foreign minister, dated October 15 last, that his Government had entered into an engagement with the Oceanic Steamship Company, conferring on that company exclusive privilege to transport Chinese immigrants, and that, after January 1, 1884, permits would not be issued by Hawaiian consular officers in China or the United States for such purpose to vessels of other companies.

Mr. Lauterbach further states that the exclusive rights thus conferred upon the Oceanic line cannot be enjoyed by it directly, inasmuch as it does not appear that it has ever proposed to perform any service between the Sandwich Islands and China, and that, in keeping with this conclusion, Mr. Spreckles, upon the refusal of the Pacific Mail Steamship Company to divert its Australian vessels from Honolulu, proffered to the British company, the Occidental and Oriental line, the exclusive privilege conferred on the Oceanic line by the Hawaiian Government.

While the offer has not yet been accepted, Mr. Lauterbach expresses the expectation that it will be. and that the result will be the creation, by these acts, of a special and exclusive privilege to a British company.

The provisions of treaty obligations between Hawaii and the United States are referred to as contravened by an arrangement of the character anticipated, and the Department is asked to remonstrate in the premises in behalf of the Pacific Mail Steamship Company.

The practical effect of the proposed exclusive grant or concession by the Hawaiian Government to the Oceanic line of San Francisco, of which Mr. Spreckles is the controlling manager, if not the sole owner, and the transfer by that gentleman of the franchise or right thus granted to the Occidental and Oriental Company must be to establish and maintain a discrimination against the Pacific Mail Steamship Company in regard to an important and profitable element of their carrying trade; and this, as it is conceived by this Government, would be in contravention of the spirit of the first and second articles of the treaty of December, 1849, between the United States and the Hawaiian Islands, and directly contrary to the letter and spirit of the sixth article of that treaty, the provisions of which are as follows:

Steam vessels of the United States which may he employed by the Government of the said States in the carrying of their public mails across the Pacific Ocean, or from one port in that ocean to another, shall have free access to the ports of the Sandwich Islands, with the privilege of stopping therein to refit, to refresh, to land passengers and their baggage, and for the transaction of any business pertaining to the public mail service of the United States, and shall be subject in such ports to no duties of tonnage, harbor, light-houses, quarantine, or other similar duties of whatever nature or under whatever denomination.

It is true that the exclusive grant of the Hawaiian Government is made directly to the Oceanic Company, an American corporation, but its transfer by Mr. Spreckles to the English company and the refusal of the Hawaiian consuls under instructions from that Government to grant the required certificates to a particular class of passengers unless they take passage on the ships of the line, enjoying the exclusive privilege, accomplished by indirection precisely what the treaty forbids being done directly, i. e., the establishing of the discriminating policy in navigation and commerce against steam vessels of the United States plying between the eastern and western shores of the Pacific Ocean and carrying its mails. The right of the Hawaiian Government to admit to or to exclude from its dominions immigrants of any nationality or race is not for a moment questioned by this, but that the exclusive privilege of carrying immigrants who are admitted to Hawaii should be accorded to any one company owning a particular line of ships, whether American, Hawaiian, or foreign to both countries, is believed to be in itself unjust, and, as I have already observed, wholly inconsistent with the due maintenance of the treaty of 1849. The Pacific Mail Steamship Company have no right to demand an exclusive privilege in such carrying trade, but it may, with manifest propriety, under the terms of the treaty, insist that no discriminating measures against its vessels shall be maintained or permitted by the Hawaiian Government.

You will present the subject to that Government in the light of these suggestions, and it is not doubted but that the enlightened sense of justice of His Hawaiian Majesty will at once enable him to see the possible injustice involved in the proposed arrangement, and that he will inaugurate the necessary measures to avert its being carried out.

You will report the result.

I am, &c.,

FRED’K T. FRELINGHUYSEN.

[Inclosure.]

Mr. Lauterbach to Mr. Frelinghuysen.

Washington, D. C.,
November 10, 1883. (Received November 13.)

Dear Sir: The Pacific Mail Steamship Company, which I represent, has for many years employed four vessels on its line between San Francisco and Australia, which have stopped on their outward and homeward trips at the Sandwich Islands. The vessels of its China line, three in number, have also stopped on their trips to and from China at the islands, and a lucrative and gradually increasing business has resulted to the company, and the commercial interests of the United States have been greatly enhanced thereby. The Occidental and Oriental line of steamships is a line of British vessels plying between San Francisco and China, and stopping at the Sandwich Islands on their outward and homeward voyages.

A line known as the Oceanic line, controlled principally by Mr. Carl Spreckles, has recently begun the carrying business between San Francisco and the Hawaiian Islands. Mr. Spreckles has demanded of the Pacific Mail Steamship Company, since the establishment of his line, that they discontinue the stoppage of their vessels of the Australian line at Honolulu, so that he may have a monopoly of the carrying business without the opposition of our line of steamships.

With this demand the Pacific Mail Steamship Company, in its own interests and in the interests of American commerce, has refused to comply.

In August last the Hawaiian Government granted the privilege to the Pacific Mail’ Steamship Company and to the Occidental and Oriental companies of carrying Chinese emigrant passengers to the Sandwich Islands from China, a privilege which is of great consequence to the Pacific Mail Steamship Company; the amounts to be received from this service being probably sufficient to enable that company to continue its voyages regularly throughout the year, even in dull seasons, thus enabling the mail to be carried with regularity and punctuality both to the islands and to China, and the concession was important in other respects.

The inclosed correspondence shows that the Hawaiian Government had granted this privilege after due deliberation and in view of the excellent character of the service which had theretofore been rendered by the Pacific Mail Steamship Company, and the assurance was given that, unless some unforeseen emergency should arise, the privilege thus extended should not be abrogated.

Soon after the privilege was granted Mr. Spreckles stated to the agents of the Pacific Mail Steamship Company in San Francisco that, unless the calling of the Australian vessels of that company at Honolulu was at once dispensed with, he would procure an abrogation of the contract and would prevent the Pacific Mail Steamship Company from enjoying the privilege of landing Chinese passengers at Honolulu, and would cause them to be excluded from the right so to do. It was not supposed by the company that he could accomplish this. But his power was greater than it was believed to be, and, as appears by the inclosed copy of a letter from Walter M. Gibson, minister of foreign affairs of the Hawaiian Government, dated at Honolulu, October 15, 1883, and addressed to Messrs. Williams. Dimond & Co., agents of the Pacific Mail Steamship Company at San Francisco, he was easily able to carry out his threat. From that letter it appears that the privilege was taken away, not only from the Pacific Mail, but also from the Occidental and Oriental Steamship Company, and granted exclusively to Mr. Spreckles’s line, which, so far as the Pacific Mail Steamship Company is informed, has never proposed to perform any service between the Sandwich Islands and China, so that this exclusive privilege granted to him could not be directly exercised by him. The true purpose of his procuring the abrogation of the concession made to the Pacific Mail and Occidental companies was immediately made apparent when Mr. Spreckles stated to our agents at San Francisco that he would transfer the concession to the two companies, the Pacific Mail and the Occidental, provided Australian vessels of the Pacific Mail Company would refrain from touching at Honolulu. Upon the refusal of the company so to do, he proffered to the British company, the Occidental and Oriental line, the exclusive privilege conferred on the Oceanic line by the Hawaiian Government. The British line has not yet accepted this proffer, so far as I am advised, but is likely to do so, and in that event a special privilege will be afforded to the British line from which the American line will be excluded.

The spirit and the letter of the treaty between the United States Government and the Hawaiian Government—a treaty of exceptional value to the latter Government—grant to the American people and to American commerce at least equal, if not superior rights to those to be enjoyed by any other people. The Pacific Mail Steamship Company does not ask for any special right, but desires the intervention of this Government so that it, an American corporation, maybe accorded equal rights with those granted to any other corporation or individual, whether American or foreign.

I take the liberty of soliciting the intervention of the American Government in this matter, so that, after becoming fully possessed of all the facts, proper action maybe taken.

The next mail for the Sandwich Islands leaves San Francisco on the 23d inst., and I respectfully solicit the immediate attention of your Department to this matter, so that such a letter as the Department may desire to forward to the American representative at the Hawaiian Islands may be then transmitted.

If the letter to the American minister could embody a suggestion that his intervention to prevent the exclusion of the Pacific Mail Steamship Company from privileges enjoyed by others would be favorably regarded by your Department, the company I represent would be very grateful.

I inclose herewith copy of a letter addressed by me to the Hon. H. A. P. Carter, Hawaiian minister to the United States, of his answer thereto, and of the inclosures contained in that letter.

Very respectfully, yours,

EDWARD LAUTERBACH,
Of counsel for Pacific Mail Steamship Company, 45 William street, New York City.

Mr. Lauterbach to Mr. Carter.

New York, November 5, 1883.

Dear Sir: On behalf of the Pacific Mail Steamship Company, of which I am counsel, I beg respectfully to protest against the action of His Hawaiian Majesty’s Government in revoking the permission which, during the month of August last, was granted to the vessels of tnat company and the Oriental and Occidental Steamship line to transport emigrant Chinese passengers from Hong-Kong to Honolulu, and in entering into an engagement with the Oceanic Steamship Company to grant them all the privileges of transporting Chinese emigrant passengers from Hong-Kong and other Asiatic ports to the Hawaiian Kingdom, and in instructing His Hawaiian Majesty’s consul-general at Hong-Kong not to issue any permits for the transportation of Chinese emigrant passengers to the Hawaiian Kingdom to any vessel of the Pacific Mail and Oriental and Occidental Steamship lines after the first day of January next.

The action of the Government which you represent, to which reference is herewith made, is embodied in a letter from the department, emanating from Walter M. Gibson, minister of foreign affairs of the Hawaiian Government, dated at Honolulu on the 15th of October, 1883, and addressed to Messrs. Williams, Dimond & Co., agents of the Pacific Mail and Oriental and Occidental Steamship Companies, in San Francisco; a copy of which I herewith inclose.

The Pacific Mail Steamship Company believes that this action is in violation of every principle of equity and justice, and in contravention of the spirit of the treaty subsisting between the American and Hawaiian Governments; and this company believes that this action was taken at the instance of Mr. Carl Spreckles, and in pursuance of threats that he would procure such action to be taken, which he has repeatedly made. A very brief reference to the facts which led up to this action on the part of the Hawaiian Government will not be inappropriate.

The vessels of the Pacific Mail and Occidental and Oriental Companies plying between San Francisco and China frequently stop on their outward and homeward trips at Honolulu. The vessels of the Pacific Mail Steamship Company plying between San Francisco and New Zealand and Australia also stop occasionally at Honolulu. The facilities thus afforded to the people of the two countries, and the excellence of the service rendered by those companies, were so well appreciated that the privilege was extended them of bringing Chinese immigrants to the islands.

The Oceanic line, controlled largely by Mr. Spreckles, being about to begin the carrying business between the islands and San Francisco, he desired that the Pacific Mail Steamship Company discontinue the stoppages of its Australian vessels at Honolulu, and when the Pacific Mail Steamship Company declined so to do he threatened to procure an abrogation of the permission which had been accorded that company as aforesaid. His threat was thought to be an idle one, for, in a letter from the department of foreign affairs of your Government, dated Honolulu, 18th August, 1883, to Messrs. E. Hackfeld & Co., Mr. Gibson, after giving assurance of the continuation of the arrangements for snipping those emigrants hereinbefore referred to, says: “If any passengers should seek this Kingdom from Japanese ports the Government would certainly be glad that they should be brought here by vessels of the class which the Pacific Mail Steamship Company and the Occidental and Oriental Steamship Company are running, whose superior accommodations and admirable supervision have led to their being accorded the exclusive privilege of carrying Chinese coolies to this country.”

Coupling this flattering but, I believe, truthful encomium with the further assurance contained in the same letter that “unless some emergency, at present entirely unforeseen, should arise, no change would be made in the arrangements referred to without reasonable warning being given to you,” and also with the statement therein contained that “the permission granted was likely to remain in force for some time to come, if the emigration taking place under it be conducted in the manner and with the discretion which the Government has reason to expect,” you may well imagine the surprise of the company I represent when the letter of October 15, of which a copy is inclosed, was received, since no “emergency” of any kind could have arisen, the business not yet having been initiated, save a desire to enable Mr. Spreckles to compel the Australian vessels of this company to refrain from stopping at the islands can be regarded as such an emergency. The purpose of this order of October 15th, granting, as it did, to the Oceanic line, which does not ply to Chinese ports at all, a privilege of which they could not directly avail themselves, was soon made manifest. Mr. Spreckles plainly and bluntly stated to the agents of this company at San Francisco that if they would consent to avoid stopping the Australian vessels at the islands, he would transfer his privileges to our company and the Occidental and Oreiental Steamship Company, but, if he would not so consent, he would give the privilege to the Occidental and Oriental Steamship Company alone, thus affording to British vessels exclusive rights, from the benefits of which our line of American steamships would be deprived.

In the interests of American commerce, and in the true interests of the people of the two countries, this company has refused to submit to the dictation of Mr. Spreckles, and has refused to aid him in establishing a monopoly in the carrying trade between America and the Hawaiian Islands.

The Pacific Mail Steamship Company has not vet appealed to the American Government for protection against the proposed action, in the hope that a proper representation of the case by your good self, and the intervention of your good offices, will prevent the perpetration of what this company regards as an act of great injustice.

Yours, &c.,

EDWARD LAUTERBACH.

Mr. Gibson to Messrs. Williams, Dimond & Co.

Department of Foreign Affairs,
Honolulu, October 15, 1883.

Gentlemen: I informed Messrs. H. Hackfeld & Co., of this city, by letter dated August 18, 1880, by authorization of His Hawaiian Majesty’s Government, that permits would-be granted through the Hawaiian consul-general in Hong-Kong to vessels of the Pacific Mail and Occidental and Oriental Steamship lines to transport immigrant Chinese passengers from Hong-Kong to Honolulu, but stated that no definite engagement would be entered into, and that due notice would be given of any change of the views of this Government in respect to this matter. I have now the honor to inform you that His Majesty’s Government has entered into an engagement with the Oceanic Steamship Company to grant them all the privileges for the transportation of Chinese immigrant passengers from Hong-Kong and other Asiatic ports to this Kingdom that are within the discretion of this Government, and I now give you notice in accordance with an authorization of His Majesty’s Government that His Majesty’s consul-general at Hong-Kong will be instructed not to issue any permits for the transportation of Chinese immigrant passengers to the Hawaiian Kingdom to any vessel of the Pacific Mail and Occidental and Oriental Steamship lines after the 1st day of January next.

I have, &c.,

WALTER M. GIBSON,
Minister of Foreign Affairs.

Mr. Gibson to Messrs. H. Hackfeld Co.

Department of Foreign Affairs,
Honolulu, August 18, 1883.

Gentlemen: I have the honor to acknowledge the receipt of your letter of yester day’s date, in which you ask that the immigration from Japan to these islands may be subjected to the same restrictions in favor of the steamship companies you represent as exist at the present time in regard to Chinese immigrants, and inquire for how long a period the Government will allow those companies to bring Chinese and Japanese passengers to these Islands. In reply to the latter of these inquiries, I beg to say that though, by order of His Majesty’s Government, this department has made it known that a limited Chinese immigration will be permitted, the steamers of the Pacific Mail Steamship Company and of the Occidental and Oriental Company have been designated as the only means of conveyance by which Chinese coolies may be brought here; the Government is not in a position to fix any definite time during which such an arrangement shall last. I can, however, give you the assurance that unless some emergency, at present entirely unforeseen, should arise, no change will be made in the arrangements referred to without reasonable warning being given to you. So far as I can judge the permission just granted is likely to remain in force for some time to come, if the immigration taking place under it be conducted in the manner and with the discretion which the Government has reason to expect. In regard to Japanese immigrants I have to say that this Government has no emigration convention with Japan, and is unable to give you any assurances on the subject. If any passengers should seek this Kingdom from Japanese ports, the Government would certainly be glad that they should be brought here by vessels of the class which the Pacific Mail Steamship Company and the Occidental and Oriental Steamship Company are running, whose superior accommodation and admirable supervision have led to their being accorded the exclusive privilege of carrying Chinese coolies to this country.

I have, &c.,

WALTER M. GIBSON,
Minister of Foreign Affairs.

Mr. Carter to Mr. Lauterbach.

Hawaiian Legation, Washington, D. C., November 6, 1883.

Dear Sir: I have the honor to acknowledge the receipt of yours of the 5th instant. I do not discover in the inclosures forwarded any evidence of any desire on the part of the Hawaiian Government to force any discontinuance of the stoppage of the vessels of your Australian line at Honolulu.

As I am not yet advised of the reasons of the Hawaiian Government in granting to the Oceanic Steam Navigation Company all the privileges of transporting Chinese immigrant passengers from Hong-Kong, I await further communication on the subject.

I have, &c.,

H. A. P. CARTER.