No. 497.
Mr. Davis
to Mr. Foster.
Washington, June 23, 1883.
Sir: Mr. Reed’s No. 221, of the 28th ultimo, has been received, and the reply of the Spanish Government therewith transmitted, in relation to the Spanish consular fee, has been considered.
I must express my disappointment that the matter, after so laborious a correspondence, during which the views of this Government have been most clearly set forth and consideration thereof promised by Spain, should now stand in the very unsatisfactory condition to which it is brought by the note of the Marquis de la Vega de Armijo of the 20th May.
The files of your legation contain such precise instructions on the points in dispute that I need do no more than refer you to the records for a full view of our position in the controversy. Briefly, however, we claimed that the fee imposed represented no clerical act of the consul and afforded no guarantee to the home Government that the invoices are themselves correct, or that they correspond with the manifest, and therefore that the charge of 10 cents per ton or 40 cents per head of cattle, when levied by the consul, amounted simply to an export tonnage or per capita tax levied by Spain within the territory of a friendly state. His excellency the Marquis de la Vega apparently admits the justice of the second stage of this argument, for he proposes to get rid of the question, so far as the practical levying of an export tax in foreign countries is concerned, by making the tax collectible within Spanish jurisdiction.
This proposition is one which can only be regarded with astonishment. Either the tax is a consular one, representing a fee for a service performed by a consular officer and applicable to the maintenance of the consular system, or it is nothing more than a revenue tax levied on exports from foreign ports for the benefit of the Spanish treasury. We have claimed, with strong support of argument, as we think, that the charge is not properly a consular one, but, in its nature and mode of payment, a revenue tax. The reply of the Spanish Government makes the charge in fact as well as in principle the very revenue tax we [Page 780] claimed it to be and proposes to direct its collection in Spain. If the charge is in principle a proper consular charge, it is a proper one to be collected by the consuls themselves. If not a proper one to be collected by the consuls on their own behalf, propriety is not to be communicated to it by trusting the goods, so to speak, for the amount of the tax, until they come within Spanish jurisdiction.
My argument assumes that the charge, even if to be collected in Spanish jurisdiction, remains, in the judgment of the Spanish Government, a consular charge, and that the assumed right to collect it arises out of certain transactions to which the exporters, on the one hand, and the Spanish consul in the United States on the other, are respectively parties. In such a case this Government is unable to see that a change in the mere place of payment would change the nature of the fact in which the alleged obligation to pay originates. The objectionable tax would remain as before, in essence, an export tax levied in the United States, although its material collection may be performed in a Spanish port.
There is but one way in which the proposal to collect 10 cents per ton of cargo from the vessels of the United States in Spanish ports could be regarded as defensible under international law, and that is by abandoning altogether the sophistical contention that it is a consular fee, and collecting it as a distinct import tax, levied in Spanish ports, in addition to customs and other import dues prescribed by existing law. If so levied and collected on all foreign cargoes brought within Spanish jurisdiction, without distinction of flag, this Government could not controvert the perfect right of Spain to adopt such a measure; but it could not look with equanimity on any partial measure, the practical result of which would be the imposition of a discriminating duty of 10 cents per ton against the cargoes of vessels going from the United States to ports of Spain. The answer of the Marquis de la Vega is understood to propose the establishment of such a de facto discrimination. He says that the obnoxious tax, instead of being collected at the Spanish consulates in the United States, will be exacted by the collectors of customs at the port of destination. It does not appear that the modified form of collection is to apply to importations into Spain from any other country than the United States.
It seems necessary, even after all that has been heretofore said, to direct you to make clear to his excellency the Marquis de la Vega the difference between our consular fee for the verification of an invoice and the Spanish consular tax on the tonnage of the vessel’s cargo.
The act of a United States consul in a foreign country, with respect to an invoice presented to him, is a distinct and responsible service destined to protect bona fide shippers and the revenue alike from frauds by undervaluation and otherwise.
The validity of the transaction is scrutinized at every step. The exporter must be known to the consul, he must appear before him and make oath that the descriptions and valuations of the goods are correct, and the consul must examine the prices given, and assure himself that the goods are honestly valued. The consul must, in certain cases, procure and forward to his own Government samples of his invoiced goods. The invoice is executed under oath in triplicate, one copy being recorded in the consulate, one copy being forwarded to the collector of customs at the port of destination, and the third being delivered to the exporter.
In event of there being ground to expect fraud or undervaluation, the consul must collect evidence as to the market value of the goods, and forward a report by the same mail to the collector at the port of destination. [Page 781] When the amount of clerical labor is considered, the United States charge of $2.50 for the entire operation, irrespective of the amount or value of the invoiced goods, is believed to be reasonable and just. It certainly corresponds, as a fee, to a service performed by the consul. The service being uniform, the fee is so likewise, and is paid by the person to whom the service is rendered.
The Spanish tax is wholly different. It purports to be for comparing the invoices and bills of lading with the vessel’s manifest. It is a distinct fee from that for authenticating the manifest, for which from thirty to fifty pesetas ($6 to $10) is demanded. The bills of lading are submitted by the captain with his manifest, and are simply compared by the consul. I am unaware what useful purpose the operation subserves as a guarantee. If its effects were to establish under the consul’s certificate the fact of conformity between a bill of lading and the ship’s manifest, and so exempt the captain of the vessel from a vexatious fine when the goods are found to differ from the manifest weight or description, an object might be discerned worthy of consideration. But in any aspect of the case the service performed by the consul is practically invariable, while the fee varies and is computed on a basis wholly disconnected from the consular act, and bearing no conceivable logical relation thereto. The Spanish consular fee is, in short, a pro rata tax on the cargo of the vessel, and not a specific fee for a specific act performed by a Spanish officer.
Not only is the reply of the Marquis de la Vega unsatisfactory in its general aspect, but it is even more so with respect to the particular reclamations made for the return of the excessive capitation charged on cattle shipped from Key West by Mr. McKay and others. His excellency admits that the tax was wrongfully collected; that the circular of the 18th October, 1876, suppressed the charge of 40 cents per capita and substituted a tonnage tax of 10 cents, and that the unlawful collection of the old rates, notwithstanding their formal abrogation, has only recently been put a stop to.
It does not appear to this Government a sufficient or just reparation for a wrongful act admittedly perpetrated by the Spanish officers of the consulate at Key West since 1876 to give orders that hereafter the wrongful tax shall not be collected. The case is conceived to be one where no less a reparation than the return of the illegally collected excess could satisfy either the right pertaining to the United States or the high sense of justice of Spain. It will doubtless be enough for you to call the attention of the minister of state to this point to insure the cheerful correction of the oversight, and a prompt offer to refund the overcharge in question.
I am, &c.,
Acting Secretary.