No. 579.
Mr. Baker to Mr. Frelinghuysen.

No. 600.]

Sir: Referring to your dispatch numbered 187, of date 22d ultimo, relative to the matter of the 30 per cent, additional duty, and also to my several earlier dispatches respecting the same matter, I herewith inclose, for your prompt information, a copy of a note, of date 28th instant, which 1 have addressed to Mr. Seijas on the same subject.

I took this note personally to the ministry of exterior relations on the 28th instant, intending not only to deliver it, but also to read it to Mr. Seijas, but finding that he was not in, I left the note at the ministry. I called again at the ministry this forenoon, and finding Mr. Seijas in, I drew his attention to the note, took it in hand, read the entire body of it to him, enforcing it by accompanying verbal remarks upon different parts of it, and at the close made a friendly and earnest request that he would bring it to the attention of the cabinet, which, in very fitting terms, I understood him to indicate that he would do to-day. I also made some strong and plain but equally friendly verbal remarks in general criticism of the law imposing the additional duty of 30 per cent, in question.

I respectfully draw your attention to the inclosed copy of my said note.

I am, &c.,

[Inclosure in No. 600.]

Mr. Baker to Mr. Seijas.

Sir: Referring to the various conversations which I have heretofore had with your excellency relative to the injurious influence upon the commerce of the United States which si exerted by the additional duty of 30 per cent, imposed by the Government [Page 894] of Venezuela upon commodities proceeding from foreign colonies to the ports of this country, or from Europe or the United States to the ports of this country, with transshipment in such colonies, I have now the honor to respectfully and earnestly invite your excellency’s further attention to the same subject. This I do in that spirit of complete frankness and friendliness which should mark the intercourse between our respective countries.

I have recently received from my Government a further and important instruction respecting the subject in question; an instruction which, whilst manifesting the earnest and just interest which it takes in the matter as adversely affecting our commerce, is yet conceived in the friendliest spirit, and expressed in the friendliest terms towards Venezuela.

In reference to the urgent desire of a remedy for the existing state of things, the opinion is expressed in that instruction that the existing state of things is entirely inconsistent with the building up of the intimate commercial relationship between the United States and Venezuela, which is so much to the interest of both countries.” It is therein treated as “self-evident” that “through invoices of shipments, certified by the consuls of Venezuela in the United States and recertified by the like officers in the port of transshipment,” would be a complete protection of Venezuela against irregular trade in respect to such shipments-. It is added that “commerce by way of transshipment and transit is on many routes of international intercourse recognized as an indispensable fact, to be regulated and facilitated by judicious legislation.” And, as showing the friendly confidence with which my Government deals with the matter, it is further added that “there is reason to believe that President Guzman Blanco is favorably disposed to obtain relief in this connection. That he should exhibit such a disposition is only natural, in view of the repeated evidences of friendship and esteem which his Government has shown towards ours, and which we have had pleasure in manifesting also in return.”

The aforesaid instruction is accompanied by a copy of a communication addressed to the honorable Secretary of State by many prominent trading-houses of New York concerning “the great detriment brought to their trade” by the additional duty in question, and requesting the honorable Secretary to use his good offices with Venezuela in the premises. This communication proceeds from many New York houses “engaged,” as the communication says, “in the shipping and the sale of American goods for and to the West India Islands and the importation into the United States of South American produce.”

As coming from practical men, speaking of a practical matter, I regard this as an important document, and make a rather copious extract therefrom respecting the effect which the additional duty in question has exerted and is exerting upon the trade of the United States.

“The proximity of Venezuela to the British island of Trinidad, the Danish island of St. Thomas, and the Dutch island of Curaçoa, had made them, after years of careful work, very valuable points of indirect connection between the United States and Venezuela through the agency of former residents of those islands who subsequently established in the United States.

“By the establishment of the differential duties the direct trade of the United States with those islands and the indirect trade with Venezuela have suffered material detriment.

“Of the several sailing vessels that had been actively running between New York and said islands scarcely any remain in the line, and the steamers that formerly used to go every fortnight with full share of cargo for those ports, you hardly get enough freight to pay their continuing in the trade.

“While the business between New York and those islands is thus decreasing, the direct trade with Venezuela gets no proportionate increase in any but exclusively American products, such as flour, lard, kerosene, &c., or such articles as cannot be got from Europe, because the largest number of houses in Venezuela are European firms, which, engaged for years in business with European markets, import from these all other goods, such as cotton fabrics, machineries, agricultural implements, tinware, boots and shoes, candles, soaps, lamps, glassware, perfumeries, plated goods, clocks, watches, books, canned meats, preserved fruits, liquors, matches, jewelries, ropes, blocks, oars, and other ship chandlery articles, straw paper, writing paper, envelopes, wires, furniture, trunks, sewing-machines, and scores of other articles-which it would be too long to enumerate, and in which the United States, in competition with Europe, had of recent years established very valuable indirect connection with Venezuela through those islands.

“In the like manner the United States used to export to those islands quantities of East Indian and Chinese goods from bonded warehouses here, such as rice, mattings, fire-crackers, cassia, &c., all of which those islands, through their established trade with the United States and the greater facilities to get the same from here than from Europe, used to import constantly from here to send to Venezuela. Said articles are now going from Europe to Venezuela.

[Page 895]

“Farther does the trade of New York suffer from the circumstance that a great portion of the Venezuelan products, which formerly were purchased by merchants of those islands for shipment to New York, are now taken by European houses in Venezuela for shipment to Europe owing to the lack of traffic between those islands-and Venezuela.”

Now, if I understand the foregoing, its meaning is, in short, that the practical operation of the additional duty in question is found to be that it not only acts injuriously against the trade of the United States, but that it actually discriminates, in effect, against this trade, by diverting a heretofore established part of it into European channels.

I am, of course, entirely convinced, as I am sure my Government is also, that no such motive was had in view by the Government of Venezuela when it established this additional duty. I am persuaded that the Government of Venezuela appreciates the important and fundamental principle of policy that the profound friendship of the United States for her sister republics of South America, taken in connection with her great relative proximity to the ports of Venezuela, and her vast, diversified, and rapidly growing resources for trade, make it at once the political and economical interest of Venezuela to build up, extend, and foster, her commercial relations with the United States, instead of embarrassing, curtailing, and crippling these relations, which last is clearly the practical effect of the measure imposing the 30 per cent, additional duty of which I write.

The general effect of this measure is harmful to the commerce of the United States; and its particular effect, in the same direction—by the way of operating as an artificial hardship upon the existing steam transit between Venezuela and the United States—is none the less so. Under the operation of the law imposing this additional duty, the line of steamers running between New York and the Venezuelan ports of Maracaibo, Puerto Cabello, and Laguayra, with stoppage at Curaçao, is very injuriously affected. The two deep-draft steamers of this line proceed from New York, via. Curaçao, to. Puerto Cabello and Laguayra. But, inasmuch as they are of too deep draft to approach Maracaibo, the company employs a shallower-draft steamer to fill out the line between Curacao and that port. Nevertheless, I am advised that under the operation of the law in question no merchandise is sent from New York for Maracaibo by these steamers, although the line extends from the one port to the other. And I am further advised that under the operation of the same law the branch steamer plying between Maracaibo and Curaçao has been for months past running in ballast from the latter to the former port. It is easy to see that these operations have a direct tendency to break down the line.

The reason why the steamers in question carry no merchandise from New York for Maracaibo, and that the branch steamer runs without cargo from Curoçao to Maracaibo, is that the law in question does nor admit transshipment at Curaçao, not even so much as the transfer of goods from the deeper to the shallower draft steamers in open port without imposing the additional 30 per cent, of duty, which, of course, is prohibitive. And thus it is that the law imposing this additional duty has completely paralyzed this line of steamers to the extent of its entire movement of merchandise from New York to the important port of Maracaibo.

In view of the very great uses of lines of ocean steamers as instruments for the rapid diffusion of commerce, intelligence, and all the elements of civilization between nation and nation, I am convinced that your excellency will entirely agree that it should be an important part of the policy of every enlightened nation to carefully avoid inflicting artificial and unnecessary harm upon such lines, and whenever it may be discovered that this has been inadvertently done, to make prompt rectification of the unintended mischief.

I am myself a gratified witness to the great and beneficial change which has taken place in intercommunication between the United States and Venezuela during the time of my stay in this country—a change which is largely dependent upon the line of excellent steamers which has within that time been put in regular service between the great commercial emporium of the United States and several of the most important ports of this republic; and in view of the railway construction which, to all appearance, is now being successfully prosecuted upon an important scale in Venezuela, and of the natural tendency of this means of internal transit to promote social order and industrial development in a state, I, with pleasure anticipate the day, which ought not to be distant, when yet other and additional steamers will be needed to-meet the growing demand arising from the still more extended and intimate commercial relations of the two countries—a consummation which I am confident your excellency and your excellency’s Government will readily agree with me in regarding as alike beneficial to both nations.

Entertaining, as I do, such sentiments, and I am sure they reflect those of my Government—sentiments which are at once so just and so friendly towards Venezuela—it is with a feeling of pain that I observe, as I have pointed out, the untoward general effect of the law in question upon the commerce of the United States and its untoward [Page 896] particular effect in the same direction by way of operating as an artificial hardship upon the existing steam transit between the two countries.

As I have already indicated, it is a matter of course that no such results were intended by the Government of Venezuela when it enacted the law. I am too well assured of the friendly feeling of this Government towards mine to entertain so much as a shadow of such a suspicion. Nevertheless, the results have followed and do exist. So complicated are commercial, fiscal, and economical affairs that the wisest legislator cannot always foresee all the important effects of a new law affecting these matters; and the experience of the world’s legislation abounds in enactments for the modification or repeal of such laws to the end of remedying mischiefs or hardships which had unexpectedly flowed from them.

In view of the premises, and in full recognition of all the sovereign powers and rights of Venezuela, I respectfully, earnestly, and in the most friendly manner request, on behalf of the Government of the United States, that the Government of Venezuela will, at the earliest convenient time, consider the matters of injury and hardship which I have made statement of in this note, with a view to providing, in its own wisdom, a proper and adequate remedy therefor; and I assure your excellency that such action on the part of the Government of Venezuela, attended by a consummation so desirable, would be very pleasing to the Government of the United States.

I avail, &c.,