Mr. Sirobel to Mr. Bayard.
Madrid, October 13, 1885. (Received October 31.)
Sir: Referring to Mr. Foster’s No. 389, of August 18, I have the honor to inclose a copy and translation of a note received from the minister of state on the 6th instant, reporting the refusal of the minister of finance to return the duty collected at the custom-house at Barcelona on a cargo of old metal shipped from Cuba by Mr. F. B. Hamel, an American citizen. While it is to be inferred that the question is not yet settled, but is before the contencioso division of the council of state, which has the power to review on appeal the decisions of ministers of the crown in especial cases, I beg leave, however, to call your attention to the arguments put forward in the note to justify the refusal of administrative intervention.
On page 20 of the Peninsula Tariff, in the edition of 1876, we find the following:
Ninth provision; commerce with the Spanish provinces of America. (See note 3 of this tariff and article 317 of the regulations.)—Merchandise, the product of and proceeding from these provinces, which are not assessed in the tariff at the duties which, as such, they ought to pay, shall he liable to half the duties fixed for foreign importations of the same kind.
Note 3 of the tariff simply restricts the above provision to goods brought directly from the provincial ports, but article 317 of the regulations contains the folio wing:
To enjoy the benefits of provision 9 [just given above] * * * the importers will be required to present, at the time Of entry, a certificate of the custom-house of the port of origin, proving that the merchandise is the product of these provinces. * * * There shall be excepted from the necessity of the certificate useless or worn-out scraps of any metal which proceed directly from the above-mentioned provinces of ultramar, which pieces shall be considered for the purposes of the tariff as products of the same provinces, whenever, from their character, they can only be used as raw material.
You will therefore observe (1) that the benefit or reduction to half duty allowed by the ninth provision is only applied to merchandise on the condition that it is “the product of and proceeds from the Spanish provinces of America;” (2) that by article 317 of customs regulations, scraps of old metal became entitled, even without giving a certificate of their origin, to the half reduction allowed by this ninth provision, because “they shall be considered for the purposes of the tariff as a product of the same provinces,” the only restriction being that they should be useful as raw material, and not of any intrinsic value.
In the face of this, however, the ministerial note says:
Article 317 of the customs regulations did not establish, as is supposed and alleged, freedom for useless metals proceeding from our Antilles, nor did it say, nor could it reasonably say, that they were the products of these islands, and even at that time half of the duties was imposed on said metals as on those proceeding from foreign countries, and they never enjoyed the absolute exemption that is now claimed.
Here the writer falls into an absolute inconsistency by denying that this kind of merchandise was considered as the product of the Antilles and then admitting that it only paid half duty. Why should it not have paid full duty I Because by the explicit declaration of article 317 it was considered as the product of the Spanish provinces, and therefore entitled to the benefit of the ninth provision of the tariff, which pro vision [Page 759] was restricted to goods which were the product of and proceeded from these provinces. It has never been supposed and alleged that this article 317 entirely exempted such merchandise from duty, but that the article was a declaration by the Spanish Government that metal so old and worn out as to be only fit for raw material, when proceeding directly from its provinces, was to be considered as the product of those provinces, and entitled to all the benefits resulting from such consideration; nor is there any restriction made that such metal should be from the sheathing of Spanish vessels, because, on the contrary, the term used is the broadest possible—scraps “of any metal” whatsoever.
Down to the time of the establishment of the law of mercantile relations with the Spanish provinces of the 30th of June, 1882, all such metals were considered as products, and therefore entitled to the benefit of the ninth provision—the payment of half instead of the whole of the regular duty—which reduction is admitted in the note. This law of the 30th June, 1882, was a sweeping advance towards free trade with the provinces. It allowed the products of Cuba, Porto Rico, and the Philippines to be admitted free of duty, except tobacco, aguardiente (a kind of brandy), sugar, cocoa, chocolate, and coffee. Duties on these excluded articles are to be reduced 10 per cent, during each year until July 1, 1892, when they are to be entirely abolished, and the principles of coasting trade (cabotage) applied.
As scraps of old metal had, until this time, paid only half duty, for the single reason that they were considered the product of the provinces from which they proceeded, the unanswerable conclusion is that after the passage of this law they would, for the same reason, pay no duty at all. This was the view taken for more than a year, until, without warning, the duty was sprung upon Mr. Hamel’s metal, although during the intervening period several of his cargoes had been passed free; nor should it excite surprise that the duty now levied is much greater than it was before the passage of the law of 1882. To return to the old duty, based as it was entirely on the theory that merchandise of this sort was a product of the Antilles, would anomalously admit that it was such a product, but not entitled to the advantage resulting from that fact, namely, free admission by the above law. The Spanish Government has, therefore, entirely ignored its own tariff in operation prior to 1882, declares that old metals never were considered the product of the Antilles, and that they must now pay the duty collected from foreigners not having by treaty the treatment of the most favored nation.
The royal order of January 17, 1885, can only apply to this case by endowing decrees of that character not only with retroactive force, but also with the ability to abrogate existing laws, and it is to be hoped that the council of state will take cognizance of the facts to which I have undertaken to call your attention. The claim, it seems to me, does not rest upon any question as to whether these metals have paid duty under another form, the discussion of which occupies a large portion of the note, and is the basis of the royal order of January 17, 1885, but upon the historical fact that for a series of years, down to the passage of the law of 1882 giving freedom to the products of the Antilles, metals entering the ports of Spain were proclaimed by the customs regulations to be the products of the Spanish provinces whence they proceeded, and received all the benefits resulting from that fact. Might it not be proper, therefore, to express some disappointment at the refusal of administrative interference where manifest injustice is not even adorned by plausible reasoning?
I have, &c.,