No. 349.
Mr. Bayard to Mr. Bell.

No. 30.]

Sir: The attention of the Department has been called to a measure now before the States General of Holland which will if adopted increase the duty upon refined petroleum imported into the Dutch colonies from 5d. to 1s. 6d. a case. Such a measure cannot but be prejudicial to the commercial interests of the United States, and in an even greater degree to those of the colonies of the Netherlands, for it threatens the existence of a commerce now highly advantageous to both parties to the exchange. The proposed duties would under existing conditions of trade prove almost a prohibition upon the commodity taxed, and by depriving the inhabitants of the colonies of an illuminating oil of high quality and low price would impose a heavy burden upon them.* * *

The importance of this trade in petroleum between the United States and the Dutch colonies may be seen from the following facts:

During the fiscal year ending June 30, 1885, the value of the total exports of domestic merchandise from the United States to the Dutch East Indies was $2, 103,066, and to this total petroleum contributed $2,024,732. The entire export trade of the United States to these colonies may thus be said to rest upon this one article. The importance of this commodity [Page 735] in the trade with the Netherlands and the other colonial possessions of that country is somewhat less, but still of no mean proportions. Of a total export trade to the Netherlands of $16,034,137, petroleum forms nearly one-eighth ($2,047,597); in that to the Dutch West Indies it figures with only $9,859 out of a total of $653,853, the comparative insignificance of which is attributable to natural causes; and in that to Dutch Guiana it contributes $13,928 out of $276,667.

To impose a duty which is even a moderate increase on that now assessed would inflict a loss that can only be counted by millions.

The prejudice arising from the proposed change in duties would not be confined to the trade between the United States and the Dutch colonies, but would also affect injuriously the commercial relations between the United States and the mother country. This injury would not apply to petroleum alone, but to general commerce, where the interests at stake are far greater. To level a blow at so important an article of export as petroleum is to the United States must create a prejudice against the nation that struck the blow. It is hardly necessary to show why retaliatory duties are to be condemned, but the feeling created in this country by the restrictions and prohibitions upon meat and meat products of the United States by European nations gave occasion to a movement in favor of such duties which cannot but be strengthened by such a policy as this proposed increase of duty embodies.

In the fiscal year 1885 the total imports from the Netherlands and her colonies into the United States amounted to $9,566,427, and the total exports from the United States to these countries amounted to $19,687,723. To strike at petroleum would threaten a direct loss in that commodity of upwards of $4,000,000 and involve an indirect loss of an unknown extent upon the import and export trade under discussion, which without petroleum amounts to more than $25,000,000 annually. The proposed duty cannot be levied for revenue purposes as it virtually amounts to a prohibition upon the importation of petroleum) neither can it be regarded as a measure of protection, as there is no native product in either colonies or mother country that needs protection or that is able to supply the place of petroleum; nor is there any country on either continent, apart from the United States, that can furnish an illuminating oil of such a high quality as is now imported into the Dutch colonies. It is not therefore straining a point to regard the proposed duty as one leveled directly against trade interests of the United States.

There are other considerations which enforce the position of the United States in this matter. In the year 1885 the total imports into the United States from the Netherlands and her colonies amounted in value to $9,566,427. Of this total $5,414,599, or more than half, was subject to no duties whatever under the tariff of the United States. The showing is even more striking when the trade of the colonies alone is considered. Of a total import trade from the Dutch West Indies of $3,261,671, more than 91 per cent., or $2,991,490, was admitted free of duties. In the trade with the Dutch East Indies the imports not subject to duty were more than seven times as large as those on which duties were assessed, and in the trade with Dutch Guiana only one-fifth of the imports paid duties at our custom houses. Few countries of Europe are so little affected by the tariff of the United States as the Netherlands.

The United States in 1883 removed all duties from spices, which form, next to sugar, the chief article of export from the Dutch colonies; and this repeal resulted in conferring substantial advantages upon these [Page 736] colonies by throwing open to their products an extensive and rapidly increasing market.

From the English colonies alone are the imports of spices greater than from the Dutch, so that the highest advantage to be obtained from the repeal was secured by these two nations.

The repeal of this and other duties should be taken as an earnest of a wish on the part of the United States to remove restrictions upon trade and to invite and encourage freer commercial relations between this country and other nations. The proposed increase in the duty on petroleum imported into the Dutch colonies can only be regarded as a measure of a contrary tendency, and calculated not only to impede, but to destroy, an extensive commercial interest, which can exist only through the mutual advantage accruing through it to both parties to the exchange.

I am, &c.,