No. 359.
Mr. Bayard to Mr. Bell.

No. 49.]

Sir: I have received your dispatches Nos. 117 and 119, of the 27th ultimo and 1st instant, all in reference to the correlated questions of the taxation of petroleum in Holland and Sumatra tobacco in the United States.

As far as can be seen from your reports, the Netherlands Government does not so much except to the present duties in this country on wrapper and ordinary tobacco as it erroneously apprehends a positive discrimination against the specific Dutch product of Sumatra, which might operate to exclude it, and it alone, from our markets, and that the contemplated Dutch legislation in respect of petroleum imports is suggested by this unfortunate apprehension.

To meet such a misconception was the motive of my instruction No. 44, of 8th February.

Where a peculiar class of tobacco is grown in America and Asia, which by its fineness and freedom from veins is adapted solely for use [Page 751] as wrappers, and because of suck use brings a price double or treble that of ordinary leaf tobacco, it is proper that an intelligent tariff measure should take cognizance of the difference in application and value, and prescribe specific or ad valorem duties accordingly. That the more valuable product may be the growth of a limited area, perhaps of one or two countries only, does not make the duties, if corresponding to value, unjustly discriminatory; neither does the fact that a certain kind of valuable tobacco grown in East India and the Malay Archipelago, is known to trade as “Sumatra tobacco,” make the imposition of proportionate duties thereon a discrimination against the Dutch possession from which it takes its name. It is the kind of tobacco and the use to which it is put that govern the assessment of duties, and not the country where it grows.

It seems necessary to a clear examination of the matter that any idea that the existing tariff of the United States is designedly unfriendly to Holland should be dispelled. It is not to be supposed that the Dutch Government will contend that wrapper tobacco, which by its physical characteristics and greatly enhanced price is readily separable from all other grades of tobacco, is not properly dutiable at a rate proportionate to its market price.

It was the undoubted intention of Congress, in framing the present tariff of 1883, that wrapper tobaccos, which had within a few years only begun to be imported in competition with the domestic growth, should pay a higher rate of duty than ordinary tobaccos; and it was equally the intent of the law that it should apply only to such leaf as is imported for use as wrappers. The duty is not aimed at the occasional imported leaves which may be separated and do duty as wrappers, after a fashion, but at the leaf grown expressly for wrappers and fit for no other profitable use.

The simple question is, whether tobacco from any foreign country, and especially from the Dutch colonies, which may not be suitable for use as wrappers and does not command the market price of wrappers, is, under the present tariff, compelled to pay duties as wrappers; and, conversely, whether foreign leaf, suitable and intended for use as wrappers and valued as such, finds entry at the common rate of duty.

On due establishment of either fact it will be in order to seek a remedy.

I do not understand that any complaint is made of excessive rates of duty under the present tariff. Indeed, it is not seen bow there could be5 for any readjustment of the duties on foreign wrappers proportionate to their price as compared with the common grades of leaf, or even with the market value of the domestic wrapper-leaf, would probably result in higher duties than at present.

I am, &c.,