No. 379.
Mr. Bayard
to Mr. Curry.
Washington , February 23, 1886.
Sir: I transmit herewith, for your information and such use with the Spanish Government as you may think prudent, the petition and protest of maritime associations, ship owners, shipping merchants, and [Page 779] exporters of New York and Portland, Me., respecting the manner in which the commercial agreement of February 13, 1884, is being observed by the Spanish authorities.
It will be seen from these papers and from the correspondence between this Department and your legation since that agreement went into operation, that the method of its inforcement by the Spanish authorities has been a source of repeated complaint on the part of the shipping and export interests of the United States, and has proved far from satisfactory to this Government. The entire history of the commercial and diplomatic relations which led to the agreement shows that the main object of that compact was to abolish the discriminating flag duties which the two Governments had established in the trade between the United States and the Spanish Antilles, and this is plainly stipulated in Articles 1 and 2.
The suppression of differential flag duties provided for in article 1 necessarily meant that in the trade from the United States to Cuba and Porto Rico the American flag, and the cargo under it should be treated in those islands precisely upon the same terms as the Spanish flag. It thus had not been the case this Government would have possessed no power to enforce Article 2. It is to be noted that the agreement is a simple executive act on the part of the United States.
The authority to enter into and execute it was derived solely from section 4228 of the Revised Statutes of the United States. By this section Congress conferred upon the President the power to suspend the 10 per cent, discriminating duties imposed upon the products and vessels of certain foreign countries, including the Spanish Antilles, upon the express condition that satisfactory proof should be given that no discriminating duties were imposed upon the vessels of the United States and their cargoes.
The notice which the Spanish Government gave, after signing the agreement, that it would put it into execution on the 1st of March following its date, was accepted by this Government as sufficient proof under the act of Congress cited, and the President’s proclamation was accordingly issued suspending the 10 per cent, discriminating duties imposed on Spanish vessels bringing cargoes from Cuba and Porto Rico.
But it appears from the protests herewith inclosed and from the information heretofore sent to this Department by the consul-general at Havana, that Spanish vessels are permitted to carry foreign goods transshipped in American ports to Cuba and Porto Rico and have them admitted under the third column of the tariffs of those islands, while similar goods carried in American vessels are required to pay the higher duties of the fourth column. This is a manifest discrimination against the American flag, the imposition of a differential duty, and hence a violation of Article 1 of the agreement. Under section 4228 the President is only authorized to continue the suspension of the 10 per cent, discriminating duty so long as the reciprocal exemption of vessels of the United States and their cargoes shall be continued “and no longer.”
By reference to Mr. Foster’s No. 241 of August 8, 1884, it will be seen that this phase of the question was brought to the attention of the Spanish Government, accompanied by the declaration that if this Government had understood that the agreement would be so observed by Spain it never would have been signed or put into execution, and that if the interpretation of Article 1, as enforced in Cuba, was to be maintained, it would become the duty of the President to annul the agreement. It further appears from Mr. Foster’s 397 of August 25, 1885, and his 403 of August 29, 1885, that the Spanish minister of state acquiesced in the [Page 780] view taken by this Government, and stated that he had recommended to the minister of ultramar that a royal order be issued placing American vessels in the Antilles upon the same footing as Spanish vessels in respect to foreign goods carried by them 5 and that Mr. Foster brought this fact to the attention of the minister of ultramar, who promised to give the subject his early attention.
In view of these facts it is desired that you will ask for the matter the careful and serious attention of the Spanish Government, in the confident expectation that early measures will be devised in consonance with the reasonable views of this Government.
It would be a source of the deepest regret if the President should be forced by the unwarranted interpretation placed upon the agreement of 1884 to withdraw the suspension of the 10 per cent, discriminating duty. This can be avoided by the action indicated by Señor Elduayen, in placing American vessels in Cuba upon the same footing as Spanish vessels; and the liberal and friendly spirit manifested by the present ministry at Madrid justifies the belief that you will be able to bring it about at an early day.
The Spanish consular tonnage-tax, to which the second part of the petitions and protests refer, has been the subject of recent instructions to yon, and I am gratified to know is receiving your careful attention.
The tax is such a manifest infringement on the rights of national sovereignty and on our Federal Constitution, that I hope for its early abolition through your present efforts.
I am, sir, &c.,