Complying with your instruction No. 476, of the 15th ultimo, “to use my
constant and discreet efforts to prevent any such discrimination from being
continued, where it has already been granted, or extended by grant to other
lines,” I have invited the attention of the Salvadorian Government to the
above-mentioned contract, and have asked that the rebate shall be extended
to all American vessels arriving with cargo at the ports of this Republic.
The demand has been granted, and will probably be made to extend to all
regular lines of other nationalities. I have the honor to inclose copies of
correspondence with the minister for foreign affairs, and trust that my
action in the premises will be approved.
I beg leave to add that notwithstanding the fact that. Guatemala and Salvador
have placed our vessels on an equality with the before-mentioned
Spanish-American line, the necessity still remains for some legislation
which will effectually prevent such acts of unfriendly discrimination in
future.
[Inclosure 1 in No. 697.]
Mr. Hall to Señor
Delgado.
Legation of the United States in Central
America,
San
Salvador, August 10,
1887.
Mr. Minister: The Department of State of the
United States, in several instructions to the writer, assumes that the
rebate in customs duties which the Governments of Salvador and other
Central American Republics have recently granted to the so-called
Spanish Central American fine of steamers of the Marquis de Campo is
contrary to the spirit and intentions of existing treaties of commerce
and friendship with these Republics.
Under date of the 6th May, 1886, a contract was concluded between the
Government of your excellency and Messrs. Irigoyen and March
(subsequently transferred to the Marquis de Campo) for the establishment
of the above-mentioned line of steamers between Panama and San
Francisco, touching at the ports of Salvador. This contract stipulated
for a rebate of 3 per cent. in the customs duties on all cargo or
merchandise imported into Salvador by the vessels of that line. It
appears, however, that such a palpable infraction of the treaty of the
6th December, 1870, between the United States and Salvador did not
escape the notice of the national constituent assembly of this Republic
when the contract was presented for ratification. The stipulation for a
rebate of 2 per cent. was, by a decree of the assembly, dated the 10th
of September, 1886, rejected because contrary to the
treaty with the United States.
My Government, to which I forwarded copies of the contract and decree,
while manifesting its gratification over the action of the assembly,
expresses its opinion that the proposed alteration of national customs
tariff for the benefit of the vessels of
[Page 139]
any special nationality or company, although
professedly in the nature of a subsidy, was contrary to the spirit of
all modern treaties of commerce, as well as of good in ternational
relations based upon equality and comity.
Your excellency will, therefore, be able to appreciate the surprise and
disappointment of my Government upon receiving, as it will receive in a
few days, the additional contract, bearing date of the 14th June last,
between the agent of the Marquis de Campo and the Government of
Salvador, in which the same rebate is stipulated to the Spanish Central
American line; that the same objectionable feature of the contract of
the 6th May, 1886, already rejected by the legislation of Salvador, is
again inserted in this additional contract, and in a form which might
lead to the impression that the obligations of a solemn treaty between
two nations whose relations have never been interrupted, are sought to
be evaded through technical constructions quite unusual with friendly
Governments in their intercourse with each other.
Articles 4, 5, and 6 stipulate, in general terms, that American vessels
and their cargoes shall not be subject to any higher charges or duties
than are paid by the vessels and cargoes of any nation whatsoever.
Article 6 contains the following: “Y que en ningun caso se impondrá ó
cobrará derecho diferencial en los puertos de los dos paíscs sobre los
dichos buques ó sus cargamentos,” etc, and there is no previous or
subsequent stipulation in the treaty, so far as I have been able to
discover, which either controverts or modifies that article.
In virtue of the additional contract referred to, merchandise imported
into Salvador by American vessels will be compelled to pay 3 per cent.
higher duties than will be imposed on merchandise imported by the
Central American line, of which two of the vessels will carry the
Salvadorian flag. It must be apparent to your excellency that the
possibility of such a contingency as that American vessels would ever be
subject to higher duties than those of any other nationality while the
treaty remained in force was not contemplated by its framers.
The practical effect of the contract, if carried out, can not be
otherwise than to exclude American vessels from the import trade of
Salvador, even when coming from their own port of San Francisco, and to
compel American shippers to make use of the so-called Spanish Central
American line in order to enjoy the rebate in duties, and your
excellency may not be aware that this rebate in very many cases will
exceed the current rates of freight by any of the established lines of
steamers which now touch at the ports of this Republic.
I am authorized by my Government further to say that the proposed
alterations of the national customs tariff, for the benefit of a special
enterprise, overpass all legitimate limits of subsidies to vessels, and
operate to destroy the American shipping interests which have been built
up in good faith and the faith of treaties, and that the differential
duties it is proposed to establish to the prejudice of those interests
call for an urgent protest. Should its representations be insufficient,
my Government will be compelled to recommend to the Congress of the
United States the adoption of some legislation which will effectually
protect those interests, and if such legislation should result in the
imposition of differential duties upon all cargo imported into the
United States by the Spanish Central American line of steamers the
Government of Salvador will surely have no just cause to complain.
But, to avoid such retaliatory measures, I beg leave respectfully to
suggest that your excellency’s Government should concede by decree to
all American vessels arriving at the ports of Salvador the same rebate
in duties which has been accorded to the Spanish American line. Such a
resolution would be a compliance with treaty stipulations, and would
obviate further controversy.
1 trust these observations will be received in the same friendly spirit
in which they are offered, and in the interest of the cordial relations
that have always existed between the United States and Salvador.
I have, etc.,
[Inclosure 2 in No.
697.—Translation.]
Señor Delgado to
Mr. Hall.
Department of Foreign Relations of Salvador,
Ban Salvador, August 15, 1887.
Mr. Minister: I have had the honor to receive
your esteemed note, dated the 10th instant, containing some observations
in regard to the additional contract made on the 14th June last between
this Government and the agent of the Marquis de Campo, which, in the
opinion of your excellency, is contrary to the treaty with the United
States in force, in the part which concedes to the line of Spanish
Central American steamers an eventual subvention, consisting of a rebate
in the duties upon imports.
[Page 140]
I have informed the President in regard to your esteemed dispatch, to
which I refer, and he has instructed me to say in reply that my
Government finds the reasons set forth therein very just, and that in
his constant desire to maintain unaltered the friendly relations that
happily it cultivates with the Government of the United States he has
determined that through the ministry, to which the matter pertains, the
necessary measures shall be dictated with the view of avoiding the
objections pointed out by your excellency.
Thus assuring your excellency that through the ministry of public works
(fomento) a decree in consonance with the
final part of your mentioned note will be issued, it affords me, great
gratification to renew, etc.
