No. 419.
Mr. Bayard to Mr. Manning.

No. 19.]

Sir: I send herewith for your information a letter addressed to me by Messrs. F. Alexandre & Sons, of New York, complaining of a discrimination in the form of an alleged rebate of 2 per cent. of custom duties in favor of the importers of goods into Mexico from the United States, by the recently established Spanish transatlantic line of steamers.

The matter had been previously brought to the attention of the Department. From what could then be learned it did not appear that a discriminating favor of 2 per cent. rebate of duties was to be accorded to the goods for the benefit of the importers thereof; but that the company was to be paid a sum equivalent to 2 per cent. of the duties collectable on the foreign goods carried in its steamers to Mexican ports, such payment being in part satisfaction of the subsidy stipulated under its contract of August 21, 1886, with the Government of Mexico. The extracts from that contract furnished to me by Messrs. Alexandre & Sons seem to bear out this understanding of the arrangement Indeed any other is incompatible with the proviso of Article 9, that the company is to receive no payment on account of customs duties unless the total duties collected upon goods imported by its steamers shall amount to at least $50,000 each trip.

Nevertheless it is distinctly averred that there is practically a discrimination of 2 per cent. in the duties collected from the importers by that line, as appears from the letters addressed to Messrs. F. Alexandre & Sons by such houses as Maitland, Phelps & Co., H. Marquardt & Co., and M. Ecbeverria & Co.

It is desired that you will ascertain the precise nature of the arrangement made by Mexico with the Spanish line in respect of the 2 per cent. of customs duties; and if it shall appear that there is, in fact, a discrimination, and that less duties are levied and collected by the Mexican treasury from the importers of the merchandise carried by the Spanish line, you will take an early occasion to impress upon Señor Mariscal the unfriendly character of a measure which strikes directly at the American carrying trade with Mexico.

It is not a question of right under treaty or international law, but of the necessary effect of measures which, whether inimically designed or not, are distinctly hostile in their operation to the shipping interests of the United States. The Government of Mexico cannot fail to be aware of the earnest desire of the United States to increase friendly and intimate relationship with that Republic.

By the provisions of the shipping acts of 1884 and 1886 marked favors in the interest of neighborhood have been shown. For instance, all vessels [Page 669] bringing goods from Mexican ports, under whatever flag, are entitled to a considerable reduction of tonnage dues in our ports. It was not intended, and could scarcely be permitted, that this neighborly step on our part should be made use of to injure, if not destroy, the carrying trade of the United States, and exclude it from sharing in the enlarged intercourse which our legislation has created. It would be most unfortunate were our efforts toward impartial traffic with our neighbors to prove a failure and demand legislative change.

If such a conviction were to be forced upon the national legislature, it could not fail injuriously to affect the many opportunities which are continually presenting themselves for the development of our neighborly relations with Mexico. An adverse impression once created is not easily dispelled, and no one can be more interested in preventing any erroneous conception in this regard than the statesman in whose hands the foreign intercourse of Mexico rests, for Señor Mariscal has long resided in the United States and knows their true feeling toward Mexico.

I trust, therefore, you will receive from Señor Mariscal satisfactory explanation in relation to the subject.

For your farther information copies of Messrs. Alexandre’s first letter to me on the subject and of my reply of November 10 are inclosed. You will probably find the full text of the Spanish transatlantic contract in the official journal of Mexico.

I am, etc.,

T. F. Bayard.
[Inclosure 1 in No. 19.]

Messrs. Alexandre & Sons to Mr. Bayard.

Sir: We beg to call your attention that the discrimination by the Mexican Government on goods imported into Mexican Gulf ports of Progreso and Vera Cruz against American and other flags, but in favor of a certain line of steamers sailing from New-York every ten days to above ports, is causing ours and other American vessels great injury.

The discrimination amounts to 2 per cent. less duty ex Spanish steamers. Are we not right in thinking that we may expect some relief from our Government in this question? If you desire it, we will go on to see you on this. Respectfully,

F. Alexandre & Sons.
[Inclosure 2 in No. 19.]

Mr. Bayard to Messrs. Alexandre & Sons.

Gentlemen: I have received your letter of the 4th instant in relation to an alleged discrimination by the Mexican Government on goods imported into the Mexican Gulf ports of Progreso and Vera, Cruz, against American and other flags, and in favor of a certain Spanish line of steamers sailing from New York.

In the absence of more definite information than that contained in your letter and of a copy of the concession which has been made by the Mexican Goverment to the Spanish line in question, the Department is unable to give an opinion upon the question whether the favor shown to that line involves discrimination against the flag of the United States, and is of such a character as to call for representations to the Mexican Government.

It is believed that governments whose other resources are severely taxed or not immediately available in order to pay for special services rendered by a steamship company in the transportation of the mails and of troops and government property, [Page 670] not infrequently resort to the expedient of mortgaging the customs revenues in part satisfaction of the stipulated compensation, the purpose being to do this in such a manner as to favor a line of steamers which happens to carry a certain flag, without in fact committing any flag discrimination.

Upon the case in question, however, the Department, as at present advised, is unable to express an opinion.

I am, etc.,

T. F. Bayard.
[Inclosure 3 in No. 19.]

Messrs. Alexandre & Sons to Mr. Bayard.

Sir: We duly received your favor of 10th instant, in relation to the 2 per cent. discrimination in duties by Mexico at the ports of Progreso and Vera Cruz on goods imported ex Spanish line steamers and consequently acting to the prejudice of goods ex American vessels.

We imagine from your minister at Mexico and consuls at Vera Cruz and at Progreso you will have received evidence confirming our letter of the 4th instant, but in case you have not received it, we beg to hand you clipping of Havana Boletin Comercial, wherein you will And principal points as to the discrimination complained of, viz, Articles 3 and 9.

Also, we beg to hand you letters addressed us from the well-known houses here, and shippers to Mexico, of Messrs. Maitland, Phelps & Co., Messrs. H, Marquardt & Co., Messrs. M. Echeverria & Co., confirming our statements, and showing the great injury American vessels suffer now in trade” to Mexico, and particularly our line of American steamships.

In view of the situation we and other American interests are suffering from, may we not expect some relief from our Government?


F. Alexandre & Sons.
[Inclosure 4 in No. 19.—Translation.—From the Boletin Comercial.]

the contract with the transatlantic company.

Among the documents of an official character published by the government of Mexico, we find in the Mexican press the contract concluded on the 21st of August between the ministry of public works of that Republic and the Spanish Transatlantic Company.

The following are its principal bases:

  • Article 1. The Spanish Transatlantic Company binds itself to cause to arrive at Vera Cruz, after touching at Progreso, three times a month, its steamers, which, coming from Europe, run to Havana periodically, thus putting the Mexican Republic in direct communication with all the ports of the five quarters of the globe, with which its diverse lines at present ply. Its first voyage from Europe shall take place in the first ten days of October next, and the first voyage from the United States in the first ten days of November next, or sooner it practicable.
  • Art. 2. The company binds itself to establish a line from Havana to New York, in close connection with the steamers coming from Europe, so as to combine with the service between New York, Progreso, and Vera Cruz, as it is already combined in the other ports, making likewise three voyages monthly.
  • Art. 3. In order to develop the commerce of the Mexican Republic, it will pay to the Spanish Transatlantic Company, in the custom-houses of Vera Cruz and Progreso, by the importers, 2 per cent. of the customs duties levied upon their goods, this amount being discounted from the subvention which the company is to receive from those custom-houses.

* * * * * * *

  • Art. 6. Daring the existence of this present contract the tariffs for freight and passengers shall be as follows:
    The maximum between New York, Havana, Progreso, and Vera Cruz shall be 10 per cent. less than that fixed by the company of F. Alexandre & Sons, as approved by the Federal Government.
    For the other lines the maximum shall be the same as the last tariffs issued by the Mexican Transatlantic Company, but those of i the Spanish Transatlantic Company shall be adhered to if they be found more favorable.
    National goods exported shall enjoy a reduction of freightage to the amount of 30 per cent. of the incoming freight tariffs to which the fore going paragraph relates.
    National goods exported in the extra steamers, of which paragraph A of Article 9 speaks, shall enjoy a reduction of freightage to the amount of 40 per cent. of the aforesaid tariff of incoming freight.
    Minerals and marbles exported in the said steamers are to have a reduction of 50 per cent. from the aforesaid tariff of incoming freight.
    When the Government permits the vessels of this line to carry national goods from Vera Cruz to the Peninsula of Yucatan such goods shall be regarded as if exported for the collection of freightage.
  • Art. 8. The company will give notice, from time to time, of its tariffs, and always whenever any change shall be made therein, with the understanding that whenever the change shall be an increase—but in no case, however, in excess of the provisions of paragraphs A and B of Article 5 of this contract—it shall not take effect until two months after being published.
  • Art. 9. The Government will subvention the company with the sum of five thousand pesos fuertes in Mexican silver for each round trip made by its vessels between Havana, Progreso, and Vera Cruz, in connection with its lines, and with 2 per cent. of the customs duties levied upon the goods carried in its steamers; provided that such duties shall amount to at least $50,000 on each voyage.

[Inclosure 5 in No. 19.]

Messrs. Maitland, Phelps & Co. to Messrs. F. Alexandre & Sons.

Dear Sirs: In reply to your favor of the 12th instant we beg leave to say that we have received instructions to ship goods to Vera Cruz by the Spanish steamers on account of the reduction of 2 per cent. in the duties on goods imported into Mexico by that line.

We are, etc.,

Maitland, Phelps & Co.
[Inclosure 6 in No. 19.]

Messrs. Marquardt & Co. to Messrs. Alexandre & Sons.

Dear Sirs: We beg to inform you, in reply to your solicitations for freight by your line of steamers for Vera Cruz (Mexico), that we have positive order from our correspondents in Mexico to ship only by the steamers of the new Spanish line called the “Compafña Transatlantic a Españala.”

Below we give you extract from letters of our friends in Mexico giving their reason for insisting on shipment per Spanish steamers.

We are, etc.,

H. Marquardt & Co.

October 1, 1886, Messrs. F, Formento and Co., Sens., Vera Cruz, write: “All our orders we request you to ship in Spanish steamers, as such goods are entitled to a rebate of 2 per cent. on duties of importation,”

October 8, 1886, Messrs. Zaldo Hermanos & Co., Vera Cruz, write: “We wish all our goods to come by the new Spanish steamer line, formerly the ‘Lopez Company, because we enjoy the benefit of 2 per cent. on duties of importation.”

[Inclosure 7 in No. 19.]

Messrs. Echeverria & Co. to Messrs. Alexandre & Sons.

Dear Sirs: Complying with your request, we send you the following translation of extract of letter of October last from one of our friends in Mexico City, referring to order for goods therewith:

These goods I wish shipped by Spanish steamer, on account of rebate of 2 per cent. differential duty j but if freight by the Alexandre line is cheaper by more than that [Page 672] difference, you will proceed accordingly; though I presume the Spanish line; has fixed its tariff, if not lower, at least on a level with Alexandre’s. The latter has collected from our merchants 2f cents per pound through to Mexico; but if the freight be not fixed through to this place, we have to pay the forwarding and at the rate of $45 per ton from Vera Cruz.”

Yours, very truly,

M. Echeverria & Co.