No. 430.
Mr. Bayard
to Mr. Manning.
Department
of State,
Washington, February 10,
1887.
No. 47.]
Sir: I inclose for your information, in connection
with previous correspondence, a copy of a letter from Messrs. Alexandre
& Sons, dated New York, the 18th ultimo, with its accompaniments,
relative to the rebate of 2 per cent. of customs duties said to be granted
by the Government of Mexico on the goods imported at Progreso and Vera Cruz
in vessels of the Spanish Transatlantic Company. Messrs. Alexandre &
Sons contend that this action of Mexico is a manifest discrimination against
American vessels, and ruinous to their carrying trade.
These papers afford the Department an insight of the situation, but at the
same time all doubts are not dispelled as to the interpretation placed upon
the contract with Mexico, which gives rise to the present complaint.
Therefore a particular reference to two articles of the contract, viz, 3 and
9, to ascertain their relationship to each other becomes necessary.
Article 3 reads as follows:
In order to promote the commerce of the Mexican Republic, the Spanish
Transatlantic Company shall pay at the custom-house of Vera Cruz and
that of Progreso, for importers, 2 per cent. of the customs duties
payable on their goods, this amount being deducted from the subsidy
to be received by the company through said custom-houses.
Article 9 says:
The Government shall grant a subsidy of $5,000, in Mexican silver, to
the Spanish Transatlantic Company for each round trip by its vessels
between Havana, Progreso, and Vera Cruz, in connection with its
lines; it shall also grant to the company 2 per cent. of the customs
duties payable on the goods carried by its steamers, provided that
such duties amount for the trip to the sum of at least $50,000.
[Page 685]
The question to be considered is, does Article 3 amount to an unconditional
bounty of 2 per cent. of the duties in favor of importers by the Spanish
transatlantic line, in addition to the subsidy of 2 per cent. granted by
Article 9, under its expressed condition, to the company; or is the company
to pay “for importers” the duty of 2 per cent., as
required by Article 3, out of the $5,000 subsidy in any event on each round
trip and in case the trips do not yield at least $50,000 of customs duties,
so that the additional 2 per cent. granted by Article 9 can be claimed, is
the line to receive its $5,000, less the deduction of 2-per cent. paid “for
importers?”
In order that the Department may be in a position to treat the question
understandingly, it is desired that you address yourself to Mr. Mariscal, in
continuation of your previous inquiries, and especially in view of this
instruction and the information now before you, and ask to be given the
official interpretation placed upon the concession to the Spanish
transatlantic line by the Mexican Government, as well as any other facts
which will enable the Department to arrive at a correct and just conclusion,
and which he may be willing to furnish.
One other point may illustrate the confusion that appears to surround the
subject. Does the 2 per cent. of customs duties which Article 3 says the
steamship company shall pay “for importers” apply to
importers in Mexico? Ordinarily this would seem to be the correct
interpretation, but according to a letter from Messrs. G. Amsinck & Co.,
transmitted hither by Messrs. Alexandre & Sons, the shippers of goods
from this country enjoy the privilege for importers,
when forwarding their merchandise by the Spanish Transatlantic Company’s
vessels. The phrase “shall pay for importers” (pagara por los importadores) is vague. If the company
is to pay under any circumstances g per cent. for the benefit of the
importers and run its chance of reimbursement, if the duties collected on a
single cargo exceed $50,000, it is not easy to evolve the idea of a subsidy to the company for which Mr. Mariscal
contends. A bounty to importers appears to be
involved, and this would imply a discrimination, as to the goods, not within
the usual limits of a maritime subsidy and at variance with international
comity.
I am, etc.,
[Inclosure 1 in No. 47.]
Messrs. Alexandre &
Sons to Mr. Bayard.
New
York, January 18,
1887.
Sir: We are in receipt of your favor of 28th
ultimo, from which we withdrew translation of Mr. Mariscal’s reply of
11th ultimo to Mr. Manning’s letter of 6th ultimo on the subject of the
2 per cent. rebate of duties granted by the Mexican Government on goods
imported into the ports of Progreso and Vera Cruz.
We note your remarks that in your opinion the facts, so far as presented
to you, do not present the appearance that the rebate in customs is in
favor of the importers of dutiable goods. To this we beg to differ, as
the extracts of the contract of the Spanish line with the Mexican
Government, and the letters of some of our principal exporters here to
Mexico (which we sent you on November 18) show conclusively that such
rebate is enjoyed by dutiable goods imported by said Spanish line.
The Mexican Government may call this rebate what it pleases, or, as they
do, “in the form of a subvention,” but we think the practical deduction
is that the rebate is clearly a discrimination against American vessels
and railways, easily proven already by shippers refusing to ship by our
American steamers on account of enjoying 2 per cent. less duties on
their goods by the Spanish line.
We imagine your Department can obtain through the American minister at
Mexico an official copy of the contract, but to expedite this matter, we
beg to hand you in [Page 686] closed here
with copy of the contract, as taken by us from the Diario Official of
Mexico (which please preserve and, if possible, return to us, as it is
the only copy we have).
Every week we see a continual increase in the business of the Spanish
line, and consequently the same decrease in ours. If this continues much
longer, we see no alternative but that we will be forced to suspend our
line to Mexico.
As a strong proof of our assertions, and the manifest injury to American
vessels, we beg to hand you letter of 17th instant from those very
important merchants in this city Messrs. G, Amsinck & Co., who
advise us that they can not ship goods to Vera Cruz by our line on
account of the discriminating duty of 2 per cent. enjoyed by the Spanish
line.
As therein stated, you will notice that oh December 22 last, by our
steamer City of Puebla, we engaged from them a
lot of 16 cases calicoes, and to secure it we carried it at 50 per cent.
less freight than the rate charged by the Spanish line; and yet you will
notice by the claim sent in by them that even that was $13,30 more than
what the goods would have cost them if sent by Spanish line, showing
that American vessels must take off 78 per cent. of what Spanish line
obtains. Now, if this is not discrimination we fail to see it. With all
these facts at hand we think we have a right to ask if this state of
affairs is to continue, We suggest that we may have an interview with
you at your convenience.
Your early reply will oblige,
Yours, truly,
[Inclosure 2 in No. 47.]
Messrs. Amsinck & Co.
to Messrs. Alexandre &
Sons.
New
York, January 17,
1887.
Gentlemen: We beg to hand you the inclosed
memorandum, received from the consignee of the sixteen cases dry goods
shipped by us to Vera Cruz per City of Puebla, on
December 22, whereby you will see that despite your concession of 50 per
cent. on the rate of freight to meet the 2 per cent. rebate on the
duties granted by the Mexican Government on goods shipped by the Spanish
flag, there is yet a charge of $13.30 made to us, for which we expect
you to hand us your check, the said rebate on the duties amounting to 75
per cent. the amount of the freight, instead of the 50 per cent. you
allowed us on the supposition that it would suffice to counterbalance
it. As our instructions are to ship by the flag that obtains the
reduction of 2 per cent. on the duties, we are obliged, to our regret,
to discontinue shipping to Mexico by your line, unless you reduce your
rates of freight to about one-fourth the amount charged by the Spanish
line, the 2 per cent. rebate on the duties by the latter amounting to
fully 75 per cent. of the freight charges.
Yours, truly,
G. Amsinck & Co.
[Inclosure 3 in No.
47.—Translation.]
Debit note. Messrs. G. Amsinck & Co., in account
with Frou Co.
| Difference in the shipping of sixteen cases
prints: |
|
|
Freight per Spanish line |
$56.23 |
|
Freight per American line |
28.56 |
|
|
Difference value, New York |
27.67 |
|
Exchange, 28 per cent |
7.55 |
|
|
Mexican value |
35.22 |
| Duties: |
|
|
30,603 yards, 24/25=17,141 ms., at 15 cents |
2,612.10 |
|
Duties of flag, 2 per cent |
52.24 |
|
Mexican value |
35.22 |
|
|
Difference Mexican value |
17.02 |
|
Value in New York, at 28 per cent |
13.30 |
[Page 687]
[Inclosure 4 in No. 47.]
Department of Public Works, First
Section.
Contract concluded between the Citizen-General Carlos Pacheco, secretary
of public works, colonization, industry, and commerce of the United
States of Mexico, representing the Executive of the Union, and the
Spanish Transatlantic Company, represented by Mr. Carlos Calderon, for
the establishment of lines of steamers between the United States of
Mexico, the United States of America, and Europe.
obligations of the company.
Article 1. The Spanish Transatlantic Company
binds itself to cause those of its steamers which sail from Europe to
Havana to make regular trips to Vera Cruz, stopping at Progreso, three
times a month, thus putting the Mexican Republic in direct communication
with all the j)orts of the five parts of the world where its different
lines now touch, its first trip from Europe to be made during the first
ten days of October next, and its first trip from the United States
during the first ten days of November next, or sooner if the company
shall prefer.
Art. 2. The company binds itself to establish a
line from Havana to New York, making sure connection with steamers
coming from Europe, so that connection may be made between New York,
Progreso, and Vera Cruz, as also with the other ports, three trips to be
made each month.
Art. 3. In order to promote the commerce of the
Mexican Republic, the Spanish Transatlantic Company shall pay at the
custom-house at Vera Cruz and that of Progreso, for importers, 2 per
cent. of the customs duties payable on their goods, this amount being
deducted from the subsidy to be received by the company through said
custom-houses.
Art. 4. Public and official communications sent
by the Mexican Republic, and communications of the same character
addressed to the governmental authorities of the Republic, from any port
in which the mail steamers of the Spanish Transatlantic Company may
stop, shall be carried by them without their receiving any compensation
for this service while the filling of the mail-bags and the distribution
of their contents shall be under their charge.
- (A)
- The captains of these mail steamers shall collect the
correspondence of the respective post-offices, shall keep it in the
form in which they receive it, and shall deliver it at the
post-office to which it is addressed. They shall take charge of
registered correspondence in their own name, signing a receipt
therefor at the sending office, and delivering it in the port of its
destination with the same formality.
- (B)
- When the Government shall see fit, it shall send its
correspondence to Havana and New York by a special messenger, the
company binding itself to provide him with quarters in the first
cabin, without receiving any compensation therefor, it being
understood that the cabin assigned to him shall possess all the
conveniences required by the service, that he shall have it all to
himself, and that he shall have his meals at the same table with the
officers, both at sea and on land.
Art. 5. The company shall give lodging and
board, both at sea and in port, at the officers’ table, to an apprentice
to the Mexican merchant service, on all the mail steamers of their
different lines, until, in the opinion of the proper captain, each one
of them is able to pass an examination as third mate tor navigation in
all waters.
- (A)
- These apprentices shall be in all respects subject to the special
regulations for those of their class, of the company, copies of
which shall be sent to the supreme Government for its
information.
- (B)
- The company shall also have charge of the instruction of these
apprentices, the Mexican Government being obliged to pay nothing
more than the salary allowed them for performing their other
duties.
Art. 6. While the, present contract is in
force, the rates for carrying freight and passengers shall be as
follows:
- (A)
- The maximum rate between New York, Havana, Progreso, and Vera
Cruz shall be 10 per cent. less than those now charged by the
line of F. Alexandre & Sons, which have been approved by the
Federal Government.
- (B)
- For other lines the maximum shall be that of the last rates
established by the Mexican Transatlantic Company, but those of
the Spanish Transatlantic Company shall be charged if they are
more favorable.
- (C)
- On domestic products that are exported a reduction shall be
made in the freight of 30 per cent. below the rates for
importation mentioned in the foregoing paragraph.
- (D)
- On minerals and marble, when exported, there shall be a
reduction in freight of 30 per cent. below the same rates for
importation.
- (E)
- On domestic goods exported in the extra vessels mentioned in
paragraph A, Article 9, a reduction in freight shall be made of
40 per cent. below the same import rates.
- (F)
- On minerals and marble exported in the same vessels, there
shall be a reduction of 50 per cent. below the same rates for
importation.
- (G)
- When the Government permits the steamers of this line to carry
Mexican goods from Vera Cruz to the peninsula of Yucatan, such
goods shall be considered as exports, as regards the payment of
freight.
- (H)
- Public functionaries and civil and military officers, when
traveling on official business, shall pay, by the New York line,
one-third of the price of the passage according to the table of
rates, and by the other lines of the company one-half-of the
price of passage according to the same table.
- (I)
- For troops conveyed by the company from Vera Cruz to Yucatan,
and vice versa, the Government shall pay
one-fourth less than it now pays to the line of F. Alexandre
& Sons.
- (J)
- On freight belonging to the Federal Government, one-third of
the schedule rates shall be paid on all the company’s
lines.
Art. 7. Orders relative to the goods referred
to in the last three paragraphs shall be issued by the proper
governmental department to the company’s agent at this capital.
Art. 8. The company shall, at stated times,
furnish information to the Government concerning its rates, and whenever
any change shall be made therein, it being understood that when an
increase in the rates is made, without exceeding in any case the
exceptions made in paragraphs A and B, of Article 5, of this contract,
such increase shall not take effect in less than two months after it has
been publicly announced.
obligations of the
government.
Art. 9. The Government shall grant a subsidy of $5,000 in Mexican silver
to the Spanish Transatlantic Company, for each round trip made by its
vessels between Havana, Progreso, and Vera Cruz, in connection with its
lines; it shall also grant to the company 2 per cent. of the customs
duties payable on the goods carried by its steamers, provided that such
duties amount for the trip to the sum of at least $50,000.
- (A)
- Such extra vessels as the company may see fit to send to Progreso
and Vera Cruz shall receive as a subsidy only the 2 per cent.
mentioned in the concluding portion of the foregoing article, and
they shall be obliged to carry exports of all kinds, according to
the provisions of paragraphs E and F of the fifth article of this
contract, provided that the duties payable on the goods imported by
these vessels amount to the sum of at least $25,000.
- (B)
- All these steamers, together with such as the company may use for
transportation of coal, shall be exempt, in the ports of the
Republic in which they may touch, from the established duties,
excepting pilotage.
- (C)
- The subsidy, together with the official freights and pasages,
shall be liquidated and paid every month by the custom-house at Vera
Cruz to the agent of the company.
If in any month the balance in its favor shall not be paid to it, it
shall have the right to carry merchandise on its own account, and the
duties payable thereon shall be credited to it.
Art. 10. If the company shall desire to
establish a dock-yard for building and repairing vessels, it shall apply
to the war department for its approval; and when that approval is
granted, the said department shall cede to it, on the coast, public
lands suitable for such dock-yard. In this case the company shall
furnish a list of the articles which it needs for the construction of
the said dock-yard, so that the treasury department, and that of public
works, after making such restrictions and limitations as they may think
proper, may permit the free importation of said articles.
If it shall not establish the dock-yard the company shall pay the usual
duties on the goods that it shall have imported for that purpose.
Art. 11. Vessels belonging to the nation shall
be repaired at the dock-yard mentioned in the foregoing article at cost
prices.
Art. 12. Whenever the aforesaid company may
think proper to keep a pontoon anchored in the port of Vera Cruz, as a
place of deposit for Mexican articles of export useful for the needs of
the company’s steamers, and also as a place of deposit for coal, it
shall be freely allowed to do so by the Government, and the treasury
department shall issue such orders as it may think proper for the
protection of the revenue, which orders shall be faithfully obeyed by
the company.
fines.
Art. 14. In case of the failure of any vessel
to make one of its regular trips, the company shall lose the subsidy
which it would otherwise receive for such trip. It shall, moreover, be
liable to a fine of $1,000.
[Page 689]
- (A)
- A delay of more than three and less than six days in reaching Vera
Cruz shall render the company liable to a fine of $100 per day, and
if the delay amounts to more than six and less than ten days, the
company shall lose one-half the subsidy.
- (B)
- These lines shall always be deducted from the subsidies payable by
the custom-house at Vera Cruz, and shall be imposed by the proper
governmental department only.
- (C)
- Cases of vis major, when proper proof
thereof is furnished, shall be excepted.
duration of the contract.
Art. 15. This contract shall last for five
years, but if no formal notice of a desire for the cessation of its
effects be given before the expiration of the fourth year it shall be
understood to be extended for five years longer, and thus successively
for periods of five years unless formal notice of a desire for the
cessation of its effects be given before the expiration of the fourth
year of each period.
security.
Art. 16. On the first day of October next, or
sooner, if the company shall prefer, the latter shall make in the
general treasury of the Federation a deposit of $50,000, in recognized
bonds of the public debt, which amount it shall forfeit for the benefit
of the nation in any of the cases entailing forfeiture hereinafter
provided for.
transfer of this concession.
Art. 17. This contract shall not be transferred
to any company or individual without the previous approval of the
Government of Mexico.
Art. 18. If the transfer shall be made to any
foreign Government or to any agent of such Government, such transfer
shall be wholly null and void, in addition to which the company shall
forfeit any sums that it may be entitled to collect from the Government;
it shall also forfeit its dock-yard, its pontoon, any goods that it may
have in the Republic, and its depository.
cases entailing forfeiture.
Art. 19. This contract shall be forfeited—
- (A)
- If trips by the European line shall not be commenced during
the first ten days of October next.
- (B)
- If trips by the United States line shall not be commenced
during the first ten days of November next.
- (C)
- If three consecutive trips shall not be made in a month, or
nine, not consecutive, in a year, between the ports of Havana
and Vera Cruz, and likewise from New York to Havana.
- (D)
- In case of the transfer of this contract to a company or
individual without the previous consent of the
Government.
Art. 20. The forfeiture shall be declared by
the Executive after an audience with the company, to which a term of two
months shall be granted, to enable it to state such grounds as it may
have in its favor, before the declaration of the forfeiture.
Art. 21. Fortuitous cases, or those of vis major and quarantine, of which proper proof
is presented, shall be excepted.
sundry clauses.
Art. 22. The Spanish Transatlantic Company
shall be duly represented at this capital by an attorney.
Art. 23. Differences growing out of a failure
to abide by the clauses of this contract, on the part of either of the
contracting parties, shall be decided by the courts of the Republic.
provisional articles.
One-half of the expense of the stamps required by this contract shall be
defrayed by each of the contracting parties.
City of Mexico, August 21,
1886.
Carlos
Pactieco,
(Flourish.)
For the Spanish Transatlantic Company:
Carlos
Calderon,
(Flourish.)
