to Mr. Manning.
Washington , February 10, 1887.
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.
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.,