No. 431.
Mr. Manning to Mr. Bayard .

No. 69.]

Sir: Upon receipt of your No. 47, of the 10th instant, relative to the complaint of Messrs. F. Alexandre & Sons, of New York, I addressed a note to Sr. Mariscal, copy of which I have the honor herewith to inclose, and trust that my presentation of the matter will meet your approval.

I am, etc.,

Th. C. Manning.
[Inclosure in No. 69.]

Mr. Manning to Mr. Mariscal.

Sir: In connection with any note of December 6, last, I would most earnestly call your excellency’s attention to the complaint of Messrs, Alexandre & Sons, of New; York, touching the rebate of 2 per cent. of customs duties granted by the Government of Mexico on goods imported at Progreso and Vera Cruz, in vessels of the Spanish Transatlantic Steamship Company, alleged to be to the detriment of the complainants.

My note, as you win recall, stated that Messrs. Alexandre held that this procedure manifestly discriminated against American vessels, and further urged that, whether intentionally or not, a discrimination existed in favor of the Spanish steamers, which was not in accord with the uniformly friendly policy of the United States, as shown, for instance, by the provisions of the shipping acts of 1884 and 1886, when marked favors were shown to Mexico at the promptings of neighborhood.

Your excellency’s esteemed reply to my note, to the effect that the rebate was granted only in the form of a subvention, and that a like franchise in like circumstances might have been obtained by any other company, has not, I am free to confess, satisfied my Government, whose doubts have not been altogether dispelled as to the interpretation placed upon the contract of the Spanish company with Mexico.

The relationship of Articles 3 and 9 of that contract seem confused. By reference to Article 3 your excellency will observe that—

“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-house.”

On the other hand, Article 9 specifies that—

“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.”

Your excellency will note that distinct interpretations may be given to the above contract stipulations. Article 3 may amount to an unconditional bounty of 2 per cent. of the duties in favor of importers by that company’s steamers in addition to the subsidy of 2 per cent. granted by Article 9, under its expresss condition to the company, or the company may be called upon 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; with an additional contingency that, in case the round trips do not yield at least $50,000 of duties, so that the additional 2 per cent. granted by Article 9 can be claimed, the line may receive its $5,000, less the deduction of 2 per cent. for importers.

There is another point serving to illustrate the confusion that clouds the subject. That is, whether the 2 per cent. of customs duties, which Article 3 says the steamship company shall pay “for importers,” applies to importers in Mexico. Ordinarily this would appear to be the correct interpretation, but according to a letter received from one of the leading houses in New York City, at the office of Messrs. Alexandre & Sons, the shippers of goods from the United States enjoy the privilege “for importers” when forwarding their merchandise by the Spanish steamers.

[Page 691]

In order that the United States Government may be in a position to treat this question understandingly, I am instructed, in connection with my previous correspondence, to request that your excellency will kindly furnish me with the true interpretation placed by the Mexican Government upon the contract of the Spanish Transatlantic Steamship Company, as well as any other facts which may, in your judgment, conduce to correct and just conclusions on this matter.

I beg to protest to your excellency, etc,

Th. C. Manning.