No. 474.
Mr. Bayard
to Mr. Manning.
Washington, May 31, 1887.
Sir: I have received your No. 134 of the 14th instant, transmitting the reply of the Mexican Government to your several communications touching the discrimination made in Mexican ports against the other foreign lines and in favor of a Spanish line of steamers, by a remission of 2 per cent. of the customs duties on goods shipped by that line.
The reply of the Mexican Government does not answer the complaint’ expressed in your notes, and especially in that of the 4th instant, which was written in close pursuance of your instructions.
This Department has not claimed most-favored-nation treatment of vessels of the United States in Mexican ports, because no stipulation for such treatment exists in the treaties between the two countries. Neither has any objection been made to the grant by the Mexican Government of a subvention or subsidy to the Spanish line for the special services agreed to be performed by that company. Indeed, it was expressly stated in your note to Mr. Mariscal of the 4th instant, that no complaint had been made of the grant of a subsidy to the Spanish line. Consequently the elaborate arguments presented by the Mexican Government [Page 731] on those questions do not touch the real ground of the present complaint.
The fact complained of, and which appears to be admitted in Mr. Mariscals reply, is that the Mexican Government grants a remission of 2 per cent. of the customs duties to shippers of goods by the Spanish line. It is true that by the terms of the contract the remission is made conditional upon the total duties on the cargo amounting to a certain sum, and if they fall below that sum the company is required to pay the 2 per cent. to the shippers out of its subsidy.
But in practice this condition is a matter of words rather than of substance, and the result is that the Spanish line receives and retains its subsidy, while the shippers by it obtain a remission of 2 per cent. on the duties on their merchandise.
As illustrating the mode of operation, I refer you to a copy of a letter of the 23d instant (sent to you on the 25th), from Messrs. F. Alexandre & Sons, with a copy of a blank form (translation of which is herewith inclosed*) used at the custom-house at Vera Cruz, of a receipt for a certain amount of money representing 2 per cent. of the customs duties on certain goods shipped by the Spanish line. This receipt the shipper signs, and the custom-house then receives it in payment of the duties to the amount therein named, which is the 2 per cent. in question.
It is obvious that this is not a subsidy to the steamship line, but a bounty to shippers by that line, in the form of a remission of 2 per cent. of the customs duties on their goods. You will, therefore, ask the attention of Mr. Mariscal to the misapprehension which has been betrayed as to this Government’s complaint, and express the hope that the views herein set forth will receive favorable consideration.
I am, etc.,