No. 91.
Mr. Hall to Mr. Bayard.

No. 671.]

Sir: I had the honor to transmit with my dispatch No. 652, of the 11th ultimo, a copy of a contract between the Guatemalan Government and two Spanish subjects relating to the establishment of a line of Spanish steamers between Panama and San Francisco, touching at the Pacific ports of Central America, and inviting the Department’s attention to a clause which concedes to the patrons of that line a rebate of 5 per cent. in the customs duties upon all merchandise imported into Guatemala by its vessels. I invited attention also to the fact that the rebate in many cases would exceed the present rates of freight by the existing lines of American steamers.

The same parties now propose to establish another line of steamers between New York, New Orleans, and Aspinwall, touching at the Atlantic ports of Central America. I inclose a translation of the contract, which, in the name of the Marquis de Campo, of Spain, has been offered to the Guatemalan Government. It is identical, in many respects, with the contract for the Pacific ports, and provides for the same rebate of 5 per centum on customs duties upon importations. Within the past few years a profitable and increasing trade has sprang up between the port of Livingston and New York and New Orleans, giving employment to a number of steamers and sailing vessels. The steamers usually extend their voyages to the bay islands and to the ports of Honduras. The trade is the growth solely of American enterprise, and is wholly dependent upon the United States for a market for the tropical fruit, of which the return cargoes are usually composed. With so great a discrimination against them, these vessels maybe excluded from the import trade with the Atlantic ports of Guatemala, and apparently they can only be protected by some legislation similar to the [Page 127] act of Congress of June 30, 1834, which imposed an additional tonnage duty on Spanish vessels bound to Cuba and Porto Rico.

I have invited the attention of President Barillas and his new secretary for foreign affairs to the proposed rebate, and have been assured by both that it will not be accepted.

I have, etc.,

Henry C. Hall.
  1. Not published.