No. 527.
Mr. Bayard to Mr. Phelps.

No. 895.]

Sir: Mr. White’s several dispatches reporting the progress and transmitting protocols of the proceedings of the second international conference on the sugar bounties question recently held at London, have been received and duly considered.

The question to which they relate being primarily one affecting the revenue, and therefore within the cognizance of the Secretary of the Treasury, it became necessary to communicate those dispatches and publications to that officer, calling his attention to the temporary reserve under which the protocols had been communicated, and asking his views concerning the requested adhesion of the Government of the United States to the project of a convention submitted, in season for conveying the result to Her Britannic Majesty’s Government, as desired, before the 5th of July.

A copy of Acting Secretary Thompson’s reply* is herewith inclosed, from which it will be seen that the conclusions are reached that the objects of the conference are foreign to the interests of this Government; that, in fact, no bounties are paid, either upon the exportation of imported sugar or upon the production and manufacture of sugar in the United States; that the rate of drawback which is now allowed by [Page 733] law upon the exportation of refined sugar, manufactured from imported raw sugars, is not believed to be excessive and does not constitute an indirect bounty as has been claimed; that frequent investigations have shown that the present rates of the said drawback are substantially correct and represent the duties collected on the importation of the raw material, less the legal retention of 1 per centum, and that the question as to whether any bounty or subsidy should be allowed in connection with the production, manufacture, or exportation of sugars, is one which can not be determined by the executive branch of the Government, the legislative branch having sole and exclusive jurisdiction in such matters.

These views of my colleague entirely confirm the declarations made in my telegraphic instructions to you of March 27 and April 3 last, and justify the attitude of reserve which the delegate of the United States was instructed to announce as the condition of his friendly attendance at the sittings of the second conference. They are to be taken as the matured views of the Government of the United States in the premises and as precluding the participation of the United States in the projected international agreement as a signatory of the proposed convention, or of any convention following the same lines, unless the action of the legislative branch of this Government should render such adhesion feasible.

Your discretion is trusted as to the fittest mode of conveying to Her Britannic Majesty’s Government, before the date named, an intimation of our inability to sign, for the present at least, the project in question.

I am, etc.,

T. F. Bayard
  1. Not printed herewith.