to Mr. Curry.
Washington, February 28, 1888.
Sir: Referring to previous instructions which have been sent to you from time to time in regard to discriminations said to be still practiced against American vessels in the Spanish West Indies, I now desire to call your attention to some general considerations in regard to this subject.
From the time of the signature of the provisional commercial agreement of January 2 and February 14, 1884, until now, and notwithstanding the successive changes introduced in that modus vivendi by the agreements signed October 27, 1885, and September, 1887, and which were designed to remove discriminations that had become noticeable in the practical working of the measure, it has been repeatedly represented to this Department, on behalf of American ship-owners, that a residual discrimination exists in the treatment of American steamers plying between the United States and ports of the island of Cuba and Spanish steamers making the same trips as an incident of a round-trip voyage from a peninsular port.
By an instruction (No. 311, of October 25, 1887) the consul-general of the United States was made acquainted with the precise statements in this regard, made by Messrs. James E. Ward & Co., agents for the New York and Cuba Mail Steam-ship Company, and directed to investigate the matter thoroughly and conclusively.
The report of Consul-General Williams makes it quite clear that, while the Government of the United States is, under the existing commercial agreement, exempting Spanish vessels in the ports of the United States, when coming from the Antilles, from all discriminating duties, on the assurance that our vessels in Antillean ports are treated on the basis of perfect equality, the Spanish rule, in point of fact, gives to the steam-vessels engaged in the same traffic and flying the flag of Spain, under certain conditions, a valuable exemption.
It appears from Mr. Williams’ report, and the accompanying papers, that Spanish mail-steamers or Spanish steamers making regular trips from Spain in less than twenty days are entirely exempt from the payment of both inward and outward tonnage dues, even when entering from or clearing to other than a Spanish port; so that a Spanish steamer coming from Spain with cargo enters a Cuban port without paying tonnage, and after discharging cargo there takes on cargo for a port of the United States and clears without payment of any tonnage dues. The same thing occurs on the return trip; the steamer leaving the United States with cargo enters a port of the island of Cuba and clears therefrom for Spain without paying any tonnage dues whatever, either inward or outward. On the other hand, a regular trading steam-ship, under the flag of the United States, entering and clearing from a Cuban port in the course of its trips from and to the United States, pays 62½ cents per ton upon the net register tonnage when the inward and outward cargo jointly exceed the net register.
With the treatment by Spain of its vessels engaged in trade between Spanish ports this Government has as little concern as Spain could have in regard to the treatment of vessels of the United States, and this wholly irrespective of any incidental foreign voyage which may be made in the course of a round trip. But it is unquestionable that, to [Page 1436]insure a real equality of treatment, an American and a Spanish vessel, making the voyage side by side between a port of the United States and a port in Cuba, must be treated alike at each end of the voyage. In other words, the particular voyage, or part of a general round voyage, in which the two flags come into competition, is that which the agreement between the two countries aims to equalize, and as to this voyage no inequality or discrimination can be introduced because of any other voyage or voyages whatsoever not coming within the purview of the international agreement.
It would appear that the Spanish treatment of the steam-ships of Spain, exempting them from all tonnage dues when clearing for or arriving from a port of the United States en route from or to the Peninsula, is based upon the interpretation given to article 5 of the existing customs tariff of the island of Cuba, which reads as follows:
Art. 5. Steamers nationalized in Spain and making regular trips between this island and the ports of the Peninsula and Puerto Rico, not belonging to the subsidized lines, are exempt from tonnage dues. To enjoy this benefit the duration of the regular trips must not exceed twenty days from the port of Havana to those of the Peninsula, and vice versa, and four days from Puerto Rico, respectively; a periodic trip being understood as one performed at least once a month, from which is to he discounted the time consumed in touching at intermediate ports.
It is not apparent how this article can be applied to work the discrimination to which attention is now invited, unless in the assumption that the voyage of the Spanish steamer is made to a port of the United States as an intermediate port of call between Havana and the Spanish Peninsula (and with deduction of the time the voyage is lengthened by reason of such digression), or in the still more violent assumption that the excursion is made from Havana to the United States and back to Havana without interfering with the periodicity or computed duration of the trip between the Peninsula and Havana.
The fallacy of the latter assumption needs no argument for its demonstration, since any such to-and-fro excursion to a foreign port from Havana can never be to a point intermediate on the journey between Havana and the Peninsula. Such an excursion must be regarded as wholly complete by itself, and without the slightest regard to any prior or subsequent condition growing out of the engagement of the vessel in the domestic carrying trade between Spanish ports. The total exemption of a vessel making such an excursion from payment of dues, which must be paid by a vessel of the United States making a similar voyage side by side with its Spanish competitor, is so palpable a contravention of the condition of “perfect equality” stipulated by the agreement, that it is not believed possible to explain or justify it.
The first assumption, however, merits more extended notice. It would even cover the case of a somewhat numerous class of steam-vessels which has grown up within the last decade or two, and to which the name of “ocean tramps” has been applied. A steam-ship of this class, under the assumption that intermediate foreign calls are to be deducted from the time allowed, might, after leaving a peninsular port, rove about at will from one foreign port to another, and yet, if at any time touching at Havana before returning to Spain, would have the privilege of free entry and free clearance at Havana. That this is incompatible with the stipulated “perfect equality” of treatment with a vessel of the United States is self-apparent, for the Spanish steamer receives, for that particular section of her general voyage lying between Havana and any port of the United States, a favor which is withheld from an American steamer, and which is never at any time before or [Page 1437]after equalized by any dues levied under Spanish law or any favor accruing under Spanish regulation to the American steamer.
Besides the question thus stated, which relates to Spanish steamers, not regularly subsidized, but making so-called periodical monthly trips between Havana and the Peninsula, the report of the consul-general at Havana shows conclusively that two other discriminations exist in respect of United States vessels engaged in the Antillean trade.
A Spanish sailing vessel arriving in Cuba from another Spanish port pays per ton on inward cargo 37½ cents, and on outward cargo on clearing for the United States 25 cents per ton. A vessel of the United States pays on the combined inward and outward cargo $1.35 per ton, or at the rate of 67½ cents each way.
Here again is an illustration of the illogical policy of favoring a Spanish vessel setting out on a foreign voyage because of a prior voyage in the reserved domestic trade; for it is clear that if the American and Spanish ships set out side by side from an Antillean port towards an American port, the 25 cents per ton paid by the Spanish ship is considerably less than the share of the total tonnage dues paid by the American corresponding to the outward part of her voyage, viz: 67½ cents. This is not balanced by any differential treatment on the return voyage from the United States to the Antilles, for the total outward and inward dues of such a Spanish vessel in respect of her excursion to and from a port of the United States does not amount to the $1.35 paid by an American vessel for inward and outward tonnage dues on a similar round voyage.
Again, a Spanish vessel arriving in Cuba in ballast from Puerto Rico, pays, on clearing with cargo for a port of the United States, dues to the amount of only 25 cents per ton; whereas an American vessel entering a port of Cuba in ballast and clearing to make the same voyage as the Spanish vessel must pay 62½ cents per ton.
There may be other instances of discrimination than those mentioned in Mr. Williams’s report, and, from the circumstance that they all arise in the case of vessels coming to Cuba from another Spanish port, it is probable that in other instances also an analogous favor, springing from the prior domestic voyage of a vessel, follows her in her outward voyage to a foreign port, which is not subsequently made up by any differential Spanish impost, and which operates as an actual discrimination for that outward foreign voyage against a vessel of the United States making the same voyage side by side with its Spanish rival.
The matter is one of considerable importance, inasmuch as the continuance of the President’s proclamation suspending all differential duties on Spanish vessels and their cargoes in the ports of the United States is in terms dependent upon the continuance of equal treatment of American and Spanish vessels in the ports to which the proclamation relates.
Copies of the instruction of this Department to Consul-General Williams, and of his report, with their respective annexes, are herewith inclosed for your use in preparing such a full and clear presentation of this matter to the Government of Her Majesty the Queen Regent as will demonstrate the need of an actual reciprocity of equal treatment of Spanish and American vessels in the ports of the Antilles and give satisfactory proof that it does exist, in default of which proof the statutory obligation of rescinding his proclamation would rest upon the President. The form and details of such presentation are confidently left to your good judgment.
Previous instructions of the Department in relation to the general [Page 1438]subject of equality of treatment may be drawn upon to aid you in your task. You will observe that Mr. Williams’ report refers particularly to his previous dispatches, No. 340, of January 28, 1886; No. 350, of February 23, 1886; and No. 624, of April 26, 1887. Of these No. 340 was copied to you with my instruction No. 40, of February 24, 1886, and No. 350, was sent as an inclosure with my No. 614, of May 26, 1886. Copy of Mr. Williams’s No. 624 is hereto appended for your fuller information.
I am, etc.,