No. 986.
Mr. Bayard to Mr. Curry.

No. 284.]

Sir: In continuance of instructions heretofore sent you touching the shifting interpretation in Cuba of the provisions of the modus vivendi of January and February, 1884, especially in regard to the application of third column or fourth column rates of duty on goods not actually produced in the United States, but proceeding therefrom to the island of Cuba, I transmit herewith for your information a very full and intelligent report, covering the whole ground in connection with the claim of Messrs. Calixto Lopez & Co., of New York, for the refund of the excess of duties levied at fourth-column rates instead of third-column, on a shipment of Venezuelan coffee by the Saratoga in October, 1884, received from Mr. Williams, consul-general at Havana, in reply to the Department’s call.

Among the twelve inclosures which Mr. Williams sends to give a connected review of the question, are copies of two dispatches to this Department, Nos. 177 and 220, dated respectively 15tb of May and 4th of July, 1885. These were sent to the legation at Madrid to your predecessor, Mr. Foster, with my instructions numbered 341, of May 25, and 370, of July 16, 1885. They are, however, herewith repeated, so as not to disturb the connected presentation of the matter made by Mr. Williams.

The amendments since made by the successive commercial agreements to the vague and defective modus vivendi of January and February, 1884, have, it is believed, put an end to all complaints of discriminating treatment in this regard, and it would seem equitable that cases arising before the adjustment; of the question should, as far as practicable, be decided in accordance with the principles and rules which have since been agreed upon.

You may endeavor, in the light of the present report, and by the use of such discreet and friendly argument as may appear to you practicable, to dispose of the claim of Messrs. Calixto Lopez & Co. The essential point upon which you should dwell is that the treatment of which they complain was in fact a denial to a vessel of the United States of a favor accorded to a Spanish vessel making the like voyage and carrying the like merchandise under the same conditions.

I am, etc.,

T. F. Bayard.
[Inclosure 1 in No. 284.]

Mr. Adee to Mr. Williams.

No. 238.]

Sir: I send you inclosed a copy of a letter from Messrs. Calixto Lopez & Co., dated the 13th instant, accompanied by a copy of one from the same firm dated February 14, 1885, in regard to the duties levied by the customs authorities at Havana on a shipment of Venezuelan coffee made by them on the 18th of October, 1884, from New York to Havana. They state that duty was levied on said consignment according to the fourth column instead of the third, because the coffee was not the product of the United States.

When the matter was presented to the Department in 1885 it was decided not to present it to the Spanish Government on account of the treaty negotiations then pending. The case is now referred to you for investigation and report.

I am, etc.,

Alvey A. Adee,
Second Assistant Secretary.
[Page 1453]
[Inclosure 2 in No. 284.]

Messrs. Lopez & Co. to Mr. Bayard.

Sir: We take the liberty to inclose herewith copy of a letter sent to the Hon. Frederick T. Frelinghuysen, the then Secretary of State, dated February 14, 1885. The answer given us by the Department was sent to Havana, and to the best of our recollection it said that as proceedings on the subject were being carried on with the Spanish Government it would be inexpedient to press on our claim.

The disputed interpretation of article 1 of the commercial treaty signed at Madrid in April of 1884 by representatives of the Governments of the United States and of Spain, which reads, “and all products of and articles proceeding from the United States of America will be admitted according to the third column of the tariff of the islands of Cuba and Porto Rico, etc.,” has been, we understand, decided in favor of all articles proceeding from this country and under the American flag, and if such is the case we think we are entitled to the excess of duties paid; and we respectfully apply to you for an opinion on this matter, and if justice is found on our part, to formulate a claim against the custom-house authorities of Cuba through your Department, and to this end we will furnish all the necessary documents relating to this claim.

Hoping to be honored with an answer, we are, etc.,

Calixto Lopez & Co.
[Inclosure 3 in No. 284.]

Messrs. Lopez & Co. to Mr. Bayard.

Sir: On the 18th day of October, 1884, we shipped on board the American steamship Sarotoga bound for Havana, Cuba, 286 bags of Venezuelan coffee consigned to Messrs Segundo Alvarez & Co., of that city. They inform us that the customs authorities at that port proposed at first to appraise said goods according to the third column of the tariff of that island, in accordance with the tariff regulations entered upon in March of last year between the Governments of the United States of America and Spain. But now they propose to appraise, or have already appraised, said goods according to the fourth column, on the ground that said goods were not products of the United States of America.

The difference between appraising these goods by the third or fourth column is nearly $600. Protests have been made to the authorities of that island without effect, and we now appeal to you to decide whether Venezuelan products proceeding from this country under the American flag are or not entitled to such benefit as prescribed in said tariff regulations.

An answer will greatly oblige,

Yours respectfully,

Calixto Lopez & Co.
[Inclosure 4 in No. 284.]

Mr. Williams to Mr. Rives.

No. 768.]

Sir: In compliance with the Department’s instruction No. 328, of the 26th of January last, I now beg to report as follows upon the 286 bags of Venezuelan coffee shipped in the port of New York, October, 1884, on board the American steamer Saratoga for Havana by Messrs. Calixto Lopez & Co., of that port.

This case grows out of a sudden change made by the customs authorities of this island in their original interpretation of the first modus vivendi, negotiated at Madrid on the 13th of February, 1884, between the United States and Spain for the expressed purpose of abolishing, on the part of Spain, the discriminating duties before imposed in the islands of Cuba and Porto Rico, upon the products of and articles imported from the United States, into those islands, as a corresponding compensation for the abolition on the part of the United States of the retaliatory import duties of 10 per cent, additional ad valorem [Page 1454]imposed on the products of and articles proceeding from them when imported into the United States in Spanish vessels.

This modus vivendi was authorized on the part of the United States, and ordered to go into effect on the succeeding 1st day of March of 1884, by the proclamation of President Arthur, dated the 14th of February preceding, and issued in virtue of the authority invested in him by section 4228 of the Revised Statutes of the United States.

Pursuant thereto, the customs authorities of the United States, in execution of article 2 removed the retaliatory duty of 10 per cent. ad valorem, which, since 1834, had been imposed there; under the administration of President Andrew Jackson, upon the products of and articles proceeding from the islands of Cuba and Porto Rico in Spanish vessels, thereby placing the latter, in this particular, on an equal footing with American vessels in the ports of the United States.

On the part of Spain it was likewise simultaneously enforced in this island, and in conformity with article 1, the customs authorities here began to collect import duties as therein agreed, under the third column of the Cuban tariff on all cargoes brought to this island either in American or Spanish vessels from the United States regardless of national origin. As a consequence, merchandise, the product of other countries that had been carried to the United States and entered there in bond and transshipped afterward to Cuba, paid only the same rates of tariff duties as those collected upon the natural products of the United States. This interpretation, however, was continued, as will be seen, only for a few weeks, by the customs authorities of the island.

An interrogatory addressed about the same time to the intendant-general of finance by Messrs. A. Pellon & Co., of this city, asking if merchandise imported from the United States under the English flag would enjoy the same privileges granted by the modus vivendi to that brought under the American and Spanish flags, having been decided in the affirmative by the insular Government, its enumerated privileges were likewise extended to English shipping trading between the United States and Cuba. Although it is to be supposed that the Government of the United States on negotiating this modus vivendi was actuated solely in the interest of American commerce and American shipping, still this decision of the insular Government, extending its benefits to the English flag, seems to have been in strict conformity with article 1, which stipulates only in favor of merchandise, and omits all reference to the flag of the shipping bringing it from the United States to Cuba, in notable contrast to article 2, which does positively stipulate in favor of the Spanish flag.

As soon as it was known to the merchants of this city that all merchandise to come from the United States after the 1st of March, 1884, was to pay import duties under the third instead of the fourth column of the Cuban tariff, placing thereby the import trade of Cuba from the United States upon an equality with the same trade as practiced in Spanish vessels sailing from England, France, and Germany, several importing merchants of Havana, discerning by calculation that a saving of freight would be gained by bringing their supplies from the latter-named countries via New York, instead of direct from Europe in Spanish steamers via Liverpool, as accustomed, entered into arrangements for the bringing of these goods to New York, and from thence to Havana in the “Alexander” and “Ward” lines of American steamers. For the better explanation of this particular point, I would state that Spain had always maintained differential duties in these two islands against England, as well as against the United States and all other countries, keeping thereby their import Carrying trade to the fullest practicable extent for her own vessels. Great Britain never retaliated against this measure as the United States had done, but submitted to it in the interest of her manufacturers, who supplied most of the manufactured articles consumed in Cuba and Porto Rico, leaving, as a sort of quid pro quo, the carrying of them exclusively to Spanish shipping; the only exception allowed by Spain in this particular being with respect to bulky cargo, such as coals, pig-iron, and heavy sugar-plantation machinery, which, from their nature, not being able to bear the expense of costly freight, she allowed to be brought in vessels of whatever nationality that could do it the cheapest, thereby favoring the development of the sugar-planting interests of those islands.

As a matter of course, the arrangements of Cuban merchants to import from Europe via New York began to divert freight from the Spanish steamers coming from Liverpool, and to arouse the fears of their consignees and agents both here and there, as also of their Spanish and English owners. Fault, as observed from this point of view, was at once found with the word “procedencias,” and a new interpretation was started, giving to it meaning of only comprehending the natural products of the United States, to the exclusion of the products of other countries. Liverpool as well as Havana influences were brought to bear upon the home and insular governments. At this point another Spanish interest also combined and co-operated with these influences to effect an alteration of the original interpretation by which all merchandise, irrespective of origin, coming here from the United States was admitted under the third column of the Cuban tariff. This interest was that of the circuit of trade carried on between Spain and the River [Page 1455]Plate countries, and from thence to Cuba and Porto Rico. As already explained in my dispatches to the Department, it consisted in the carrying of cheap Spanish wines in pipes and sub-multiples of pipes, raisins, olives, olive oil in jars, and some manufactured goods, exclusively in Spanish shipping from Spain, and mostly from Barcelona and Tarragona to Montevideo and Buenos Ayres, and then with the proceeds of these outward cargoes the buying of and the bringing of return cargoes of jerked beef exclusively in Spanish shipping for account of the adventure (cuenta de expedicion) for the feeding of the plantation hands and other working classes of Cuba and Porto Rico.

But this circuit of trade could only be maintained under the shelter of a high differential duty for the protection of Spanish shipping, and the handicapping thereby of foreign shipping in this transit from Uruguay and Buenos Ayres to Cuba and Porto Rico. Now the security of this Spanish trade was also menaced by the terms of article 1 of the modus vivendi, because soon after its negotiation the English tramp steamers, after taking out cargoes from Europe to the River Plate countries, began to load jerked beef for New York, where, in turn, it was unloaded and reshipped in American and English vessels for Havana and other ports of Cuba, as well as to the Island of Porto Rico. This new competition was not only badly felt by Spanish shipping, but also by the wine and olive growers and other leading industries of Spain. For, unless Spanish shipping were kept under shelter in its navigation from the River Plate to the Antilles, it could not afford to carry wines and olive oils, etc., from Spain to South America in competition with the vessels of France and Italy, carrying there the similiar products of these two countries. Hence a general combination of Spanish shipping and commercial interests was brought to bear to bring about an alteration in the construction and interpretation of said article 1 of the modus vivendi of the 13th of February, 1884. And these efforts having been finally successful, the newly inaugurated branches of business for the bringing of European merchandise and South American jerked beef to Cuba in foreign vessels via New York, as a consequence, reverted to their former Spanish channels of transportation. This change naturally brought about a great deal of confusion in the business of those who had ordered goods from Europe and jerked beef from South America via New York, because the higher duties of the fourth column of the Cuban tariff were exacted here on their entry. Complaints and remonstrances were presented to the insular government by the parties interested, principally resident Spanish merchants.

The derogation also comprehended the abolition of the extension decreed in favor of English shipping, evoked, as already stated, by the interrogatory of Messrs. A. Pellon & Co. This determination of the Spanish Government was shortly after followed by its publication in the Gazette of Havana on the 8th of May, 1885, under an explanatory royal order, dated at Madrid, on the 6th of April of that year, which I translated and forwarded to the Department with my dispatch No. 177, of the 15th of May, amplifying the latter in my other dispatch, No. 220, of July the 4th, 1885. What is exceedingly noticeable in all these proceedings is that the other party to the modus vivendi, the Government of the United States, does not appear at all to have been consulted in this change of interpretation by the Government of Spain. In consequence, it now became necessary for the entitling of merchandise imported from the United States into this island to the benefits of the duties of the third column of the Cuban tariff, as was stated in my said dispatch No. 177, that they should comply with the following conditions:

  • First. Be natural products of the United States.
  • Second. Proceed direct from there.
  • Third. And be imported direct either under the Spanish or American flag.

It was under these circumstances that the 286 bags of coffee shipped in New York by Messrs. Calixto Lopez & Co. on board the American steamer Saratoga arrived at Havana in the month of October, 1884, and were entered at the custom-house by the consignees under the third column of the Cuban tariff in accordance with article 1 of the modus vivendi of the 13th of February, 1884. But their entry was rejected under that column by the customs authorities, who instead appraised them under the fourth column of the said tariff. This action resulted in making a difference against the New York shippers of $608.11 Spanish gold plus $67.56 Spanish bank bills.

Complaint against this proceeding having been presented to this office by Mr. Manuel Lopez, a member of the snipping firm at the time here, I accordingly informed the Department of it in my dispatch No. 76 of November 7, 1884, representing the case afterwards to the governor-general of the island in a communication addressed to him on the 17th of the same month. But not having received any acknowledgment, I addressed him another, under date of the 9th of January, 1885. This second communication was answered on the 12th of the said month through the political secretary of the island. I was informed by that high insular functionary of the refusal of my petition for the collection of import duties on foreign products proceeding from the United States under the third column, or, in other words, that a discrimination in this particular was to be practiced [Page 1456]under the modus vivendi against American vessels and in favor of Spanish vessels coming from the United States.

Furthermore, it was also stated in the name of the governor-general that the 286 bags of coffee had been appraised under the fourth column of the tariff, in accordance with a decision of the insular government, made on the 31st of May previous, which declared the benefit of the third column to be limited to the products of the United States when imported direct from there under the American flag, and never to the products of other countries, though coming from the ports of the United States. This answer of the governor-general is remarkable for its authoritative manifestation of the fact that the colonial government had decided finally and adversely to the United States in the interpretation of a convention not made with the colony, but with its metropolis.

At this point the subject ceased to be discussed, here and was referred by the Department, in reclamation, to the Madrid Government through our minister plenipotentiary. A royal order, in consequence of his representations, was issued on the 22d of June, 1886, to the governors-general of Cuba and Porto Rico, instructing them to suppress the discrimination charged upon foreign goods coming from the United States in American vessels, putting the latter in this particular upon an equality with Spanish vessels. This royal order was duly published, but not obeyed by the insular government. Also, in obedience to the Department’s instruction No, 187, of the 15th of June, 1886, I conveyed the assurance to the governor-general, under date of August 3, as required by the said royal order, that Spanish vessels were treated in the United States in every respect on the same footing as American vessels. But, notwithstanding the publication of the royal order and the conveyance of this assurance, no change whatever was made, and the customs authorities continued, in disobedience of the royal order, to charge import duties on all goods of foreign origin coming here in American vessels under the fourth column, whilst at the same time they admitted the same goods under the third column when imported from the United States under the Spanish flag.

In consequence of the continued imposition of this discrimination against American vessels, in opposition to the royal order issued especially for its suppression, I addressed a communication, on the 20th of August, 1886, to the governor-general, invoking the exercise of his superior authority for the enforcement of said royal order, which was manifestly being prevented from going into effect by the obstructive action of the central collector of customs. But not having received any reply to my communication, I made a visit on the 8th of the following month to the intendant-general of finance, to whom it had been referred for decision. The results of this interview, purely negative, were reported by me to the Department in my dispatch No. 479, of the 9th of September, 1886. At last, on the 20th of that month, I received a communication, dated the 18th of the same month, from the central collector of customs, in which he informed me of the receipt of a telegram from the minister of the colonies denying in toto the right of American vessels to bring merchandise, the products of other countries from the United States to Cuba under the third column of the Cuban tariff, as expressly agreed by article 1 of the modus vivendi of the 13th of February, 1884; thereby subjecting them still to the payment of import duties under the fourth column, whilst allowing them to be brought by Spanish vessels under the greatly-reduced duties of the third column. Upon this determination of the Government of Madrid, transmitted through the insular government, further discussion here again ceased, as a matter of course. But as a consequence of that determination, and upon its confirmation at Madrid, President Cleveland revoked, by proclamation, dated the 13th of October, 1886, the suspension of the discriminating duties on Spanish vessels in the United States which had been proclaimed by President Arthur on the 14th of February, 1884, both suspending the modus vivendi and affirming by this act that the only canon of its interpretation was to be found in section 4228 of the Revised Statutes of the United States.

In concluding this report upon the said 286 bags of coffee, the product of the Republic of Venezuela, and shipped by Messrs. Calixto Lopez & Co., in New York, on board the American steamer Saratoga for Havana in the month of October, 1884, I beg to remark in recapitulation:

(1)
That on the enforcement here of the modus vivendi of the 13th of February, 1884, the customs authorities of this island admitted cargo the product of other countries coming from the United States in both Spanish and American vessels on an equal footing, collecting the import duties alike under the third column of the Cuban tariff.
(2)
That this benefit was also extended to the same class of cargo coming in English vessels from the United States.
(3)
That some weeks afterwards it was discontinued upon American as well as upon English vessels.
(4)
But that its enjoyment was continued to Spanish vessels.
(5)
That the assent of the United States was never given to the change of interpretation made by the customs authorities of this island.
(6)
That upon the remonstrance of the Government of the United States the royal [Page 1457]order of the 22d of June, 1886, was issued, ordering the resumption of the original interpretation and the replacing of the vessels of both nations upon an equal footing in the bringing of cargo from the United States to Cuba.
(7)
That, this royal order not having been enforced here, the President in consequence revoked the modus vivendi of the 13th of February, 1884, but that it was again renewed at Washington on the 27th of October, 1886, upon the acceptance by Spain of the interpretation of the Department of State.

I have, etc.,

Ramon O. Williams.
[Inclosure 5 in No. 284.]

Mr. Williams to Mr. Porter.

No. 177.]

Sir: With particular reference to the Department’s instruction No. 133, dated March 1, 1884, addressed to my predecessor and relating to the agreement of January 2 and 13th of February with Spain, I now beg to inclose for the information of the Department the translation of an explanatory Royal order, dated the 6th of April last and published in the Official Gazette of this city on the 8th instant.

With the view of obtaining a fuller understanding of its meaning I called this morning on the intendant-general of finance, who informed me in answer that instead of two conditions (la doble circumstancia), in reality, according to the interpretation of the agreement of the 13th of February by his department, that three conditions were necessary to entitle American merchandise imported into this island and that of Porto Rico to the benefits of the third column of the tariff, and that they are, viz:

  • First. That they shall be the product of the United States.
  • Second. That they shall proceed from the United States.
  • Third. That they shall come either under the American or Spanish flag.

Further, I have been informed here in conversation with merchants, that in consequence of this interpretation the several British steamers now engaged in the carrying trade between the United States, Cuba, and Porto Rico, as well as those running between the United States and Mexico, via Havana, are not able to get freight, and that their places will have to be filled with American or Spanish steamers.

I have, etc.,

Ramon O. Williams.,
[Inclosure 6 in No. 284.—From the Official Gazette, of Havana, May 8, 1885.—Translation.]

Royal Order.

Under date of the 6th of April last, and numbered 387, the following Royal order has been communicated by the colonial department to his excellency, the governor-general of this island:

Excellency: Under date of 13th of September ultimo, I have informed the minister of state as follows:

“‘Excellency: In view of the Royal order issued by your department under date of 30th of August ultimo, and of the communication received from the minister plenipotentiary of the United States, regarding the interpretation given by the governor-general of Porto Rico to the commercial agreement entered into between Spain and that Republic, the King has been pleased to order that your excellency be informed that the colonial department has not issued the instructions alluded to by the plenipotentiary referred to, having limited itself only to the answering of the questions asked upon the subject by the governor-general of the Antilles, under the criterion that in order to enjoy the benefits of the third column of the tariff the double circumstance is necessary, that the merchandise be the products of the United States and that it be transported under the American flag, benefits which have since been extended to France and Germany, in virtue of their reclamations, which they had the right to found on the most-favored-nation clause.’

[Page 1458]

“Which by Royal order I transmit to your excellency for your information and the corresponding effects.”

And compliance with the same having been ordered by his excellency, it is published in the Official Gazette for public information.

Lucas Garcia Ruiz.

[Inclosure 7 in No. 284.]

Mr. Williams to Mr. Porter.

No. 220.]

Sir: With special reference to my dispatch No. 177, dated the 15th of May last, I beg to inclose the translation of a paragraph that has appeared to-day in the columns of the Diario de la Marina, a leading newspaper published in this city, in which the public is notified that Messrs. F. Alexandre & Sons, of New York, would, after the 9th instant, substitute the British tramp steamer Principia, now running in their steam-ship line between the terminal ports of New York and Vera Cruz, via Havana, with a Spanish steamer.

As I understand, Messrs. Alexandre & Sons have been forced to this step by the interpretation given to the agreement of the 13th of February, 1884, between the United States and Spain by the treasury department of Cuba, inconsequence of which interpretation American merchandise is only entitled to enter this island under the duties of the third column of the Cuban tariff when imported in Spanish or American bottoms.

I am, etc.

Ramon O. Williams.
[Inclosure 8 in No. 284.—Translation.]

Notice.

Messrs. Todd, Hidalgo & Co. have this day furnished us the following advice, which is of interest to commerce:

“Messrs. F. Alexandre & Sons have telegraphed us that on the 9th instant they will dispatch a Spanish steamer for this port in place of the (British) steamer Principia, and we call the attention of importers to this fact in view of the advantages thereby offered for the importation of foreign goods.”

[Inclosure 9 in No. 284.]

Messrs. Lopez & Co. to Mr. Williams.

Sir: We are in receipt of letter from Messrs. Segundo Alvarez & Co., of this city, dated on the 30th day of October last, wherein they inform us as having received an invoice declaring 286 bags of coffee consigned to them and shipped by Messrs. Calixto Lopez & Co., of New York, on board the American steam-ship Saratoga on the 16th day of same month.

On the arrival of said steamer into this port these gentlemen made the regular entry of said coffee as per invoice and bills of lading in the custom-house at this port, to have the duties paid by the third column of the tariff as applied to merchandise coming from the United States of America. Wherefore the officers of the custom-house objected, compelling them to pay by the fourth column of the tariff or making a deposit which amount should cover the difference there is from the third to the fourth column of the tariff, and claiming that such law was only applicable to American products, in view of that Messrs. Segundo Alvarez & Co. claim that this difference will be charged to us in our account, because we are the shippers and purchasers of said goods.

We must beg you as the representative of the American Government to inform us whether it is or not applicable to both countries and flags the commercial agreement which was published in the official papers of both countries, compromised between Mr. Foster, as special envoy and minister plenipotentiary of the Government or the United States of America at Madrid, and the Spanish Government, on the 1st day of March, [Page 1459]of the present year (1884), wherefore both governments agree and declare the abolishment of taxes to vessels and merchandise coming into Cuba and Porto Rico from the ports of the United States of America; wherein they classify in the third column of the revenue tariff all merchandise or products and procedencias from either of these countries coming in American or Spanish vessels. Our house in New York made the shipment of said goods in American vessels on account of the agreement between the two Governments as aforesaid.

Waiting for an immediate action in the interest of truth and justice, the remain, sir, etc.,

Calixto Lopez & Co.
[Inclosure 10 in No. 284.]

Invoice of 286 bags of coffee consigned to and for account and risk of Messrs Segundo, Alvarez & Co., of Havana, shipped on board the American steam-ship Saratoga, whereof Mcintosh is commander.

286 bags of coffee, with a weight of 55,641 pounds, at 10 cents each $5,698.20
Bags for same $147.38
Cartage 51.90
Transportation from Guaira to New York 337.13
Exportation duties 276.57
Commission and other expenses 274.77
1,087.75
Total (Spanish gold) 6,785.95

Calixto Lopez & Co.

New York, October 16, 1884.

Currency. Gold.
Duties on 286 bags of coffee, according to the third column of the revenue tariff as it is decreted and applied to American precedences $242.92 $2,186.29
Duties on same according to the fourth column, as they want 310.48 2,794.40
Difference against us 67.56 608.11
Segundo, Alvarez & Co.

[Inclosure 11 in No. 284.]

Mr. Williams to Mr. Hunter.

No. 76.]

Sir: I have the honor to call the special attention of the Department to the within case, reported to this consulate-general by Mr. Manuel Lopez, now here, and partner of the American firm of Messrs. Calixto Lopez & Co., of New York City.

The facts as stated in the accompanying letter, briefly summed, are as follows: These gentlemen, under the impression that the commercial agreement entered into between the United States and Spain at Madrid on the 13th February last past had for object the abolition of the different duties on the part of Spain and the retaliatory duties on the part of the United States, hitherto mutually imposed on the trade between the United States, Cuba, and Puerto Rico, and conversely between those islands and the United States, did, on the 16th of last month, ship in the port of New York, on board the American steam-ship Saratoga, bound for Havana—

No. 1–125, 125 bags of coffee;
No. 126, 161 bags of coffee;
286 bags of coffee—

as per accompanying original bills of lading and copy of invoice to be delivered to Messrs. Segundo, Alvarez & Co., merchants of this city.

[Page 1460]

But on the landing of this coffee here the custom-house authorities, contrary to the only purpose and object of the said commercial agreement, i. e., of putting the vessels of both nations on an equality, exacted a differential duty, pretending to collect it according to the fourth column of the tariff, instead of collecting it according to the third column; there resulting, in consequence, a difference of duties of $67.56 Spanish bank bills and Spanish gold, per accompanying statements, which is nothing more or less than that to collect a differential duty on transit cargo brought to Cuba in American vessels, in order to give the carriage of such transit cargo between the United States and Cuba and Puerto Rico exclusively to Spanish bottoms, in partial violation of the intention and meaning of the agreement of the 13th of February last, and in part a reversion by Spain to the same treatment extended to our vessels which provoked the special message upon the subject addressed to Congress by President Jackson in 1834, which ended in the enactment, as an offset, of our retaliatory duties. The abolition of the one as cause and the other as effect was the only object of the said agreement of 13th of February of the present year.

In this connection, and for reasons that may be discerned in my separate and confidential dispatch No. 10, dated September 26 ultimo, I would say that the article jerked beef, hitherto forming one of the prime elements of the circuit of trade carried on between Barcelona, Buenos Ayres, Montevideo, and Havana, at the expense of American sugar consumers, is now being carried from the river Plata to New York and from thence brought to Havana.

Now, as a consequence, if this interpretation put by the customs officials here upon out from carrying this jerked beef between New York and Havana, and the business will the agreement of February 13, 1884, is allowed, then American vessels will be shut out from carrying this jerked beef between New York and Havana, and the business be monopolized solely by Spanish shipping, thus showing conclusively that the differential duties have not yet been totally abolished by Spain.

Awaiting the Department’s instructions on this subject, I have, etc.,

Ramon O. Williams.
[Inclosure 12 in No. 284.]

Mr. Williams to the Governor-General.

Excellency: I have the honor to present for your excellency’s consideration and decision the following case, which has been reported to this consulate-general by Mr. Manuel Lopez, now here, and partner of the firm of Messrs. Calixto Lopez & Co., of New York City, the facts of which are as follows, viz:

These gentlemen, under the impression that the commercial agreement entered into between the United States and Spain at Madrid on the 13th of February last past had for its object the abolition of the differential duties on the part of Spain and the countervailing or retaliatory duties on the part of the United States hitherto mutually imposed on the trade between the United States, Cuba, and Porto Rico, and conversely between those islands and the United States, did on the 16th of last month ship in New York, on board the American steam-ship Saratoga, bound for Havana, 286 bags of coffee, the product of the Republic of Venezuela, which had been carried from the port of La Guayra, in Venezuela, to the port of New York, in the United States.

But regardless of the conditions of said agreement of the 13th February, on the landing of this coffee in the port of Havana, the customs authorities here have pretended to collect the import duties thereon according to the fourth column, instead of according to the third column, of the tariff ruling in this island.

In consequence, an excess of import duties has been assessed on said coffee of $87.56, Spanish bank bills, and $608.11, Spanish gold, over and above what it would have had to pay had it been brought from New York to Havana in a Spanish vessel.

I am therefore compelled to remonstrate before your excellency against the action of the customs authorities in the case as being contrary to the intent and meaning of the said agreement of the 13th of February last, promulgated in the Official Gazette of this city in its issue of the 23d of April of the present year, and according to which, as your excellency will observe on reference thereto, it is explicitly stated that the object of the agreement was the mutual concession of tariff advantages between the islands of Cuba and Porto Rico and the United States.

The same decree, article 1, also declares that “in virtue of the authority granted to the Spanish Government by article 3 of the law of the 20th of July, 1882, that the duties of the third column of the Cuban and Porto Rico tariff shall be applied, which implies the suppression of the differential or flag duties to the products and merchandise proceeding from the United States.”

[Page 1461]

The fact of this collection of an excess of import duties in the case cited constitutes beyond all doubt the imposition of a discriminating duty against the American flag in Cuban ports, which was suppressed by the agreement of 13th of February, 1884.

It is also in contravention to the law of the Congress of the United States by which the President was authorized to accept the agreement of February 13, 1884, for it is opposed to the perfect reciprocity upon which said Congressional authority is based.

Again, had this coffee been brought first from La Guayra to Havana, and from thence shipped in a Spanish bottom to the United States, no more duties would have been collected there than had it been shipped in an American bottom; that is, the shipping of both nations would have been placed on a perfect equality in the ports of the United States.

Neither is it reasonable to suppose that the Government of the United States would ever have entered into an arrangement by which the vessels of foreign nations should be favored in the loading of cargo in American ports over American vessels: yet such is what is implied by the interpretation of the agreement of the 13th of February ultimo, by the Havana customs authorities.

Therefore, relying upon your excellency’s clear judgment and good desires for the promotion of commercial relations between the United States and Cuba, I have to ask that it be ordered through your excellency’s superior authority, in view of the foregoing, that no more duties be collected on the said 288 bags of coffee of Messrs. Calixto Lopez & Co., of New York, than if they had been brought to Havana in a Spanish vessel.

Trusting in an early reply from your excellency for transmission to the honorable the Secretary of State at Washington, I remain, etc.,

Ramon O. Williams.
[Inclosure 13 in No. 284.]

Mr. Williams to the Governor-General.

Excellency: On the 17th of November last I had the honor to address your excellency an official communication upon the subject of a discriminating import duty collected by the customs authorities of this city upon 286 bags of La Guayra coffee, transhipped in the port of New York on board the American steamer Saratoga for this port, to which communication I have not as yet received an answer.

In consequence, and in obedience to special instructions, dated Washington the 30th ultimo, from the honorable Secretary of State of the United States, I have now most respectfully to ask your excellency to be pleased to inform this office, at your earliest convenience, of the decision that the island government may have reached upon the subject, to the end that I may accordingly communicate the same to the honorable Secretary of State, adding by instruction that the Government of the United States certainly expects that an engagement like that of February, 1884, which proposes to abolish all differential duties, should be interpreted so as not to discriminate against any cargo carried in an American vessel.

I have, etc.,

Ramon O. Williams.
[Inclosure 14 in No. 284.—Translation.]

Mr. Cassd to Mr. Williams.

Sir: In answer to your communication of the 17th of November last and 9th instant, referring to the collection of customs duties on 286 bags of coffee, the product of the Republic of Venezuela, proceeding (procedentes) from the United States in the American steamer Saratoga, his excellency the governor-general, after a hearing with the department of the treasury, has been pleased to decide that you be informed, as I now have the honor to manifest, that the 286 bags of coffee have been appraised under the fourth column of the tariff, in accordance with decision given by this general government on the 30th of May last, which ordered that the benefit of the third column could only be enjoyed by the products of the United States imported under the American flag, [Page 1462]a circumstance foreseen in the treaty between the United States and Spain, the said benefit corresponding only to the products of that nation proceeding from the same, but not to the products of other nations, though they come from ports of the United States.

God guard you many years.

Francisco Cassá.
[Inclosure 15 in No. 284.]

Mr. Adee to Mr. Williams.

No. 187.]

Sir: I send you inclosed a copy of dispatch No. 69 from the minister of the United States at Madrid, in which he incloses a copy of an order issued from the ministry of ultramar to the governors-general of Cuba and Porto Rico, respecting the suppression of the differential flag duties, and a proposed equalization of navigation dues in those islands, and certain correspondence relative thereto.

Your attention is particularly called to that part of the order which relates to the equalization of navigation dues and provides that as soon as it is shown by the representative of the United States in Cuba that this benefit has been granted to Spanish vessels, the authorities in Cuba shall proceed to apply it to American vessels; and, in the same connection, to section 14 of the act of June 26, 1884, entitled “An act to remove certain burdens on the American merchant marine and encourage the American foreign carrying trade, and for other purposes,” three copies of which are sent herewith. You will Convey to the proper authorities the assurance, under said act, that Spanish vessels coming to the United are treated in every respect on the same footing as vessels of the United States.

I am, etc.,

Alvey A. Adee,
Second Assistant Secretary.
[Inclosure 16 in No. 284.]

Mr. Williams to the Governor-General.

Excellency: In compliance with that part of the royal order dated Madrid, the 20th of June, and published for execution by order of your excellency in the Gaceta of to-day, wherein it provides that it is the will of His Majesty the King of Spain that as soon as it is shown by the representative of the United States in Cuba that Spanish vessels pay the same rates of navigation dues in the United States as American vessels, the customs authorities of this island shall proceed in the exercise of a just reciprocity, and in harmony with the royal decree of the 4th of June, 1868, to apply the like rule to American vessels,! have the honor to inform your excellency herewith that I am specially instructed by my Government, under date of the 15th ultimo, to assure your excellency that, under section 14 of the act of June 26, 1884, printed Copy of which is herewith annexed, Spanish vessels going to the United States are treated there in every respect on the same footing as vessels of the United States.

In view of this statement I beg your excellency to be pleased to consider this requisite of the said royal order as hereby fulfilled on the part of the representative of the United States in the island of Cuba.

I have, etc.,

Ramon O. Williams.
[Inclosure 17 in No. 284.]

Mr. Williams to the Governor-General.

Excellency: I am compelled to invoke the superior authority of your excellency to the end that the royal order issued at Madrid the 22d of June last, in answer to the complaint presented to His Majesty’s Government by the minister plenipotentiary of the [Page 1463]United States, under the convention of the 13th of February, 1884, be fulfilled, in this island, because its execution is debarred, notwithstanding your excellency’s affirmative command in the Gazette of the 3d instant, by the instructive action of the central administration of customs of this island.

In order that your excellency may the better, understand the grounds of the complaint of my Government, I beg to mention that on the immediate promulgation in Cuba of the convention of the 13th of February, 1884, by which a stop was put to the retaliatory duty charged by the Government of the United States of 10 per cent, on the invoice value of products of the islands of Cuba and Porto Rico, imported into the United States in Spanish vessels, and conversely to the differential import duties collected by the Spanish Government on cargoes brought in American vessels from the United States to these islands, the execution of the provisions of this convention by the customs authorities here was, at first, entirely in accord with the intention and understanding of my Government. But that just compliance was soon thereafter departed from, and as a consequence this originated the complaint of the United States, and for the satisfaction of which the royal order of the 22d of June last has been issued.

The first formal complaint against the action of the customs authorities in this matter took place in this port in the month of November, 1884, and grew out of a shipment of 286 bags of coffee, the product of the Republic of Venezuela, which were transshipped in the port of New York on the 16th day of that October of that year on board the American steamer Saratoga for Havana, upon which the customs authorities here collected import duties under the fourth column of the tariff instead of under its third column, making the excess of import duties thereby ascend to $37.56’ Spanish bank bills and $608.11 in Spanish gold over and above what would have been collected from the importer had this coffee been transshipped in the American port of New York on board a Spanish vessel. I duly remonstrated against this action of the customs authorities in my communication addressed to your excellency the 17th of November, 1884, followed by my reminder of January 9, 1885, translated copies of which, together with copy of the answer from the political secretary, are herewith accompanied for the information of your excellency.

Your excellency will readily comprehend that the Government of the United States could never enter with another government into an agreement that would either directly or indirectly favor foreign shipping in American ports over American shipping; but this is exactly the meaning and effect of the interpretation given by the central administration of customs of Cuba to the convention in dispute. Could this ruling be permitted there, owing to the discriminating import duties collected in Cuba on merchandise not the product of the United States but transshipped on board American vessels in American ports and brought to Cuba, American vessels would thereby be practically excluded from the right of loading in American ports such bonded goods as East Indian, West Indian, or South American coffee, Newfoundland salted fish, jerked beef of Buenos Ayres, East India rice, or Chinese groceries, or other products of foreign countries for Cuba, whilst this right would be enjoyed by Spanish shipping. Now, this conclusion is nowhere deducible from the convention of the 13th of February, 1884. To show, too, that His Majesty’s Government is entirely in accord with the opinion of my own Government in the matter, I have only to cite the promptness with which the royal order of the 22d of June last has been issued in response to the complaint of the Government of the United States. This proof of accord between the two Governments is further-more made manifest by the words of the Spanish Government, wherein, giving its reason for transmitting to your excellency this royal order for execution, it says:

“To the end of showing the good disposition of Spain respecting the United States, and the good faith with which it attempts the fulfillment of treaties, it has ordered, in ratification of what is established in the royal order of the 13th of September, 1884, that the American flag in the direct commerce with the islands of Cuba and Porto Rico be equalized completely with the Spanish flag in the carrying of products and articles not the products of the United State.”

This language clearly means assent to the solicitation of my Government and not refusal, as is pretended by the central administration of customs of Havana.

It means assent and nothing else; for otherwise my Government would not have considered it as a proper answer and settlement of its complaint; and when this royal order was accepted, it was in the confidence that it would be carried into effect in the same good faith so much particularized by its own words.

As your excellency must be aware, the convention of the 13th of February, 1884, though composed of so few clauses, is nevertheless one whose bearings upon the commercial relations of the two countries are of great importance.

In the first place, a tariff struggle in the commerce of the two countries that had lasted for fifty years was thereby terminated; for the retaliatory import duty of 10 per cent. charged by the United States on the products of the islands of Cuba and Porto Rico when carried there in Spanish vessels, and which prevented them in fact from participating [Page 1464]in that trade, was removed, and they were thereby enabled to continue without interruption their circuit of voyages from Spain to the River Plate and Cuba back to Europe without having to take in ballast in the ports of these islands, enabling the Spanish shipping likewise engaged in the direct trade between the mother country and the colonies, and that sailing from other European ports, to return to Europe via the United States without having to do it in ballast, but loaded with the products of Cuba and Porto Rico—an advantage to Spanish shipping only to be appreciated when it is remembered that there is no longer sale in Europe, outside of Spain, for the sugars of Cuba and Porto Rico since beet-root sugar has taken possession of those markets.

This royal order has been accepted by my Government as a final settlement of the contention, and I feel assured that it will be greatly surprised to learn that its execution in Cuba is prevented by the opposition of a purely ministerial officer, whose action unless checked by your excellency’s superior authority may give rise to a renewal of the tariff struggle which was so happily terminated by the convention of the 13th of February, 1884, a copy of which, together with that of the royal order of the 22d of June last, respectively promulgated in the Gazette of the 20th of April, 1884, and 3d of the present month, are herewith inclosed for the inspection of your excellency.

In conclusion, and in obedience to special instructions received from my Government, I now have the honor to ask your excellency to be pleased to order that the said royal order of the 22d of June last be executed in all its parts throughout this island: First, by the collection of import duties under the third column of the Cuban tariff upon articles not the product of the United States but brought therefrom in American vessels, equalizing thereby American with Spanish vessels; and, second, that equal and no more tonnage or navigation dues be collected from American vessels than are collected from Spanish vessels in the ports of Cuba, this office having already complied to this end with the requirement of the said royal order in my communication to your excellency under date of the 3d instant, wherein I gave the assurance that no more tonnage or navigation dues are charged on Spanish vessels than are charged on American vessels in the ports of the United States.

I have, etc.,

Ramon O. Williams.
[Inclosure 18 in No. 284.]

Mr. Williams to Mr. Porter.

No. 489.]

Sir: I beg to report that not having received any answer from his excellency the governor-general to the communication I addressed him on the 20th ultimo, invoking the exercise of his superior authority for the enforcement of the royal order of the 22d of June last, issued in relation to the convention of the 13th of February, 1884, that in consequence I called yesterday upon the intendente-general of the treasury, to whom it was submitted for examination and reply.

From my interview with him I regret to have to say to the Department that the matter does not appear to have had any attention from the intendente-general since my last visit to him on the 25th ultimo, as reported in my dispatch No. 472, dated the 26th of same. He told me that he had not yet received any answer from Madrid to his telegram asking for the explanation referred to in my dispatch mentioned above. I found him, as I thought, quite changed in his views, and agreeing with the central collector of customs (administrador central de aduanas), whose action has thus far impeded the carrying out of the royal order. He touched upon the word “ratificar” of the order (ratify), which he thought might have been intended for “rectificar” (rectify). But as I saw that this was tending to a mere play upon words and was going to end in a fruitless discussion, I interrupted him, saying that on the part of the Government of the United States there was no doubt whatever about the meaning of this royal order, and added that what I desired was a conclusive answer to my communication of the 20th ultimo, in order that I might be enabled to transmit it to my Government. He then promised me to take the matter up without waiting further for the telegraphic answer of the minister of the colonies at Madrid, who, he supposed, must be at some watering-place outside of that metropolis.

I have, etc.,

Ramon O. Williams.
[Page 1465]
[Inclosure 19 in No. 284.]

Mr. Valdes to Mr. Williams.

Sir: Under this date the intendaney communicates to this center a telegram from his excellency the minister of the colonies, which I copy verbatim:

“Royal order of 22d June, 1886, ratifies and confirms that of the 13th September, 1884, in the understanding that the 3rd column of the tariff is applicable only to the natural products of the United States, proceeding from their ports and carried in their vessels directly to the Spanish West Indies; the equality of flag only embraces the said products under the condition mentioned, but in no case foreign products, even when brought in American vessels from the United States.”

Which I have the honor to communicate to you as a definite reply to your official communication addressed to the intendaney, and which treats of this affair.

I am, etc.,

Joaquin B. Valdes.