No. 751.
Mr. Connery to Mr. Bayard.

No. 270.]

Sir: I have the honor to transmit herewith a translated copy of a note this day received from Mr. Mariscal, in reply to one from this legation, dated August 29, 1887, respecting the complaint of Messrs. Alexandre & Sons, regarding the rebate of duties accorded to the Trans-Atlantic Mail Steam-ship Company.

You will observe that Mr. Mariscal repeats the arguments contained in his former notes and concludes by expressing regret and surprise that the United States Government, in place of rejecting “an unfounded claim,” as be terms it, continues to foster it.

I am, etc.,

Thomas B. Connery.
[Page 1093]
[Inclosure in No. 270.—Translation.]

Mr. Mariscal to Mr. Connery.

Mr. Chargé d’affaires: Your legation, in a note dated June 17, of the current year, was pleased to state that the Honorable Mr. Bayard did not regard as satisfactory the explanations of the department of public works regarding the matter of the complaint of Messrs. Alexandre & Sons, concerning the rebate of 2 per cent, from import duties granted to the Spanish Trans-Atlantic Steam-ship Company.

The explanations above referred to had been furnished to your legation on the 11th of last May. It was then said that when the concession in question was made several complaints arose, though informally, from nations which had in their respective treaties with Mexico the most favored nation clause, and that the explanation then sufficed that the exemption was granted to a private company in lieu of subvention, and not to the flag of Spain, thus quieting said complaints.

To the above was added that, as the legation well knows, Mexico is not held by express conditions to treat the United States as a most favored nation—for there is no general treaty, in fact, between the two countries—and that though Mexico yields that treatment to the United States de facto, and per force of peculiarly friendly relations, under international usage Messrs. Alexandre & Sons have even less ground for complaint than English or German companies would have in like circumstances.

That note concluded calling attention to the justice of the statement made by the department of public works to the effect that Messrs. Alexandre & Sons themselves, who for fifteen years were subventioned by the Government of Mexico, should be the last to ignore Mexico’s right to concede to others the advantages and franchises it may deem necessary to the progress and promotion of its maritime commerce.

To this the said note from your legation, of June 17, replied that the Government of the United States had not desired most-favored-nation treatment for American vessels in Mexican ports because no stipulation for such treatment is embraced in the treaties binding the two countries; that neither had objection been made to the grant of a subvention to that Spanish line in lieu of special services it had engaged to perform, and that the complaint of Messrs. Alexandre & Sons is based upon the fact that the rebate of 2 per cent. of the customs is, in fact, granted to those who ship goods by the vessels of the said Spanish line.

In view of those allegations it was clearly evident that Mr. Bayard had not been able to consider the matter with due calmness and reflection. This department trusted that after re-examining the complaint presented he would recognize therein an attempt to obtain from the Government of Mexico by the via diplomatica what could not in any wise have been required.

Mr. Chargé d’Affaires, I believe that no one can call in question the right of the Government of this Republic to grant to private companies for special services they engage to perform subventions of any character the same may judge to be favorable to its interests, provided always that they do not infringe upon the stipulations of treaties now in force.

By virtue of its contract, the Spanish Transatlantic Company realizes a cash subvention by a rebate of 2 per cent. from customs duties upon goods imported by its steamers in the ports of Mexico. If the said company yields this discount of 2 per cent. to its shippers, it does so undoubtedly for the purpose of encouraging traffic, and no one may censure the company for doing so. If other companies suffer through the competition thus created, let circumstances be blamed and not the Government of Mexico, which is not bound to give heed to private enterprises and can not assume responsibility for losses such companies may sustain when, as in the present case, no compromise trammels its freedom of action. None in effect, for even under the hypothesis that the privilege granted by Mexico is granted, not to the Spanish Steam-ship Company, but to shippers by that line, as your Government sustains in its said note, no stipulation could be urged as between Mexico and the United States of America, by virtue of which Messrs. Alexandre & Sons could have reason for complaint concerning aught of detriment occasioned.

Upon the receipt of the note of August 29th last from that legation, relative to this matter, it pained me to see that the United States Government, in place of rejecting the unfounded claim of those gentlemen, which it should have without question done, in view of the impartial explanations rendered, insisted, on the contrary, in fostering that claim, giving as a reason that the interests of the parties had suffered and continued to suffer. This, while probably true, does not prove the violation of any right appertaining to them nor to any one else.

I would therefore beg of you, Mr. Chargé de Affaires, to be pleased to transmit to your Government the contents of this note, adding that the Government of Mexico hopes that the Department of State in Washington will restudy this matter, and will then become convinced that the claim to which I refer is really unsustainable.

I renew, etc.,

Igno. Mariscal.