No. 18.
Mr. Bayard to Viscount das Nogueiras.

Sir: I have the honor to acknowledge the receipt of your note of the 15th March last, in which you convey a request that vessels trading between the ports of Portugal and those of the United States may enjoy the benefits granted to those of other countries by virtue of the proclamation of the President of January 31, last.

The request is made upon the supposition that the privileges granted to certain vessels under the joint operation of the fourteenth section of an act to remove certain burdens on the American merchant marine and encourage the American foreign carrying trade, and for other purposes,” approved June 20, 1884, and the said proclamation of the President, inure to the advantage of Portuguese vessels by virtue of Article XIII of the treaty of the United States with Portugal of August 26, 1840.

The article of the treaty reads:

If either party shall hereafter grant to any other nation any particular favor in navigation or commerce, it shall immediately become common to the other party, freely where it is freely granted to such other nation, or on yielding the same compensation or an equivalent quam proxime where the grant is conditional.

(In this connection I beg to append for convenient reference a copy of section 14 of the act of June 26, 1884, and a copy of the proclamation of January 31, 1885.)

The Secretary of the Treasury, having been asked for an expression of his views as to the character of the conditional concession granted by the fourteenth section of the said shipping act, observes that the concession is an exemption from tonnage tax allowed all vessels arriving in the United States from ports situated in the localities named in that section, equal to the amount by which the tax of 3 cents per ton—levied on vessels in ports of the United States—exceeds the amount collected from vessels of the United States for tonnage tax, light-house dues, or equivalent taxes in ports within the localities mentioned. The proclamation specifies the ports within those localities whence vessels sailing to ports of the United States, upon arrival, get the benefit of an entire exemption from the tax of 3 cents per ton. The reason for the complete exemption is that no tax per ton, nor light-dues, nor any equivalent taxes, are exacted from American vessels in those ports.

In order to an allowance of entire exemption from tonnage tax to vessels arriving from ports in these localities it is necessary that the government of the foreign country within whose domain a particular port is situated should not impose at that port a similar tax or light-dues on American vessels. But if the foreign government does not impose such a tax at a port within the localities named, then the exemption inures to the benefit of all vessels arriving in ports of the United States from any such port that does not impose such taxes.

The fourteenth section of the shipping act, the Secretary of the Treasury observes—

Concedes a privilege to vessels of Mexico and Central America, which is at once national and geographical—contingent upon similar concessions from those Governments. [Page 1882] This privilege is an exemption from tonnage tax on all direct voyages between national ports and ports of the United States. It seems to me, therefore, that under the stipulations of Article XIII of the treaty with Portugal of 1840, a similar contingent privilege is granted by the shipping act to vessels of Portugal sailing from their national ports directly for ports in this country; but not to Portuguese vessels arriving in our ports from ports of departure that do not under the snipping act invest vessels sailing from them with a right to exemption. Moreover, the conditional concessions of the statute would not extend to any other vessels than those of Portugal and the United States sailing on direct voyages between Portugal and this country; nor if an exemption for Portuguese vessels can be claimed under the joint operation of the shipping act and Article XIII of her treaty of 1840, could such vessels claim a greater exemption than for 3 cents per ton, which is the maximum amount of the exemption that could on any conditions be allowed vessels of Mexico or the Central American States.

This Department sees no reason for differing from the above views. The question remains, “Whether Portugal does exempt vessels of the United States in her ports from such a payment of tonnage tax, lighthouse dues, or equivalent taxes as would exempt her vessels in our ports from the whole or a part of the tax of 3 cents per ton.”

Accept, etc.,

T. F. Bayard.