Mr. Buchanan to Mr. Gresham.
Buenos Ayres, October 5, 1894. (Received November 21.)
Sir: You will have noted in inclosure 2 in my No. 59 the invitation of the minister of foreign affairs to confer regarding the proposed Argentine tariff for 1895; a reference to my Nos. 49 and 59 will give you the position I have taken regarding the subject. As requested, I met the minister, Dr. Costa, with the minister of hacienda, Dr. Terry, in conference on the 2d and 3d instants, with the results herein given.
I have on several occasions discussed informally with the minister of foreign affairs the question of tariff, and felt sure, as I now do, of his sincerity in expressing his desire to do what he consistently could to aid our commerce. I have had a like confidence in the justness and high purposes of His Excellency President Saenz-Pen a, and have the greatest pleasure in recording his uniform kindly and interested wishes for the mutual success of both countries.
As to the position of others having to do with the subject of tariff, I do not deem it wise to express my opinion, lest I might do an unintentional injustice.
It is apparent to me that the large and small manufacturing concerns here will work to maintain or increase the duty on almost all manufactured articles; and, strange as it may seem, so little is known here in a general way on the subject of customs tariffs that some newspapers object to having lumber cheapened, as it would be by reducing the duty, because, they say, it will benefit some other country.
I advised the Department in my No. 49 that I believed the tariff commission, which is an appointive body created by the minister of finance, and presumably carrying out his views, would in its report increase the duty on many American products.
I was enabled to secure, before the conference on the 2d instant, a printed copy of the commissioners’ report, and found that in regard to several of our prominent shipments to this country my belief was well founded.
It should be understood that this report is in the nature of a tariff bill, which is submitted to Congress by the Government with such few changes as seem desirable.
The commission placed all agricultural implements on the dutiable list: advanced the duty from 5 to 10 per cent; placed those which, under the existing law, are free on the 10 per cent list, and on those valued under $150 raised the duty from 5 to 25 per cent, unless, like plows, they are specifically mentioned in the 10 per cent list.
The commission changed the lumber classification, lowering one and [Page 15] raising two classes of pine, so that, instead of a reduction, there would be an actual increase of duty on the total lumber imports from the United States for the first six months of this year of over $6,000.
They lowered the duty on kerosene one-half cent per kilo, and made a similar reduction on lubricating oils; they lowered the duty on tobacco, canned goods, furniture, and some other articles; but, in the main, unless raised, the duty on our exports to this country has been left as it now exists.
The Department will note in my letters to the minister of foreign affairs that I called particular attention to the inequalities and harshness of the tariff as applied to our lumber, and the actual prohibition it effected in several lines of manufacture in which we are preeminent and able to compete with the world, notably, farm wagons and canned goods, tomatoes, fruit, etc.
I took the position at both conferences that the action of the tariff commission in raising the duties on farm machinery and lumber was contrary to the spirit of the statements heretofore made to me by the minister of foreign affairs, and likewise the opposite of the views expressed by the Argentine minister in Washington to the Department.
The repeated intimations I had made to the minister of foreign affairs that we felt gratified and secure in the statement given out that it was the purpose and wish of this Government to make liberal concessions to us have not been I think without effect, as at the first conference I was told by the minister, in answer to my inquiry regarding the position of the Government on the action of the commission in raising the duty on agricultural implements, that the Executive would strike out the commission’s recommendations and recommend that the present duties and regulations on this class of goods continue during next year.
This is of course no concession, as I pointed out to the minister; but in view of the undoubted protection tendencies of the Government as a whole and its inclination evidenced by the work of its tariff commission to advance duties, I am satisfied this action is all that can be expected at this time.
The lumber schedule was a source of greater difficulty because of the fact that our yellow pine, or pitch pine, as they call it here, pays, under the present excessive and illogical tariff, in duties about $400,000 gold annually, against $68,000 collected on an approximately equal quantity of white pine, the value of the latter wood being twice that of the former.
The position I have taken and endeavored in every way to illustrate and make clear to the Government is that this is virtual discrimination, inasmuch as all the pitch pine comes from the United States, while the greater part of the white pine, although passing through the United States in bond, comes originally from Canada. I urged that, not only was the course now being adopted unfair to the United States, but that it put an excessive burden on an article which, under normal conditions, would have a much greater consumption; that the loss in revenue by properly and fairly adjusting the question would, I believed, be made up by an increased use of the wood, and most important, as I thought lowering the duty would materially lessen the cost and thus benefit the people of the country.
The finance minister had present at the second conference a member of the tariff commission, a member of a large importing house, and the secretary of the commission, the purpose being seemingly to sustain the position taken by the commission.
[Page 16]After my refusal to acquiesce in several propositions suggested by the minister of hacienda, an agreement was reached on the general line I had maintained, that the values should be revised in accordance with the facts and that the same duty apply to each of the three kinds of pine.
The present duty and value per square meter on each of the three kinds of pine lumber imported here is:
| Duty. | Value per square meter. | |
| Per cent. | Cents. | |
| White pine | 5 | 45 |
| Spruce pine | 5 | 45 |
| Pitch (or yellow) | 25 | 50 |
Under the above, the duties paid on the total quantity of each of the three kinds of pine imported from the United States and Canada during the first six months of this year was:
| White pine | $33,076.14 |
| Spruce pine | 20,116.30 |
| Pitch pine | 200,577.75 |
| Total | 253,770.19 |
The recommendation of the tariff commission was as follows:
| Duty. | Value per square meter. | |
| Per cent. | Cents. | |
| White pine | 10 | 45 |
| Spruce pine | 15 | 25 |
| Pitch pine | 25 | 40 |
Under their plan the lumber above mentioned would have paid:
| White pine | $66,152.28 |
| Spruce pine | 33,527.10 |
| Pitch Pine | 160,462.20 |
| Total | 260,141.58 |
Or $6,371.39 more than at present, which would be a “reform” in the wrong direction.
As a result of the conference, the minister has agreed to make the nine schedule read as follows:
| Duty. | Value per square meter. | |
| Per cent. | Cents. | |
| White pine | 15 | 35 |
| Spruce pine | 15 | 25 |
| Pitch Pine | 15 | 30 |
Under this scheme the lumber referred to in the last two illustrations would pay:
| White pine | $77,177.67 |
| Spruce pine | 33,527.10 |
| Pitch pine | 72,207.79 |
| Total | 182,912.56 |
Or $70,857.43 less than under the present law, and $77,228.82 less than under the commission’s scheme.
To make clear the direct benefit such a change would be to our yellow pine, the following table, showing the amount which would have been collected under each plan on the yellow pine shipped to this country from the United States during the first six months of the year, is given:
| Under present law | $200,577.55 |
| Under commission’s scheme | 160,462.20 |
| Under conference scheme | 72,207.99 |
It will thus be seen that if the Congress adopts the minister’s recommendation, there will be taken off our yellow pine about $256,000 in duty in one year, which should enable us to get a slight advance on the lumber and secure a greatly increased demand.
Crude petroleum has been omitted from the commission’s bill, and my interpretation is that, if passed in that form, it would, under the “omnibus clause” pay 25 per cent; the secretary of the commission said it would still be free, but consented to specifically name it in the bill before it was presented to Congress.
The finance minister, in reply to my request for further opportunity to present for his consideration some other suggestions looking to modifications in the existing prohibitive duty on canned goods and farm wagons, said that he was obliged to decline, as he was asked to present the bill to Congress yesterday; but that he would consider my views if presented to him in writing, and, if he could agree with me, he would go with me before the Congressional committee and ask their adoption.
I shall carefully note the action of the Congressional committee and the drift of public opinion on the changes already made in the bill before deciding what I will do in regard to his request.
We will have secured, by the changes mentioned, if the bill becomes a law, a little better footing commercially than at present. It is, of course, impossible to predict what the Congress will do with the bill, but the general opinion is that, with a few alterations, it will pass.
I shall inclose the proposed bill, together with the President’s message accompanying it, as soon as it has been forwarded to the Congress.
I have, etc.,