Mr. Gresham to Mr. Hengelmüller.

Sir: I have the honor to acknowledge the receipt of your note of the 3d instant, protesting against the discriminating duty of one-tenth of 1 cent a pound on sugar which receives a bounty on exportation to the United States from Austria Hungary.

This protest is grounded on Article III of the treaty of 1829 and on the commercial arrangement reached by exchange of notes May 2d and 3d, 1892, and proclaimed by the President on the 26th of the same month.

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I need not at present do more than observe, first, that the third article of the treaty relates to equality of treatment of imports under the flag of either country, and does not seem applicable to the present matter; and, second, that the arrangement of 1892, being concluded under the authority of the third section of the tariff act of 1890, necessarily came to an end by the repeal of that section when the existing tariff act took effect.

Discussion of the questions you present may, with propriety, be postponed in view of the pendency of a bill in Congress providing for the repeal of the provision of the present law imposing the differential duty. When that bill is disposed of, I may communicate further with you on the subject.

Accept, etc.,

W. Q. Gresham