Mr. Smythe to Mr. Gresham.

No. 119.]

Sir: I herewith transmit the dispatches mentioned in my No. 118, in relation to tonnage tax on steam vessels. In reference to the secretary’s suggestion that steamship owners might increase their charges, I am reminded that some time since the Clydes felt themselves obliged to lower their rates in order to retain their business.

I am, etc.,

Henry M. Smythe.
[Inclosure in No. 119—Translation.]

Mr. Faine to Mr. Smythe.

No. 651.]

Mr. Minister: Following my dispatch of November 29, 1894, I have the honor to remit to you, herewith inclosed, the answer which my colleague of finances has made to me in view of the considerations with which you entertained me in your communication of the 24th of the same month, relative to the tariff of tonnage of steamers put in force since the 1st of January of last year.

Please accept, etc.,

P. Faine,
Secretary of State for Foreign Relations.
[Page 811]
[Subinclosure in No. 119—Translation.]

The Secretary of State of the Department of Finances and of Commerce to the Secretary of State for Foreign Relations.

My Dear Colleague: I have to acknowledge the receipt of your dispatch of the 29th ultimo, by which you communicate that of the minister of the United States relative to the tariff on tonnage of steamers put in force since the 1st of January of this year (1894).

To give you the detailed information I will reply in the order in which the arguments are presented by the consul-general of Her Britannic Majesty in the month of April last:

  • First. The law raising the tonnage on steamers from 50 cents to $1 did not contemplate solely the equality of treatment between them and sailing vessels. It was specially inspired by the idea of the revenue which would be produced, which, with other things equal, was double that of 1893–94, for example.
  • Second. The tonnage mentioned in the papers of sailing vessels is always, or nearly, their real tonnage, and their cargoes correspond perfectly therewith. That if any doubt may arise on that subject its truth can be manifested by taking the Veritas for a guide, by having the vessels gauged by collectors of our ports, or calculating carefully the number of tons of merchandise discharged and levying tonnage dues on that amount instead of taking as a basis the ship’s papers.
  • Third. It can be maintained that the owners of steamers can increase the rate of freight in proportion with the new tax, and thus avoid all pecuniary losses; and if to this it may be objected that importers will address themselves in preference to the sailing vessels, which carry at a cheaper rate, it may be answered with much sound sense and logic that the rapidity of transportation, notably with regard to European merchandise, will always cause the steamers to be preferred. There is, in fact, a manifest economy in having merchandise quickly transported, thus making quick sales—the profit diminished, perhaps, by the higher rate of freight, but augmented, on the other hand, by recurring sales—rather than to use a means less rapid and offering no other compensation than cheaper rates. Furthermore, the greater security offered by steamships would always be a point in their favor. But it is not even necessary to raise the rate of freight; the augmentation of the freight, the increase of traffic in prosperous years, will more than compensate the tonnage dues.

It is, perhaps, these three causes—rapidity of transportation, security afforded to merchandise, and the increase of traffic—which explains why since the promulgation of that law the number of steamers which visit our ports has not decreased, but on the contrary.

And permit me to add, in conclusion, that supposing really the possibility of competition between sailing vessels and steamers, I do not think it would be our duty to combat it, because all competition tends to benefit the consumer, and in this particular case the national commerce.

Herewith documents communicated.

My best respects,

F. Marcelin.

[l. s.]

Ch. Duchatellier, Chief of Bureau.