Baron von Thielmann
to Mr. Olney.
[Translation.]
Imperial German Legation,
Washington
,
June 4,
1896
.
Mr. Secretary of State: The Hon. W. Q. Gresham,
late Secretary of State, answered my predecessor’s note of October 13,
1894, relative to the duty now levied on German salt in the United
States, by his note of October 19, 1894, in which he stated that the
matter had been referred to the Secretary of the Treasury for his
opinion.
In the meantime, the opinion furnished by your excellency as
Attorney-General, to the Secretary of the Treasury, under date of
November 13, 1894, was laid before the United States Senate (Mis. Doc.
No. 52) on the 16th of January, 1895. I have the honor herewith to
inclose a copy of that opinion, and take the liberty specially to refer
to the concluding paragraph of your statements, as it appears in the
aforesaid Senate document, beginning on page 6, line 16 from foot, and
ending on page 7, line 13 from top. You there say that, for want of
sufficient data, you are unable to determine whether salt imported by
Germany from the [Page 206] United States
is placed on the same footing, in respect to duties, as salt produced in
Germany, as stated in this embassy’s note of October 13, 1894, or
whether the German internal excise tax on salt goes into the treasury of
the Empire and not into the treasuries of its several constituent
States.
I have now been instructed to lay before your excellency the documents
necessary to enable you to form an accurate judgment on the subject.
These documents are as follows:
- 1.
- The text of the law of the North-German Union (which no longer
exists), bearing date of October 12, 1867, relative to the
internal revenue or internal excise tax on salt.
- 2.
- The text of the agreement concluded May 8, 1867, concerning
the tax on salt among the States which now constitute the German
Empire, said agreement having remained in force since the
establishment of the Empire, which, in this respect, took the
place of the old Zollverein (Customs Union). The words found at
the beginning of section 3 of said agreement, viz, “The proceeds
of the tax shall be shared in common,” are important, inasmuch
as they furnish a basis to show that the salt tax goes into the
treasury of the Empire and not into the treasuries of the
several States.
- (Nos. 1 and 2, printed in the Bundesgesetzblatt (Collection of
the Laws of the North-German Union), No. 6, of 1867, No. 1
appearing on pp. 41–48 and No. 2 on pp. 49–52.)
- 3.
- The text of that portion of the budget of the Empire for the
fiscal year 1895–96 which treats of internal revenue, and which
shows that the salt tax referred to under title 4 still, in
point of fact, goes into the treasury of the Empire.
- 4.
- A memorandum elucidating the nature of the German tax on salt
by references to the aforesaid laws and other enactments.
Your excellency will be convinced, by a perusal of this memorandum and of
the other printed documents relating to the same subject, that the duty
of 12 marks per 100 kilograms which is levied on American salt on its
importation into Germany is, in fact, nothing but the internal revenue
or excise tax which, equal in amount, is levied on German salt by the
German Empire, and which goes into the treasury of the Empire, and that,
consequently, American salt in Germany is placed on the same footing
with German salt.
Under these circumstances, I venture to hope that your excellency will
now recommend to the Secretary of the Treasury (by whom no opinion
appears to have been expressed such as that to which reference was made
in the note of the Department of State of October 19, 1894) to issue a
declaration to the effect that, since satisfactory evidence has been
furnished that American salt in Germany is placed on the same footing
with German salt in respect to duties and taxes, no duty is to be levied
on German salt, in pursuance of paragraph 608 of the tariff act now in
force, on its importation into the United States.
Begging your excellency to be pleased to inform me of the decision
reached in this matter,
I avail, etc.,
[Inclosure 1.—Translation.—From the
“Bundesgesetzblatt” of the North-German Union. No.
6.]
Establishment of a tax on salt.
Sec. 2. A tax of two thalers per
hundredweight (net weight) shall he levied on salt intended for home
consumption, which tax, when the salt is of domestic production,
shall be paid by the producers or owners of the salt mines, and,
when it is [Page 207] imported from
any country not belonging to the Customs Union (Zollverein), by the
importer.
All substances from which salt is usually extracted (in addition to
salt obtained by evaporation, rock, and sea salt) are included under
the head of salt (table salt). The supreme fiscal authority of each
State of the Union is, however, authorized to exempt such substances
from taxation, when no abuse is to be apprehended.
II. Tax (duty) on foreign salt:
Sec. 19. The provisions of the tariff act,
of the customs ordinance, and of the customs penal laws, together
with the provisions modifying, elucidating, or supplementing the
same, shall be applicable to the importation of salt from foreign
countries and to the transit and exportation thereof.
The supreme fiscal authority of each State of the Union shall decide
to what extent the free warehousing of foreign salt is to be allowed
within the territory of such State.
[The law from which the two foregoing sections are taken bears date
of October 12, 1867, and it is provided that said law is to take
effect January 1, 1868.]
[Inclosure
2.—Translation.]
Agreement concerning the imposition of a tax on
salt, adopted May 8, 1867.
The Governments of Prussia, Bavaria, Saxony, Würtemberg, Baden,
Hesse, the States composing the Thuringian Customs and Commercial
Union, Brunswick, and Oldenburg, being actuated by the desire to
remove the restrictions to which the trade in salt is still
subjected in the territory of the German Customs and Commercial
Union, have, to this end, caused negotiations to be commenced, and
have named as their plenipotentiaries: [Here follows a list of the
plenipotentiaries.]
Article 3.
The proceeds of the tax shall be shared in common. They shall be
divided among the several States of the Union in proportion to their
population, after the deduction of the costs of collection and
inspection, which are applied to the payment of the salaries of the
officers charged with the collection of the tax in the salt works
(salt pits, salt mines, refineries), and after the deduction of any
amounts that may have been refunded for collections improperly made.
In all other cases the aforesaid proceeds shall be disposed of in
accordance with the principles agreed upon for customs duties.
[Inclosure
3.—Translation.]
memorandum.
According to article 35 of the constitution of the German Empire, the
Empire has the exclusive right to legislate concerning customs and
matters therewith connected, and further to legislate concerning the
excise tax on salt produced in the Empire, and concerning the tax to
be levied on other articles. The collection and control of duties
and excise taxes is left, according to article 36 of the Imperial
constitution (since the Empire has no machinery of its own for this
purpose) to each constituent State of the Empire within its own
territory. Customs duties and the tax on salt go, in pursuance of
article 38 of the constitution of the Empire, into the Imperial
treasury. Both imposts are, therefore, receipts of the Empire, as is
shown by the accompanying portion of the budget of the German Empire
for the fiscal year 1895–96 (pp. 2, 3, and 41).
The agreement concluded May 8, 1867, among the States constituting
the Union, for the collection of a tax on salt, has been expressly
maintained in article 3, section 7, of the treaty for a uniform
system of duties of July 8, 1867, which in pursuance of article 40
of the constitution of the Empire has, to that extent, remained in
force.
In consequence of this agreement similar laws for the taxation of
salt have been enacted in the States of the Union, to wit: For the
North German Union the law of October 12, 1867, a copy of which is
herewith inclosed, and to which the aforesaid agreement is appended;
for the Kingdoms of Bavaria and Würtemberg, and the [Page 208] Grand Duchies of Baden and Hesse, the
laws of November 16 and 25, and October 25, and November 9, 1867.
Since the provisions in question went into force in Alsace-Lorraine
in pursuance of the act of July 17, 1871, the aforesaid tax on
domestic salt has been levied for the Empire in all the States of
the German Empire in pursuance of uniform laws, and has been paid
into the Imperial treasury.
With regard to the tax itself, article 2 of the aforesaid agreement
of May 8, 1867, provides that salt produced within the territory of
the Customs Union, as well as that imported from foreign countries,
shall he subject to an excise tax of 2 thalers per hundredweight
(net weight) (12 marks per 100 kilograms). The rate adopted in the
German tariff of 12 marks per 100 kilograms on salt imported from
beyond the sea, and consequently on salt imported from the United
States of America, is therefore nothing but the excise tax provided
for in the aforesaid agreement on foreign salt, with a view to
placing it on absolutely the same footing with domestic salt.
The tax established by the German tariff act of July 15, 1879, for
the purpose of meeting the discriminating duty imposed in France on
German salt imported into that country by land, which tax exceeds,
by 80 pfennigs, the internal-revenue (excise) tax of 12 marks per
100 kilograms, is applicable solely to salt that is not introduced
into Germany by sea, and can therefore not affect salt imported into
Germany from the United States.
The German tax on salt, including the tax levied as an equivalent
therefor on foreign salt, is therefore, an imperial tax; it is
collected by the various States of the German Empire for the Empire,
into whose treasury it is paid. The aforesaid tax is levied in
pursuance of uniform laws, and at the same rate, by all the States
of the Union without exception. The excise tax on domestic salt and
that which is imposed on salt imported into Germany from the United
States by sea are identical.
