Mr. Olney to Baron von Thielmann.

No. 248.]

Excellency: Referring to your note of the 4th of June last, and to the Department’s provisional reply thereto under date of August 11, in regard to the assessment of duty on salt imported into the United States from Germany, I have now the honor to address you further on the subject in view of the report made pursuant to the Department’s directions by the United States ambassador at Berlin. It appears therefrom, in substantial consonance with the statements of your note aforesaid, that the domestic excise tax upon food salt is collected in all the States of the German Empire and the total net proceeds are divided pro rata among those States. It further appears that an equal amount is collected from foreign food salt entering Germany by sea, a differential surcharge of 80 pfennigs being collected on each 100 kilograms of such foreign food salt imported into Germany by land. After the collection of this entry charge the salt passes into consumption without other or further domestic excise tax being levied thereon. This latter duty, unlike the excise tax of which it seems to be the counterpart, is collected by the Imperial customs as a part of the gross receipts, which are in like manner distributed pro rata among the constituent States and European possessions of the Empire.

It is seen, therefore, that Germany in fact imposes a duty upon salt exported from the United States, and that the case falls within the language of the proviso of paragraph 608 of the present tariff law of the United States. In the absence of any qualification of that statutory provision the Department of the Treasury is without authority or discretion to exempt from duty salt imported from Germany, notwithstanding the fact that the rate of duty levied in that country upon salt imported from the United States appears to be the exact equivalent of the consumption tax to which the salt of domestic origin is subject [Page 209] under the law enforced in the German Empire, that law having been in form and manner enacted while the North German Union existed, so that its scope and purpose appear to have undergone no change by the subsequent association of those confederated States in the present Imperial organization.

Your note of June 4th, above referred to, deals specifically with the opinion which I gave while Attorney-General, on the 13th of November, 1894, upon the question submitted by the Secretary of the Treasury as to whether salt imported from the Empire of Germany is dutiable under paragraph 608 of the tariff act of August 27, 1894. In that opinion I discussed the several grounds upon which you had claimed by your preceding notes that German salt is entitled to come into the United States free. The first of these grounds was the applicability of the most favored nation clause in the treaty of May 1, 1828, between the United States and Prussia; and upon this point I remark that your note is silent, so that I am, as Secretary of State, still without the information which I lacked while Attorney-General, as to whether the treaty with Prussia is to be taken as effective as regards other portions of the Empire, or whether the German salt, for which free admission into this country is demanded, is a product or manufacture of Prussia proper or of some other part or parts of the German Empire.

Setting aside the treaty consideration, and with it the further point as to whether the salt taxes in question are levied for the benefit of the Imperial Government, as such, or for the benefit of the several constituent States among which it is ultimately divided, I can only at present regard your alternative proposition, to the effect that the German salt tax is not really an import duty, but should be looked upon as being in fact an internal excise tax, the manner of collecting which varies under the circumstances for convenience merely; in other words, that there is no discrimination against American salt, it and German salt being in reality treated on a footing of entire equality.

Before discussing this purely equitable aspect of the question with the Secretary of the Treasury, with a view to procuring, if possible, an amendment of the existing act, should circumstances be deemed to justify such a course, it would much facilitate my examination of the subject were I informed of the grounds, if any, for regarding the treaty stipulation concluded with Prussia in 1828 as now operative with respect to the whole German Empire; and if this be not the case, how and to what extent the Kingdom of Prussia may seek to adduce its treaty with the United States in support of a claim for the exemption from duty on salt produced in and exported from Prussia.

Accept, etc.,

Richard Olney.