Baron von Thielmann to Mr. Sherman.

[Translation.]

Mr. Secretary of State: The bill approved by the House of Representatives, now before the Senate of the United States, relating to the tariff of the United States (H. R. 379) provides in Schedule E, No. 206, that sugars, etc., the product of any country which pays, directly or indirectly, a bounty on the export thereof shall pay, apart from the actual duty set forth in the said No. 206, an additional duty equal to such export bounty so far as this bounty shall be in excess of any (internal) tax collected upon such sugars or upon the raw materials (beet or cane) used in their manufacture.

By instruction of the Imperial Government, I have the honor respectfully to invite your excellency’s attention to the fact that this provision can not be reconciled with the right of the most favored nation, which is granted by existing treaty stipulations to German products with respect to the duties to be imposed upon them on entry into the United States. The above provision, should it become a law, would, on the contrary, by imposing upon German sugar a special additional duty and thereby establishing in the aggregate a higher duty than upon sugars from various other countries, seriously damage, in treaty violation, German exports to the United States.

Your excellency is aware that this question was already discussed in the year 1894 between the Imperial Government and the Government of the United States. I may, in especial, refer to the memorandum of this embassy of July 16, 1894, and to the note of August 28, 1894, addressed by my predecessor, Baron Saurma, to the Secretary of State, Mr. W. Q. Gresham, both of which are found printed on pages 234 and 235 of the proper volume of Foreign Relations of 1894.

It appears to me needless, therefore, to repeat here the text of these two documents; but I must say here emphatically that I accept in their entirety as my own the arguments advanced therein on the part of my predecessor in behalf of the opinion held by the Imperial Government. I must state furthermore here that the damage which threatens German exports from the provisions of the present bill before Congress is a much heavier one than that which resulted from the tariff law of August 28, 1894, as this law provided only for an additional duty of one-tenth of a cent per pound on German sugar, while the present bill, if it should become a law, will entail a much higher additional duty upon German sugar.

As your excellency further knows, the Government of the United States has unreservedly recognized the justice of our protest against any additional duty based on our export bounty upon German sugar. This is clearly expressed in words in the report by Secretary of State [Page 176]W. Q. Gresham to the President of the United States, of October 12, 1894, a copy of which was communicated to this embassy in a note of December 7, 1894, and may be found printed on pages 236 and 239 of the proper volume of Foreign Relations for the year 1894. The President of the United States explicitly concurred in this view of the Secretary of State by recommending to Congress in his annual message of December, 1894, the repeal of the additional duty upon German sugar. The Imperial Government may, therefore, entertain the hope that the Government of the United States will exert every endeavor to explain to Congress the importance of the existing treaty obligations between Germany and the United States, and the consequences to be adduced therefrom, in order to prevent the proposed provision concerning the addition of the amount of the German export bounty to the duty upon German sugar from becoming a law in violation of treaty obligation.

On this occasion 1 may invite your excellency’s attention to another point which my predecessor in 1894 only touched upon. On August 22, 1891, declarations were exchanged at Saratoga between Mr. von Mumm, the Imperial chargé d’affaires ad interim, and Mr. John W. Foster, specially empowered by the United States, which had on the one part the importation of German sugar into the United States in view, and on the other the importation of American pork into Germany. The United States made as the basis of these declarations the admission, free of duty, of German sugar, pursuant to the tariff act of October 1, 1890. The tariff act of August 28, 1894, had already shifted in an unfavorable way for Germany the premises upon which the exchange of these notes were effected and they would be changed still more to the disadvantage of Germany if the present bill, now before Congress, should without amendment concerning sugar become a law. The Imperial Government would in such event be compelled to regard the premises as defective upon which the German declarations had been based in the correspondence exchanged in August, 1891, arid it would, moreover, be confronted with the question whether those advantages should be further continued which it had hitherto extended to the United States by applying to the importations from that country, especially with regard to its agricultural products, the minimum tariff established by the customs treaties concluded between the German Empire on the one hand and Austria-Hungary and several other States on the other.

With respect to the advantages which the United States and especially its agriculture has been afforded by these reduced duties, I may refer to the note of Mr. von Mumm, chargé d’affaires ad interim, of December 10, 1891, in the annex to which the duty rates of the general German tariff are contrasted with the treaty tariff. This note will be found printed as an annex to the proclamation of the President of the United States of February 1, 1892.

Accept, etc.,

Thielmann.