Mr. Day to Mr. Buck.
Washington , June 10, 1897 .
Sir: Your No. 488 of the 12th ultimo crossed the Department’s instruction No. 415 of the 2d instant, in regard to the recently proclaimed Japanese law for the encouragement of the direct export of native silk by payment of a bounty to native exporters.
It is now observed that you had already had the subject under consideration for some weeks, and that as early as April 17 you had, in your capacity as dean of the diplomatic corps, answered the representations made April 8 by the committee of the Yokohama General Chamber of Commerce “that the foreign representatives do not consider that it would be expedient, under existing treaties, for them, as a body, to make any representation whatever to His Imperial Japanese Majesty’s Government in the matter.”
This negative reply is sufficiently conditioned to leave your legation free to make such representations as the several interests of the United States and the stipulations of our existing (but not yet operative) treaty may require. The Department’s No. 315 will have shown you the view here entertained as to the nature and effect of the Japanese act. That view is not essentially modified by the receipt of Mr. Hoshi’s reply of June 4, a copy of which is inclosed for your information. It has been acknowledged for the time being, reserving consideration of its statements and representations.
That part of Mr. Hoshi’s note which conveys Count Okuma’s disclaimer of intention to discriminate against foreigners engaged in the exportation of raw silk is not entirely clear to this Government, especially as to the alleged necessity of limiting the present enjoyment of the bounty to native Japanese because “penalties must necessarily form a part of the law, and since it would be impossible to enforce those penalties against foreigners while consular jurisdiction continues to exist.” The penal provisions in question relate to any person fraudulently receiving a bounty or attempting to violate the act. As the bounty is only payable after the prescribed governmental inspection shall have established the origin, weight, and fineness of the silk presented for export, it would seem that the Government exercises abundant control and can effectually prevent the payment of a bounty to which the silk itself may not be lawfully entitled, and if the silk be properly bountiable, the only practicable fraud on the part of the exporter would consist in his not being a native Japanese. Whichever way it be regarded, the penal provision operates as a direct and additional means of preventing the enjoyment of a bounty by a foreigner, so that Article III in fact undertakes to subject a foreigner to a penalty which Mr. Hoshi’s note admits can not be enforced. The restriction of the export bounty to natives is not so much a consequence of the necessity for the penal provision of Article III, as that penal provision itself is a necessary expansion of the monoply which Article I seeks to create for native Japanese. Mr. Hoshi’s argument simply reverses the logical association of the two propositions. Were the bounty enjoyable by foreigners and natives alike, fraud in obtaining it would be practically impossible, for the governmental regulations and inspection can, as has been said, fully establish the right of the silk to be bountied. As it stands, if it means anything, Article III means, first, that a foreigner, or a Japanese subject standing in the place of a foreign owner, is punishable if the bounty be actually paid; and, secondly, [Page 447] that a foreigner, or a native in his stead, offering export silk for inspection, is liable to punishment for an attempt to violate this act.
If, as Mr. Hoshi says in Count Okuma’s name, the Imperial Government admits that the bounty, if continued after July 17, 1899, must be applicable to the citizens or subjects of the treaty powers equally with Japanese subjects, it must necessarily admit that prior to that date a differential treatment adverse to foreigners will exist. It, in fact, does make this admission by arguing that the discrimination is calculated only to affect the highest grades of silk, and those in comparatively small quantities; and it may be noticed that it is also admitted that the purpose of the act is to stimulate and increase the export trade in those high grades. While it may not be practicable to measure the volume of the monopolistic traffic which the act aims to create, it is obvious that it must reduce the foreign trade, and that, if successful, this act will build up by the 17th day of July, 1899, a special trade which the foreign trade can not easily regain, and which native interests will tend to fortify through fresh and favoring legislation. It is not a question of the greater or less amount of the injury that may be wrought to legitimately established interests of United States citizens in the meantime—it is the contingency of any injury whatever being caused that justifies this Government in making earnest remonstrances against this measure, because it is a blow at the privilege which we have bargained to enjoy at a future date, and because the enforcement of this act will impair Japan’s ability to deliver at that time the stipulated measure of equal privilege.
Respectfully, yours,
Acting Secretary.