Mr. Townsend to Mr. Hay.

No. 127.]

Sir: I have the honor to transmit herewith two official copies, together with a translation, of the sugar convention signed at Brussels, March 5, 1902, at 6 p.m.

I have, etc.,

Lawrence Townsend.

Convention concerning the sugar régime.

His Majesty the Emperor of Germany, King of Prussia, in the name of the German Empire; His Majesty the Emperor of Austria, King of Bohemia, etc., and Apostolic King of Hungary; His Majesty the King of the Belgians; His Majesty the King [Page 81] of Spain, and, in his name, Her Majesty the Queen Regent of the Kingdom; the President of the French Republic; His Majesty the King of the United Kingdom of Great Britain and Ireland and the British Possessions beyond the seas, Emperor of India; His Majesty the King of Italy; Her Majesty the Queen of the Netherlands; His Majesty the King of Sweden and Norway,

Desiring, on one hand, to equalize the conditions of competition between beet and cane sugars from different sources, and, on the other hand, to promote the development of the consumption of sugar;

Considering that this double result can only be attained by the suppression of bounties as well as by limiting the surtax;

Have resolved to conclude a convention to this end; and have nominated their plenipotentiaries as follows, to wit:

His Majesty the Emperor of Germany, King of Prussia, in the name of the German Empire: Count de Wallwitz, his envoy extraordinary and minister plenipotentiary to His Majesty the King of the Belgians, etc.

Article First.

The high contracting parties bind themselves, from the date the present convention comes into force, to suppress the direct and indirect bounties by which the production or export of sugar may benefit, and they agree not to establish bounties of this kind during the whole duration of the said convention. In view of the execution of this provision, sweetmeats, chocolates, biscuits, condensed milk, and all other analogous products which contain in a notable proportion sugar artificially incorporated, are to be classed as sugar.

The above paragraph applies to all advantages resulting directly or indirectly, for the different categories of producers, from the fiscal legislation of the States, notably:

The direct bounties granted to exports.
The direct bounties granted to production.
The total or partial exemptions from taxation granted for a part of the manufactured output.
The profits derived from surplusages of output.
The profits derived from the exaggeration of the drawback.
The advantages derived from any surtax in excess of the rate fixed by article 3.

Article Second.

The high contracting parties bind themselves to submit to bond régime the sugar factories and refineries, as well as those factories in which sugar is extracted from the molasses, in order that they shall be under the permanent surveillance, day and night, of the customs employees.

With this object, factories will be arranged in such way as to prevent the taking away of sugar clandestinely, and the customs employees will have the right to enter every department of the factories.

Books of control in regard to any or several phases of production will be kept and the manufactured sugars will be deposited in such special buildings as will afford every desirable guaranty of security.

Article Third.

The high contracting parties bind themselves to limit the surtax to a maximum of 6 francs per 100 kilograms for the refined sugar and the sugars assimilable thereto, and 5.50 francs for other sugars; that is to say, the difference between the rate of duty or taxation to which foreign sugars are subjected and that imposed on the home product.

This provision is not to be applied to the rates of import duties in the case of countries that do not produce sugar, nor to the by-products of the manufacturing or refining of sugar.

Article Fourth.

The high contracting parties bind themselves to impose a special duty on imports into their respective territories, of sugars from countries that grant bounties for production or export.

This duty shall not be less than the amount of the bounties, direct or indirect, granted in the country of origin. The high parties reserve to themselves the privilege, each as it may affect its own interests, to prohibit the importation of bounty-fed sugars.

[Page 82]

For the estimation of the sum of advantages derived eventually from the surtax specified under section (f) of article 1, the rate fixed by article 3 is deducted from the amount of this surtax; half of the difference is held to represent the bounty, the permanent commission organized under article 7 being entitled, at the request of one of the contracting States, to alter the rate so provided for.

Article Fifth.

The high contracting parties bind themselves reciprocally to admit at the lowest of their respective import rates, sugars imported from any of the contracting States or from any colonies or possessions of saici States, that do not grant bounties and to which the obligations imposed in article 8 apply.

Cane and beet sugars can not be subjected to different rates of duty.

Article Sixth.

Spain, Italy, and Sweden are not held to the obligation imposed in articles 1, 2, and 3, so long as they do not export sugar.

These States bind themselves to adapt their sugar legislation to the provisions of the convention within one year or earlier, if possible, from the time that the permanent commission has verified that the above condition has ceased to exist.

Article Seventh.

The high contracting parties agree to create a permanent commission, having charge of the surveillance of the execution of the provisions of the present convention.

This commission shall be composed of delegates of the different contracting States, and to it will be attached a permanent bureau. The commission elects its president; it will sit at Brussels and shall meet on the call of the president.

The duties of the delegates will be:

To verify whether in the contracting States any direct or indirect bounty for the production or export of sugars is granted.
To verify whether the States named in article 6 continue to conform themselves to the provisions of this article.
To verify the existence of bounties in the nonsignatory States, and to estimate the amount of such bounties with a view to applying the provisions of article 4.
To issue an advice on litigious questions.
To examine the requests for admission to the union from States which have not participated in the present convention.

To the permanent bureau is intrusted the compilation, translation, coordination, and publication of information of all kinds relating to the legislation and statistics of sugars, not only in the contracting States but also in other States.

To secure the execution of the above provisions, the high contracting parties shall communicate, through the diplomatic channel, to the Belgian Government, which will transmit them to the commission, copies of the laws, decrees, and regulations relating to the taxation on sugars that are or may be in operation in their respective countries, as well as statistical information relating to the object of the present convention.

Each of the high parties is entitled to be represented on the commission by a delegate or by a delegate and associate delegates.

Austria and Hungary shall be considered separately as contracting parties.

The first meeting of the commission shall take place at Brussels, on the call of the Belgian Government, at least three months before the present convention comes into force.

The duties of the commission shall be confined to verification and examination. It will make a report to the Belgian Government on all questions submitted to it. Said report will be communicated to the interested States by the Belgian Government, and the latter shall, if requested so to do by any of the high contracting parties, promote a meeting of a conference which shall decide on the resolutions or the measures necessary under the circumstances.

The verification and estimations, however, under Sections B and C shall have a binding character for the contracting States; they shall be established by a vote of the majority, each contracting State disposing of one vote, and they shall come into effect, at the farthest, at the expiration of a period of two months.

In case one of the contracting States were to appeal from the decision of the commission, it shall have to promote, within eight days after the notification of the said decision, a new deliberation of the commission; the latter shall meet under urgent [Page 83] call and shall decide definitely within a period of one month from the date of the appeal.

The new decision shall be executory, at the latest two months after its date. The same procedure shall be followed in regard to the examination of requests for admission under the provisions of Section E.

The expenses arising from the organization of the permanent commission—except the salary and the compensations of the delegates, which are to be paid by their respective countries—shall be borne by all the contracting States, and shall be assessed among them according to a method to be decided upon by the commission.

Article Eighth.

The high contracting parties bind themselves on their behalf and on behalf of their colonies and possessions, exception being made in the case of the autonomous colonies of Great Britain and British East Indies, to resort to the measures necessary to prevent bounty-fed sugar, which has passed through the territory of a contracting State, from having the same advantages as those accruing under the convention on the market they are destined for. The permanent commission shall present in this connection the necessary propositions.

Article Ninth.

The States that have not taken part in the present convention shall be admitted to adhere thereto, upon request and after a favorable report of the permanent commission.

The request shall be addressed through the diplomatic channels to the Belgian Government, which will take charge, eventually, of notifying the adhesion to all the other governments. The adhesion shall involve, in full right, the accession to all charges and the admission to all advantages enumerated in the present convention, and it shall enter into force from the 1st of September following the transmission of the notification by the Belgian Government to the other contracting States.

Article Tenth.

The present convention shall come into force from September 1, 1903.

It shall remain in force during five years from this date, and if none of the high contracting parties shall have notified the Belgian Government, twelve months after the expiration of the said period of five years, of its intention to have its effects cease, it shall continue for one year, and so on from year to year.

In case one of the contracting States were to denounce the convention, this denunciation shall take effect only as it may affect its own interests, the other States would retain until the October 31 of the year of the denunciation the privilege of notifying their intention to also retire on September 1 of the following year. If one of the latter intended to make use of this privilege, the Belgian Government is to promote a meeting at Brussels, within three months, of a conference which would have to determine the measures to be resorted to.

Article Eleventh.

The provisions of the present convention shall apply to the provinces beyond the seas, colonies, and foreign possessions of the high contracting parties. The colonies and possessions of Great Britain and the Netherlands, however, are not to be included in this regulation, except as far as it is provided in articles 5 and 8.

The status of the colonies and possessions of Great Britain and the Netherlands is, moreover, defined by the declarations inserted in the final protocol.

Article Twelfth.

The execution of the reciprocal engagements contained in the present convention is subjected, inasmuch as need be, to the performance of the formalities and rules established by the constitutional laws of each of the contracting States.

The present convention shall be ratified, and ratifications thereof shall be deposited at Brussels, at the ministry of foreign affairs, on February 1, 1903, or earlier, if possible.

It is understood that the present convention shall only become binding after it has been ratified at least by the contracting States that have not been affected by the exceptional provision of article 6. In case one or several of the said States have not deposited their ratifications within the time provided for, the Belgian Government [Page 84] shall immediately endeavor to obtain a decision from the other signatory States as to the entering into force of the present convention among themselves.

In faith of which the respective plenipotentiaries have signed the present convention.

Done at Brussels, in one single copy, the 5th day of March, 1902.

Final protocol.

At the moment of proceeding to the signature of the convention relating to the régime of sugars entered into on this date by the Governments of Germany, Austria and Hungary, Belgium, Spain, France, Great Britain, Italy, The Netherlands, and Sweden, the undersigned plenipotentiaries have agreed to the following:

To Article Third.

Considering that the purpose of a surtax is to protect efficaciously the internal market of producing countries the high contracting parties reserve the right, each as it affects its own interests, to propose the increase of the surtax in case that considerable quantities of sugars from one of the contracting States should enter their countries, this increase to affect only the sugars coming from that State.

This proposition shall be addressed to the permanent commission, which will decide within a short delay by a vote of the majority, upon the true foundation of the proposed measure, upon the duration of its application, and upon the rate of the increased tax, the latter not to exceed 1 franc per 100 kilograms.

The adhesion of the commission can only be given in case the invasion of the market in question should be the result of an economical condition of real inferiority and not the result of a fictitious increase of prices promoted by an understanding among producers.

To Article Eleventh.

A. First. The Government of Great Britain declares that no direct or indirect bounty shall be granted to sugars from colonies of the Crown during the existence of the convention.

Second. It declares also, by exceptional measure and while still reserving, in principle, its entire free action concerning the fiscal relations between the United Kingdom and its colonies and possessions, that during the existence of the convention no preference shall be granted in the United Kingdom to colonial sugars vis-a-vis the sugars coming from the contracting States.

Third. It declares that they will submit the convention to the autonomous colonies and to the East Indies in order that the latter may have the privilege of giving their adhesion thereto.

It is understood that the Government of His Britannic Majesty shall have the right to adhere to the convention in the name of the Crown colonies.

B. The Government of The Netherlands declares that, during the existence of the convention, no bounty either direct or indirect shall be granted to sugars of the Dutch colonies, and that these sugars shall not be admitted into The Netherlands at a less rate than is applied to sugars coming from the contracting States.

The present final protocol, which shall be ratified at the same time as the convention concluded this date, shall be considered as an integral part of said convention, and shall have the same force, value, and duration.

In faith of which the undersigned plenipotentiaries have drafted the present protocol.

Done at Brussels, the 5th day of March, 1902.