Minister Leishman to the Secretary of State.

No. 1031.]

Sir: I beg to confirm the telegram sent you this day regarding proposed increase in the Turkish customs rate, as per copy on overleaf.

The question of increasing the duties from 8 to 11 per cent has been a matter of negotiations between the Sublime Porte and the European powers for the past two years, and has now reached a point when definite action will probably be taken, but up to the present time the legation has not been approached, notwithstanding the assurance given me by the minister for foreign affairs many months ago that the American Government would of course be consulted. * * *

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Although resting under the impression that the Department would not under ordinary circumstances be disposed to object to a reasonable increase in the import duties into Turkey, I feel quite certain that you would not feel disposed to accept any increase in the rates in the absence of a proper understanding and agreement.

In the negotiations with the European powers they have all demanded concessions of one kind or another as the price of their consent to the 3 per cent increase; for example, the Germans have indicated that they would agree to the increase providing a certain portion of the additional revenue was set aside to help pay the kilometric guarantee on the Bagdad railway, etc.; the French demanded settlement of dispute concerning Syrian railway and the quays at Constantinople, etc.; the English, the settlement of certain mining claims, concession concerning gendarmerie in Macedonia, etc., and my idea was that if the United States Government was willing to accept the increase that, if the matter was left entirely in the hands of the legation, possibly I might be able to facilitate the execution of the school settlement and other pending questions by temporarily withholding consent to the proposed new schedules.

Having learned through one of my colleagues that the matter was being actively pushed and that a final settlement was apt to be reached in the near future, I thought wise to cable you as above, fearing that the Sublime Porte might possibly approach you direct through the Ottoman minister at Washington before my dispatch explaining existing conditions could reach you.

Awaiting your advices and instructions,

I have, etc.,

John G. A. Leishman.