653.116/33
The Secretary of State to the Minister in Portugal (Dearing)
Sir: There is enclosed a copy of a letter dated December 2, 1927, from the Chairman of the United States Shipping Board1 in which information is requested concerning the Portuguese regulations whereby a customs rebate of ten per cent is allowed on all classes of cargo landed or loaded by Portuguese vessels. It is pointed out that the Shipping Board operates the only direct service between the Gulf ports of the United States and Portugal and that tobacco shipments from those ports will no doubt be diverted to a northern European port for transshipment to Portuguese vessels in order to take advantage of the customs rebate.
The Department understands that in the trade between Portugal and foreign countries a rebate of ten per cent in import duties and twenty per cent in export duties is allowed on cargo carried in Portuguese vessels. You are requested to verify the foregoing statement and, with the cooperation of the Consul General, to submit a full report giving any further data which may be considered pertinent in response to the Shipping Board’s inquiry. In particular you should ascertain definitely whether the discriminatory import duties on tobacco or other products imported from the United States or other foreign countries would apply when the only portion of the transportation service performed by Portuguese vessels is that from a European port of transshipment to Portugal. You should also furnish such information as may be readily obtainable respecting the import duties applicable to tobacco, and any special laws or regulations to which the importation of this product may be subject. In this connection reference is made to the Legation’s despatch No. 43 of August 29, 1924,1 on the subject of the Portuguese tobacco monopoly and the increase in duties on imported manufactured tobacco. Supplemental [Page 769] information on this subject giving any recent developments in the situation might prove useful to the Shipping Board.
In the event that no indication has been received by the Legation that a favorable response will soon be made to our representations respecting the discriminations against American shipping, you should again take up the matter with the appropriate authorities. You should point out that a year has elapsed since this question was brought to their attention, and strongly urge favorable action in the matter. The Department desires your further report on this subject.
If you consider it necessary you should make it clear in any discussion of this question with the Portuguese authorities that your representations relate not only to the failure of Portugal to accord national treatment in respect of port charges applicable to American vessels, but to discriminatory import duties applicable to the cargoes of such vessels as well.
I am [etc.]