882.802 Lloyd Brasileiro Navigation Co./30

The Ambassador in Brazil (Morgan) to the Secretary of State

No. 3591

Sir: Continuing the subject of Department’s telegram to the Embassy, No. 20 of March 20 last 6 P.M., and of the Embassy’s telegram to the Department, No. 24 of April 29 last 3 P.M., I have the honor to enclose the Portuguese text, accompanied by an English translation, of Federal Decree No. 19,6822 which was published in the Official Gazette on April 28, 1931. The first edition of this decree was published in the Official Gazette two months before, namely, on February 12, 1931.

In the new version Article 7th to which our Shipping Board has taken exception has not been altered, and acts as an amendment to the Brazilian consular fees established in Decree 19,546 of December 30, 1930. But according to the statement which the Minister for Foreign Affairs has made to me, this clause should be regarded not as a discrimination against foreign shipping companies, but as a form of subvention which the Brazilian Government grants to the Lloyd Brasileiro Steamship Line, which may be considered as an integral part of the national patrimony, because almost all its shares are held by the Federal Government.

The Foreign Minister also stated that the decree does not establish special favors at Brazilian ports for Brazilian vessels, nor does it create a difference of treatment between ships flying foreign or Brazilian flags, nor restrict the rights of foreign steamship companies. The same explanation has been given to the representatives of other Nations whose ships frequent Brazilian ports, notably to the Swedish and Norwegian Ministers to whom the Foreign Minister stated that the discount of 50 per cent which Brazilian consuls grant to shippers who give preference to shipments by the Lloyd Brasileiro boats should be regarded as a legitimate act of Brazilian sovereignty which does not imperil the rights of other nationals.

As the Department is aware, Portugal has granted a rebate in duties to merchandise shipped into Portugal in Portuguese bottoms and [Page 878]though British shippers and shipping companies have protested,3 they have apparently not succeeded in carrying their point.

Respectfully yours,

Edwin V. Morgan
  1. Enclosures not printed.
  2. See despatch No. 3027, March 21, 1930, from the Chargé in Portugal, Foreign Relations, 1930, vol. iii, p. 782.