The Minister in Portugal (South) to the Secretary of State

No. 718

Sir: With reference to my despatch No. 496 of November 7, 1931,21 and to previous correspondence on the subject of flag discrimination, I have the honor to enclose herewith a copy of a letter22 from my British colleague, Sir Claud Russell, and a copy of a note which I have deemed it incumbent upon me to address to the Minister for Foreign Affairs in order to go on record at the present time as protesting against Portugal’s continued inactivity in respect of the abolition of discriminatory [Page 650] duties to which she is committed in principle. I have acquainted my British colleague with the text of this note.

Respectfully yours,

J. G. South

The American Minister (South) to the Portuguese Minister for Foreign Affairs (Mendes)

No. 384

Excellency: With reference to the abandonment in principle of the policy of levying discriminatory duties announced by Your Excellency’s Government under the terms of Decree No. 20,304 of September 12, 1931,23 I have the honor to bring to Your Excellency’s attention my note No. 260 of October 19, 1931,24 in which I had the honor, acting under instructions from my Government, to inform Your Excellency’s distinguished predecessor, Captain Branco, that, in the absence of information from Your Excellency’s Government in respect of its plans for rendering effective in fact the abolition of discriminatory rates, my Government would reluctantly be forced to the conclusion that the decree in question appeared to represent an inadequate remedy for the inequalities practised.

Under date of November 4, 1931, (Processo No. 78/27)25 His Excellency Captain Branco replied at length to the representations to which I have made reference hereinabove. From this note, I venture to quote in translation the following pertinent passages:

“With reference to the Legation’s note No. 260 of October 19, last, I have the honor to inform you that the Government of the Republic, faithful to the principle expressed in Decree No. 20,304, is endeavoring to adopt all measures for the early extinction of the customs bonus by which the Merchant Marine has been benefited and under which there has been created a state of affairs the immediate suppression of which would gravely affect national economics.”

“The good faith of the Portuguese Government thus becomes evident from the conciliation of all points of view and interests to the extent which is just and reasonable. And under such a criterion, doubt cannot be cast upon the efforts employed for the rapid realization of a complete plan of protection of the national merchant marine (Decrees Nos. 20,321 of September 18, 1931, 20,333 of September 22, 1931, and others under consideration) which through its effects may render possible the gradual suppression of the customs bonus in harmony with the general provisions set forth in Decree No. 20,304.”

[Page 651]

Now, however, Your Excellency’s Government, instead of providing for further reductions looking toward the total extinction of discriminatory duties in conformity with the terms of Article 1 of Decree No. 20,304, has suspended (by Decree No. 21,670 of September 19, 1932) Decree No. 20,333 of September 22, 1931,—one of the very decrees cited by Captain Branco as evidence of the good faith of Your Excellency’s Government in its expressed determination to render effective in fact the abolition of discriminatory rates to which it is committed in principle.

Under the circumstances, I venture to submit that the course of the negotiations which have taken place on the subject under discussion would appear to justify my Government in the expectation of a further reduction in the discriminatory duties applicable to the fiscal year 1932–1933.

Accept [etc.]

J. G. South
  1. Ibid., p. 972.
  2. Not printed.
  3. Foreign Relations, 1931, vol. ii, p. 967.
  4. For substance of note, see telegram No. 24, October 16, 1931, to the Minister in Portugal, ibid., p. 970.
  5. Ibid., p. 973.