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Mr. Thompson to Mr. Gresham.

No. 246.]

LEGATION OF THE UNITED STATES,

Petropolis, June 10, 1894. (Received July 14.) SIR: I have the honor to acknowledge the receipt of your telegram of the 6th instant, with regard to the refunding of certain

duties collected by the Government of Brazil on wheat flour.

I have brought this matter to the attention of the Government, as directed, and am awaiting a reply. I have, etc.,

Thos. L. THOMPSON.

Mr. Gresham to Mr. Thompson.

No. 176.]

DEPARTMENT OF STATE,

Washington, September 28, 1894. SIR: Referring to the Department's telegram of June 6 last regarding the refunding by Brazil of duties collected on flour previously to April 12, 1893, I inclose herewith in original a letter from the Secretary of the Treasury, together with one from Mr. W. B. Wilson, of Baltimore, having reference to the admission into the United States of inportations from Brazil. By the letter of the Secretary of the Treasury you will see that no fees for permits or bonds have been collected on the entry of goods from that country since the date of the reciprocity agreement, such fees having, in fact, been abolished by section 22 of the act of June 10, 1890, while the proclamation of the President in regard to the modification of the tariff law of Brazil was dated February 5, 1891.

You will use this statement of the Treasury in pressing earnestly for the return of the charges made by the Brazilian Government, contrary to the letter and spirit of the agreement, which has been faithfully observed by the United States. I am, etc.,

W. Q. GRESHAM.

(Inclosure 1 in No. 176.]

Mr. Carlisle to Mr. Gresham.

TREASURY DEPARTMENT, Washington, September 27, 1894. (Received September 28.) Sir: Referring to the letter addressed to Assistant Secretary Rockbill by Mr. W.B. Wilson, dated Baltimore, Md., the 26th instant, in regard to importations from Brazil, I can assure you that no fees for permits or bonds have been collected on the entry of goods imported from that country since the date of the reciprocity agreemnent, such fees having, in fact, been abolished by section 22 of the act of June 10, 1890, while the proclamation of the President in regard to the modification of the tariff law of Brazil, was dated February 5, 1891. The letter of Mr. Wilson is returned herewith. Respectfully, yours,

J. G. CARLISLE.

(Inclosure 2 in No. 176.)

Mr. Tilson to Mr. Rockhill.

BALTIMORE, September 26, 1894. (Received September 28.) MY DEAR MR. ROCKHILL: In my interview with Mr. Mendonça this morning he stated to me that about the 6th of September he received a cable inquiry from his Government to know whether the articles enumerated as “free” in the reciprocity treaty had been admitted free of any duty or custom-house charges whatsoever by this Government; to which be replied by cable on the 8th of September from Ports* mouth, N. H., that not only had these goods been admitted free of duty, but that the customary fee of 10 cents for periit and 40 cents for bond had also been abolished, leaving such goods absolutely free of any charge whatever. This cablegram, he assures me, reached Rio the same day, but up to this time no action has been taken by the Brazilian Government, or we would have been apprised of the fact by cable. I now inclose the copy of letter addressed to Minister Thompson by our friends at Rio, and will be glad if you will see that a certificate is sent to-morrow from the State Department, in effect that all goods from Brazil which were exempt from duty under the reciprocity treaty have, since the ratification of the treaty, received entry absolutely free from any charge whatever: that even the charges of 10 cents for permit and 40 cents for bonds have been abolished.

Be good enough to mark per S. $. Coleridge, which is a very fast boat and sails from New York Saturday morning early. It would also hurry matters very much if you would request Mr. Thompson by cable to push the matter. Our experience with the Brazilians has shown that the effect of cable is twofold that of a mail communication, and I am sure with all the required evidence before them they would have no further excuse for delay. I will appreciate it very much if you will get the Secretary's permission to cable. Yours, sincerely,

W. B. WILSON.

Mr. Gresham to Mr. Thompson.

(Telegram.)
DEPARTMENT OF STATE,

Washington, November 26, 1894. Mr. Gresham instructs Mr. Thompson to press the refund of duty on flour in accordance with instruction No. 176, and if necessary,

to see the President in regard to the matter. A telegraphic answer is requested.

Mr. Thompson to Mr. Gresham.

[Telegram.]

LEGATION OF THE UNITED STATES, Petropolis, November 29, 1994. (Received November 30.) The new minister for foreign affairs has flour claims under consideration, and promises definite conclusion in a few days.

RECIPROCITY ARRANGEMENT.

Mr. Gresham to Senhor Mendonça.

DEPARTMENT OF STATE,

Washington, August 29, 1894. MY DEAR MR. MENDONÇA: I received yesterday your important letter of the 25th instant. I think it clear that the reciprocity arrangement between Brazil and the United States was terminated by the going into force of our existing tariff law, and I do not think the Executive Departments can act upon any other theory.

This is the view of the Secretary of the Treasury.

The so-called treaties or agreements that were entered into based upon the third section of the McKinley bill were not treaties binding upon the two Governments, and the present law is mandatory. Notice to your Government that the arrangement would terminate as provided by its terms would have no force, as the arrangement actually exists no longer. Very truly yours,

W. Q. GRESHAM.

Mr. Thompson to Mr. Gresham.

(Telegram.) PETROPOLIS, September 22, 1894. (Received Sept. 24.) Minister for foreign affairs officially informs me that it is the intention of the President to terminate reciprocity treaty on January 1 proximo.

Mr. Thompson to Mr. Gresham.

No. 291.]

LEGATION OF THE UNITED STATES,

Petropolis, September 22, 1894. (Received Oct. 24.) SIR: I inclose memorandum of a conversation I had with the director-general of the foreign office on the 20th instant. The memorandum outlines the probable action of the Brazilian Government in regard to the commercial arrangement in view of the recent changes in our customs duties.

I also inclose copy of a letter from Consul-General Townes upon the same subject, complaining that orders for American goods are being canceled on account of the possible discontinuance of the arrangement. I have, etc.,

Thos. L. THOMPSON.

[Inclosure 1 in No. 291.)

MEMORANDUM.

During an interview with the director-general of the foreign office the Viscount Cabo Frio, referring to the recent passage of the new tariff bill by Congress, stated, unsolicited, that in view of the fact that all sugars were made dutiable it was the present intention of the Brazilian Government to give notice on October 1 signifying a desire to terminate the commercial arrangements now existing between it and that of the United States. The notice would be given in accordance with the provisions of the arrangement requiring three months' notice in advance, and would be made so as to take effect on January 1, 1895. This action was regarded necessary in order to avoid questions and disputes which would be likely to result in reclamations against the Government. Regret was expressed that it had been impossible for Congress to delay the operation of the sugar schedule, so that the denunciation could have been made as the correspondence on the subject stipulated, but indicated that the Government was in no way displeased that the matter would soon come to an end. That there was a large party in Brazil violently opposed to the arrangement and that its early termination would in all respects be satisfactory.

The conversation was unofficial, and the above can only be regarded as the present intention of the Government, which may bo changed. LEGATION OF THE UNITED STATES,

Petropolis, September 21, 1894.

[Inclosure 2 in No. 291.]
Mr. Townes Mr. Thompson.

CONSULATE OF THE UNITED STATES,

Rio de Janeiro, September 19, 1894. Sir: Further considering the subject of tariff changes between Brazil and the United States, I beg to advise that quite a number of merchants of this city have daily called upon me and made inquiries as to the probable effect the recent changes in our tariff would have upon articles exported from the United States to this country. The newspapers of Rio have been publishing articles on the subject, and I understand the papers at Pernambuco are urging the abrogation of the rights of commerce which our country enjoys under the reciprocity treaty.

I have received a copy of the Journal of Commerce of New York, in which is given in full the schedule of the new tariff in the United States. From a casual perusal of the same I note that there have been some changes in our tariff which should prove quite beneficial to Brazil. The rate on tallow has been reduced from 2 cents to 1 cent per pound, nuts from 5 cents to 3 cents per pound, while coffee, rubber, hoofs, horns, hides, and grass fibers all remain free, as heretofore.

Taking the exports from this country to the United States at an approximate total of one hundred millions of dollars annually, it appears that only about 4 per cent of that aniount is sugar, while 96 per cent is either free or reduced in rate under the new tariff.

The district of Pernambuco alone will be affected unfavorably by our new tariff, As we are beginning to establish a most satisfactory trade for American goods here, and as the general sentiment of this country is now most favorable to American interests, I beg to suggest that, if expedient, you will take some action looking toward quieting the rumor afloat in the city to the effect that Brazil will soon put all of our exports here upon equal footing with other countries.

Foreign merchants in this city are now doing all they can through that channel to have orders for American goods canceled and to forestall the taking of further orders, as I am advised by American houses resident here and their agents. If it is possible to procure from the present Administration some indication that our country will continue to enjoy the present tariff schedule, it would be quite beneficial to American interests here, while if a treaty could be negotiated along these lines it would ultimate y result in largely increased exports of our goods. I remain, etc.,

WM. T. TOWNES,

Consul-General,

Senhor Mendonça to Mr. Gresham.
LEGATION OF THE UNITED STATES OF BRAZIL,

Washington, September 24, 1894. SIR: The tariff law of the 28th of August ultimo having abrogated the commercial agreement entered into on January 31, 1891, by the United States of Brazil and the United States of America, I have the honor to communicate to your excellency that my Government has informed his excellency Thomas L. Thompson, minister of the United States of America at Rio de Janeiro, of its intention and decision to denounce said commercial agreement, and has directed me to communicate to your excellency that, in virtue of the stipulation contained in the notes exchanged between the negotiators of said international agreement, and dated January 31, 1891, it deems it necessary to definitely inform your excellency of its intention and decision to consider at an end said commercial agreement in accordance with the stipulation therein contained regarding its duration, so that the termination of said agreement shall begin to take effect on the 1st day of January, of the year 1895.

I am sure that the cessation of our reciprocity agreement will in no wise affect the commercial relations of our countries, considering that their mutual interests and spirit of cordial friendship now rest on a firmer basis than a written contract. Accept, etc.,

SALVADOR DE MENDONÇA.

Mr. Gresham to Senhor Mendonça.

DEPARTMENT OF STATE,

Washington, October 26, 1894. SIR: I have had the honor to receive your note of the 24th ultimo, in which you inform me that your Government, in view of the abrogation of the commercial arrangement between the two countries by the tariff law of the 28th of August last, has directed you to communicate to me the fact that, “in virtue of the stipulation contained in the notes exchanged between the negotiators of the said international agreement, and dated January 31, 1891, it (the Government of Brazil) deems it necessary” definitely to inform ‘me of “its intention and decision to consider at an end said commercial agreement, in accordance with the stipulation therein contained regarding its duration, so that the termination of said agreement shall begin to take effect on the 1st day of January of the year 1895."

In concluding your note you express the assurance that “the cessation of our reciprocity agreement will in nowise affect the commercial relations between our two countries, considering that their mutual interests and spirit of cordial friendship now rest on a firmer basis than a written contract.”

This satisfactory and well-founded assurance, in which the President directs me to say that he fully concurs, would seem to render any comment on your note superfluous, if it were not for your previous statement that your Government, notwithstanding the abrogation of the arrangement in question by the act of August 28, deems it necessary, in accordance with the stipulations contained in the notes exchanged on January 31, 1891, to give notice of its intention to consider the arrangement as terminated on and after the 1st of January next.

By section 104 of the act of August 28, section 3 of the act of 1890, under which the commercial arrangements with Brazil and certain other countries were negotiated, was repealed; but it was also provided that nothing in the repealing section should be held to abrogate or affect such arrangements, except where they were inconsistent with the provisions of the new law. Notice, therefore, of an intention to terminate those arrangements was not contemplated by the new law;

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