gold, or the equivalent in currency, per bag of 60 kilos of coffee, American type No. 7, during the first year; this price may later be raised to the maximum of 70 francs, according to the conveniences of the markets.

For the higher qualities, according to the American classification, the prices indicated will be augmented proportionally during the same periods.

ART. 2. The contracting governments will endeavor to prevent by adequate measures the exportation to foreign countries of coffee inferior to type No. 7, while favoring as far as may be possible the development of their consumption within this country.

ART. 3. The contracting States oblige themselves to organize and maintain a regular and permanent service of coffee propaganda with the object of increasing the consumption, by the development of the actual markets, by the opening and conquest of new ones, and by defensive measures against fraud and falsification.

ART. 4. The contracting governments, whenever it may be judged opportune, will establish national types, promoting the creation of exchanges of syndical chambers for the coffee trade; in accordance with these types will then be fixed the prices referred to in article 1.

ART. 5. Means will be placed at the disposal of producers for improving the quality of their product by mechanical treatment.

ART. 6. The contracting governments bind themselves to create a surtax of three francs (subject to augmentation or diminution) per bag of coffee exported by any of their States, and also to maintain the laws which impede by sufficiently high taxes the increase of the areas of land planted with coffee within their territories during the period of two years.

ART. 7. The products of the surtax, referred to in the preceding article, will be collected by the union, and is destined to the payment of interest and amortization of the capital necessary for the execution of this convention, the surpluses being applied to defray the expenses demanded by the services of the said convention, and the collection of the surtax will begin after the realization of the dispositious contained in article 8.

ART. 8. For the execution of this convention the State of S. Paule is from this date authorized to promote in this country or abroad, with the guarantee of the surtax of three francs referred to in article 6, and with the conjoint responsibility of the three States the necessary credit operations up to the amount of 15 millions sterling, which will be applied as a gold reserve for the department for the emission and conversion of gold notes, which may be created by Congress for the fixing of the value of the currency.

1. The product of the emission against this reserve will be applied, in terms of this convention, to the regularization of the coffee trade and its valorization, without prejudice to other endowments created by law.

2. In case there should be need of the indorsement or guarantee of the Union for these credit operations, the dispositions of Clause X of article 2 of law 1452 of December 30, 1905, will be observed.

3. The State of São Paulo, before closing the credit operations indicated above, will submit the terms and conditions to the knowledge and approval of the Union and of the contracting States.

ART. 9. The organization and direction of all the services of this convention will be intrusted to a commission of three members nominated by each of the States and a president chosen by the three States, who will only have a casting vote.

1. Each director will have a substitute to replace him when absent, the nomination of these substitutes being also made by the respective States.

ART. 10. The commission referred to in the preceding article will organize all the departments and nominate all the functionaries necessary for the execution of this convention, and it may intrust, in part, its execution to some national association or company (empreza) under its immediate control, in accordance with the respective regulations.

ART. 11. The domocile of the commission will be the city of São Paulo. ART. 12. For the execution of the objects of this convention the commission will organize the necessary regulations which will be submitted to the approval of the contracting States, which will be considered to approve them if they do not state their objections within fifteen days.

ART. 13. The responsibilities and advantages of this convention will be divided among the contracting States in proportion to the quota of surtax paid on the coffee from each of them.

ART. 14. The contracting States recognize and accept the President of the Republic as arbiter in any questions that may arise between them in the execution of this convention.

ART. 15. The present convention will come into force from the date of its approval by the President of the Republic, in terms of No. 16 of article 48 of the Constitution.

Town hall of Taubaté, February 26, 1906.

(Signatures)-Nilo Peçanha; Francisco A. Salles; Jorge Tibirica.

Modifications and amendment to convention of Taubaté.

The presidents of the States of Rio de Janeiro, Minas Geraes, and São Paulo have agreed and resolved to modify the convention of Taubaté and to add the following clauses, which shall now be a part of the convention :

I.

Article 1 of the convention shall be substituted by the following: During such period as shall be judged convenient the contracting States undertake to maintain in national markets a minimum price of 37$000 per bag of 60 kilos of coffee of New York type No. 7 in the first year; this minimum price can later be raised to a maximum of 40$000, according to the exigencies of the market.

As regards superior qualities, according to the same New York classification, prices will be raised proportionately during the same period.

II.

If the credit operations necessary for the carrying out of this convention are undertaken by the three States without consent or guarantee of the Federal Government the surtax of 3 francs, referred to in article 8 of the said convention, will be collected by the States and the proceeds deposited for the purposes land down in article 7.

III.

The date for the commencement of the collection of the 3 francs surtax shall be determined by the contracting States.

IV.

So long as the caixa de emissão e conversão has not been created or is not in working order the States are empowered to apply the proceeds of the loan directly to the valorization of coffee.

V.

The government of the State of São Paulo, before making the final arrangements relative to the operations of credit, which are mentioned in article 8 of the convention, will submit the conditions and clauses of the contract for the knowledge and approval of the governments of the other contracting States and to the Government of the Union, in the case of a federal guaranty, in order that the exact responsibility of each may be clearly defined in the operation, which will depend on that approval.

VI.

The present convention will remain in force after the date of its approval according to the terms of No. 16 of article 48 of the Federal Constitution. Bello Horizonte, July 4, 1905.

ELECTION AND INAUGURATION OF DR. AFFONSO PENNA AS

No. 153.]

PRESIDENT.

Chargé Richardson to the Secretary of State.

AMERICAN EMBASSY, Petropolis, March 3, 1906. SIR: I have the honor to report that on March 1 Dr. Affonso Penna was elected President and Dr. Nilo Peçanha Vice-President of the Republic for the period of four years commencing November 15 next. I have, etc., CHARLES RICHARDSON.

Ambassador Griscom to the Secretary of State.

[Telegram.-Paraphrase.]

PETROPOLIS, November 15, 1906.

(The inauguration, November 15, of Affonso Penna as President and the continuation of Baron Rio Branco as minister for foreign affairs are reported.)

The Secretary of State to President Penna.

[Telegram.]

DEPARTMENT OF STATE, Washington, November 16, 1906.

In behalf of President Roosevelt and in his name, interpreting his sentiments toward the United States of Brazil and toward yourself personally, I send hearty congratulation upon your inauguration as President of the Republic and sincere good wishes for a happy and glorious administration.

ELIHU ROOT.

The President of Brazil to the Secretary of State.

[Telegram.]

RIO, November 16, 1906.

I thank you cordially for the kind words sent to me on behalf of President Roosevelt, now traveling in the South. You are well acquainted with the friendly feelings of the Government and people of Brazil toward the United States of America.

AFFONSO PENNA.

Ambassador Griscom to the Secretary of State.

[Telegram.-Paraphrase.]

PETROPOLIS, November 16, 1906.

(The ambassador reports that President Affonso Penna in his inaugural address made unusual mention of the relations of Brazil with the United States, and quotes him as follows: "The Pan

American conference in Rio de Janeiro and the visit with which the eminent statesman, Mr. Elihu Root, Secretary of State of the United States, honored our and other South American countries are facts of extraordinary political accomplishment, marking a new era in the relations of the people of the New World." Also, " In the formative period of our political existence Brazilian statesmen understood the high desirability of close relations with the young and flourishing Republic of the United States of America, which first among the colonies of the New World proclaimed its independence. This traditional policy has in recent times received a great impulse, and will continue, I am convinced, to merit the careful attention of both peoples." The President expressed confidence that the supreme tribunal of Brazil would show itself worthy of its great model, the Supreme Court of the United States. In his concluding paragraph he advised his compatriots to devote all their efforts to attaining the prominent position predicted for them by Mr. Root " in the prevision of the remarkable American statesman. The fact that the United States was the only foreign nation mentioned in the address is remarked upon.)

The Secretary of State to Ambassador Griscom.

[Telegram.]

DEPARTMENT OF STATE, Washington, November 17, 1906.

Express the thanks of this Government and of myself personally to President Penna for the kind and helpful expressions of his inaugural address.

ROOT.

PREFERENTIAL TARIFF CONCESSIONS IN FAVOR OF AMERICAN

PRODUCTS.

Ambassador Griscom to the Secretary of State.

[Telegram.-Paraphrase.]

PETROPOLIS, July 4, 1906.

(States that the Brazilian Government, on July 4, proclaimed a tariff reduction of 20 per cent, to take effect the 1st instant and terminate December 31 next, in favor of the following goods emanating from the United States: Flour, condensed milk, types of rubber, watches and clocks, inks except for writing, varnishes, typewriters, refrigerators, scales, windmills, and pianos.)

59605-FR 1906- -8

No. 13.]

Ambassador Griscom to the Secretary of State.

[Extracts.]

AMERICAN EMBASSY,

Petropolis, July 14, 1906. SIR: I have the honor to confirm a telegram addressed to you on the 3d instant which, deciphered, reads as follows: "

Mr. Richardson transmitted to you in his No. 165 of May 16 a copy of a note of inquiry which he addressed to the foreign office pursuant to your cable instruction of the 15th of May. After waiting a month for a reply to Mr. Richardson's inquiry I made several verbal inquiries at the foreign office without producing any result, and finally, on the 30th of June, addressed to the minister of foreign affairs a note, a copy of which I inclose herewith, asking him to give me a reply to the very simple question as to whether the 20 per cent reduction had as yet gone into effect. My inquiry was immediately followed by the publication on the 3d of July of a presidential decree, a copy and translation of which I inclose herewith, putting into effect a 20 per cent preferential reduction in favor of the following goods imported from the United States: Flour, condensed milk, types of rubber, watches and clocks, inks except for writing, varnishes, typewriters, refrigerators, scales, pianos, and windmills.

I am now engaged in collecting some statistics to show the effect of the operation of the 20 per cent reduction in our favor which was in effect from April 15, 1904, until January 1, 1905. At an early date, therefore, I will have the honor of making a further report to the department on this subject.

I have, etc.,

LLOYD C. GRISCOM.

[Inclosure 1.]

Ambassador Griscom to the minister of foreign affairs.

JUNE 30, 1906.

MONSIEUR LE MINISTRE: I have the honor to refer to your excellency's note No. 15 of May 19 last to Mr. Richardson, in which, after acknowledging the receipt of his note of the 16th of that month inquiring whether the promised reduction of 20 per cent in the customs duties on certain American articles had as yet gone into effect, your excellency promised to make urgent inquiries in the premises from the ministry of fazenda.

Since the receipt of the above-mentioned note this embassy has heard nothing more about the matter from your excellency's Government, and as this reduction of 20 per cent in the customs duties is of considerable importance to my Government, I must beg of your excellency to be good enough to communicate to me the answer to this simple question at the very earliest possible moment. I take advantage of the opportunity to renew, etc.,

LLOYD C. GRISCOM.

[Inclosure 2.]

Executive decree No. 6,079, of June 30, 1906, and published in the Diario Official on July 3, 1906.

[Translation.]

Conceding a reduction in the importation duties of certain articles of a North American source;

The President of the United States of Brazil with the intention of promoting the development of the commercial relations of Brazil with the United States of North America; and whereas,