settlement and earnestly hopes that bloodshed may be averted, in view of this Government's well-established policy of non-interference in European affairs, I believe it would be unwise for the American Government even to aid in mediation as you suggest, since, with a similar offer by the British, a controversy between the Portuguese Government and the revolutionary forces might immediately arise as to which of these two offers should be accepted and there would be inevitable taking of sides on that subject, with the consequent identification of the American Government with one side or the other. Repeated to Consul Funchal. STIMSON 853.00 Revolution 1931/9 : Telegram The Consul at Funchal (Huddleston) to the Secretary of State FUNCHAL, April 10, 1931-4 p. m. [Received April 10-3: 40 p. m.] I regret if plan has caused Department embarrassment. Will relieve Department and Minister Lisbon of any and all responsibility and will make full apologies in accordance with any instructions to be received from Department. HUDDLESTON 853.00 Revolution 1931/9: Telegram The Secretary of State to the Consul at Funchal (Huddleston) WASHINGTON, April 11, 1931-2 p. m. Your telegram April 10, 4 p. m. The Department has been caused no embarrassment of which it is aware and perceives no reason why an apology should be necessary. STIMSON REPRESENTATIONS REGARDING DISCRIMINATORY CHARGES IN 653.116/80 PORTUGUESE PORTS1 The Minister in Portugal (South) to the Secretary of State No. 294 LISBON, February 7, 1931. [Received February 25.] SIR: With reference to my despatch No. 105 of July 10 [11], 1930, enclosing a copy and translation of a note from the Minister for Foreign Affairs, dated July 8, 1930,2 and to previous correspondence 1 Continued from Foreign Relations, 1930, vol. 1, pp. 777–785. 2 For despatch and note, see ibid., pp. 784-785. on the subject of flag discrimination, I have the honor to enclose herewith a copy of the Diário do Governo of February 3, 1931, Series II [I], No. 28, containing the text of Decree No. 19,306 of January 30, 1931, (of which I also enclose a translation)," whereby the Portuguese Government undertakes, prior to June 30, 1931, to extend national treatment in respect of maritime and port dues to foreign merchant vessels in the ports of Portugal and of the adjacent islands. This concession has been obtained primarily through the vigorous and tactful insistence of the British Ambassador, Sir Francis Lindley, acting under his Government's instructions. Unfortunately, the decree does not affect the other measures of discrimination complained of by the maritime Powers-the rebates on import duties granted to all goods imported into national ports, including those of the colonies, in Portuguese bottoms, and the inequality of treatment accorded to foreign merchant vessels in the ports of the colonies in respect of maritime and port dues. Despite our earnest representations and those of the other maritime Powers, the Portuguese Government has shown no inclination to do away with these discriminatory practices, with the result that it would now appear to be incumbent upon the aforesaid Powers to consult each other with a view to the adoption of effective retaliatory measures. Respectfully yours, 853.84/12: Telegram J.G. SOUTH The Chargé in Portugal (Magruder) to the Acting Secretary of State LISBON, July 7, 1931-2 p. m. [Received July 7-12:05 p. m.] 21. Decree of July 1st extends national treatment in respect of maritime and port dues to foreign merchant vessels but creates new tonnage dues of one escudo per gross registered ton thereby discriminating against all vessels other than those discharging or loading full cargoes to the manifest advantage of Portuguese bottoms. Text by mail. Please inform Commerce. MAGRUDER 653.116/89 The Minister in Portugal (South) to the Secretary of State No. 459 LISBON, September 21, 1931. [Received October 5.] SIR: With reference to the Legation's despatch No. 408 of July 10, 1931, and to previous correspondence on the subject of flag discrimi 'Not printed. nation, I have the honor to enclose herewith a copy of the Diário do Governo of September 12, 1931, Series I, No. 211, containing the text of Decree No. 20,304 of September 12, 1931, whereby the Portuguese Government professes to abandon in principle the position it has maintained since 1921 in respect of flag discrimination and undertakes by means of successive reductions to do away with the rebate of ten per cent on import duties granted during the past ten years to all goods imported into national ports, including those of the adjacent islands, in Portuguese bottoms. The new decree provides for an initial reduction of from ten per cent to eight per cent in the aforesaid rebate, effective from October 15, 1931, to June 30, 1932, inclusive. However, care has been taken to avoid committing the Government in respect of the amounts of the subsequent reductions of which assurance has been given-this question having been left open for subsequent determination. A translation of the decree is also herewith enclosed. Respectfully yours, [Enclosure—Translation] J.G. SOUTH Decree No. 20,304 of the Portuguese Government 6 The customs differential system established by Decree No. 7,822, of November 21, 1927, (sic) affords protection to the national merchant marine, through the natural incentive which the consignee of the shipment has and which induces him to constrain the shipper, at the origin, to give preference to Portuguese vessels. However, there have resulted therefrom substantial decreases in the public revenue, which the Government began to attenuate by Decrees Nos. 17,062 (tobacco), of June 3, 1929, and No. 17,823, of December 31, 1929 (corrected in the Diário do Govêrno No. 103, of May 6, 1930), as well as difficulties of external commercial policy, possibly accentuated by the present world crisis, which enhances the importance of the competition of national vessels, although in fact there is as yet question of a slight influence upon the volume of imports interesting to our Country. However, the Government does not wish, in the interest of a just balance in public administration, to maintain and permit to continue a cause for protests over inequalities in respect of navigation, which everywhere leads toward equal treatment, when such cause may, through reaction, prejudice other very important national economic interests. And, in consideration of the foregoing, it abolishes in principle the aforesaid customs bonus on cargo transported in national vessels. Decree No. 7,822 is dated November 22, 1921. However, it must be borne in mind that an abrupt change of system might affect in an unanticipated manner a branch of activity in which thousands of Portuguese find a means of living and thus justly give rise to a reaction in internal politics, that which everyone, here and abroad, is in duty bound to understand and avoid, especially during the uncertain and difficult period through which the world is passing. Therefore, the elimination of the bonus must be gradual, possibly attending the creation of better means of work, which likewise cannot be attained immediately, in view of the circumstances of credit which temporarily render difficult the quick mobilization of the capital indispensable to the renovation of our long distance merchant fleet. Under the authority which No. 2 of Article 2 of Decree No. 12,740 of November 26, 1926, confers upon me, by virtue of the provisions of Article 1 of Decree No. 15,331 of April 9, 1928, and in accordance with the recommendations of all the Ministers of State: I deem fit to decree, with the force of law, the following: Article 1. Beginning with the fiscal year 1931-1932, there shall be successively reduced, until abolished, the customs bonus established by No. 1 of Article 1 of Decree No. 7822, of November 22, 1921, in so far as it has not yet been revoked, the Government fixing each year the taxes which shall be levied. Provided, however, that, during the present fiscal year, the bonus to which this article refers shall be fixed at 8 per cent on imports and at 16 per cent on exports to foreign ports. These new percentages shall be applied to merchandise shipped from October 15, 1931, inclusive. Article 2. The increase in revenue accruing from the application of the foregoing article shall be devoted to subsidies for the reconstruction of the long distance merchant fleet. Article 3. The provisions contained in this act shall apply exclusively to the continent and to the adjacent islands. Article 4. Conflicting legislation is hereby revoked. In consequence, let all the authorities concerned in the knowledge and execution of the present decree with the force of law comply therewith and cause it to be complied with and observed in its entirety. Let all the Ministers of State cause this decree to be printed, published and distributed. Given at the Palace of the Government of the Republic, September 12, 1931. 653.116/90 The British Chargé (Osborne) to the Secretary of State No. 352 WASHINGTON, October 1, 1931. SIR: I have the honour to inform you, under instructions from His Majesty's Principal Secretary of State for Foreign Affairs, that His Majesty's Government in the United Kingdom are anxious to secure the cooperation of the United States Government with a view to effect the removal of the customs discrimination practised by the Portuguese Government in favour of Portuguese shipping-a discrimination which is contrary to general international practice (as embodied, for example, in the Maritime Ports Convention) and to the navigation policy of Great Britain and all other important maritime Powers. I am informed that the Portuguese Government, as a result of longsustained pressure from His Majesty's Government and other interested Governments, published on September 12th decree No. 20,304 providing for the elimination by stages of the customs discrimination in question. Article 1. of this decree provides that customs bonds shall be reduced from ten per cent to eight per cent for imports carried in Portuguese bottoms and from twenty per cent to sixteen per cent for similar exports for foreign ports, these reductions to apply to all goods embarked on and after October 15th, 1931: secondly that thereafter bonds shall be "successively reduced until it is abolished". No dates are specified. On September 26th His Majesty's Chargé d'Affaires at Lisbon addressed a note to the Portuguese Government expressing the disappointment of His Majesty's Government that the first reductions should be twenty per cent only and requesting assurances that there should be further rebates to five per cent and ten per cent respectively within six months with the prospect of total abolition within another eighteen months, i. e. by October 15th, 1933. I am desired by the Marquess of Reading' to express the earnest hope that the United States Government will instruct their representative at Lisbon to support the above-mentioned representations. I have [etc.] 653.116/90: Telegram D. G. OSBORNE The Secretary of State to the Minister in Portugal (South) WASHINGTON, October 7, 1931-6 p. m. 23. Your mail despatch No. 459, September 21, 1931. The Department is in receipt of a note from the British Chargé d'Affaires ad interim here, stating that his Government is "anxious to secure the cooperation of the American Government with a view to effecting the removal of the customs discrimination practiced by the Portuguese Government in favor of Portuguese shippers". The communication describes the provisions of Decree No. 20,304 and states that on September 26 last the British Chargé d'Affaires at Lisbon addressed a 'British Secretary of State for Foreign Affairs. |