DENMARK AND THE SOUND DUES. [Ex. Doc. No. 108, House of Representatives, 1st Session 33d Congress.] [No. 6.] Mr. Jackson to the Secretary of State. LEGATION OF THE U. STATES, COPENHAGEN, SIR: In compliance with the instructions contained in your despatch No. 6, I have made minute inquiries in relation to the practical effect of the new tariff of Sound dues on American commerce, and more especially as to the duty imposed by this tariff upon the two items named by you-to wit, raw sugar and rice in paddy. I hasten to lay before you the result of my investigation. The proposed object of the new tariff was to correct the arbitrary and indefinite mode of ascertaining the Sound dues on certain articles not enumerated in the tariff of the treaty of Christianople, and to correct the ad valorem duty calculated on those articles, according to the rule laid down in the 3d section of the treaty of 1715, into a specific duty by the means of a fixed valuation. The treaty of Christianople, to which reference has been made in all subsequent treaties in relation to the Sound dues, was concluded on the 16th of August, in the year 1645, between Denmark and the Netherlands. It is the earliest treaty between Denmark and any foreign power in which the amount of duty to be paid on the passage of the Sound and the Belts was fixed with any degree of certainty. By this convention a tariff of specific duties was established on nearly three hundred enumerated articles; and it was further agreed that "all merchandise not specified in this list should be reckoned after mercantile usage, and as had been the custom from time immemorial." That is to say, according to the best Danish writers on the subject, "conformably to the denomination of these non-specified articles," they should either be compared with those specified to which they bore the greatest resemblance, and the calcution to be made on that basis, or they should be reckoned according to their value, and the duty to be paid thereon at the rate of one per centum. As the articles not enumerated in this tariff grew into commercial importance, it was found necessary to clear up the obscurity in which they were left by this treaty, and to establish some more definite mode of ascertaining the amount of duties to be levied upon them. Another treaty was consequently made between Denmark and the Low Countries, at Copenhagen, on the 15th of June, in the year 1701. By the 3d article of this treaty, it was declared that the wares and goods which are not specified in the aforesaid tariff of the year 1645, shall pay the same Sound duty according to their value-that is to say, the value of the same shall be reckoned according to the place whence they came, and they shall pay one per centum of that value. The great change which has taken place in the commerce of the world since the date of these two treaties, the immense increase in the trade of the Baltic, but more especially the fall in the price of those commodities which constitute the basis of that trade, had caused the Sound dues to vary very essentially from the spirit of those treaties, as declared in the 3d section of the treaty of 1701. The Danish government had made no corresponding change in the mode of calculating those dues, but still continued to levy them according to their long-established custom. In this manner a duty of from two to six per cent. ad valorem was often levied upon commodities which should have paid but one per centum. Against these abuses the merchants of the United States, of Great Britain, and of Sweden, had often remonstrated; but it is worthy of remark that the government of the United States was the first that publicly declared its intention to have these abuses corrected. This intention it clearly set forth in the very able paper on the subject issued from the State Department, and laid before Congress at the opening of the late extra session. Moved by the complaints of the English merchants, the government of Great Britain entered into a negotiation with that of Denmark in relation to the Sound dues, which terminated in the establishment of the new tariff, declared by his Danish Majesty's envoy extraordinary and minister plenipotentiary at the Court of St. James and her Britannic Majesty's Principal Secretary of State for Foreign Affairs, to be adopted by their respective governments for the space of ten years from the 15th day of June, 1841, "and further until the end of twelve months after either of the respective governments shall have given notice to the other of its intention no longer to abide by this agreement." The avowed intention of this new tariff was to reduce the duty on all articles not enumerated in the tariff of the treaty of Christianople to one per cent. ad valorem. The commissioners appointed to arrange the mode of calculating this duty, Mr. Macgregor, the British consul at Elsinore, on the part of Great Britain, and Mr. Wessel and Mr. Olrik, officers in the Danish custom-house, on the part of Denmark, were selected for this purpose, as being especially well qualified therefor by their long official residence at Elsinore, and their familiarity with everything connected with the levying and collecting of the Sound dues. It was at first proposed to charge a duty of one per cent. ad valorem on the invoices of all cargoes passing the Sound or the Belts, taking the original cost of the various commodities at the place whence they were shipped, as the amount on which the one per cent. should be calculated. But to this mode, although apparently the plainest and most simple, many strong objections were made; the principal of which were, the difficulty of ascertaining at all times the original cost of various articles, and the vexatious delays that would frequently and unavoidably occur in the slow and laborious process of levying the dues in this manner at Elsinore, where sometimes forty or fifty vessels arrive in a single day. much discussion, the commissioners finally agreed upon a tariff founded on the principle of converting the ad valorem duty of one per cent. on articles not enumerated in the treaty of Christianople, into a specific duty to be equivalent to one per cent. upon a fixed valuation on those articles. The tariff thus agreed upon by the commissioners is the new tariff adopted by the respective governments of Great Britain and Denmark. After The effect of the new tariff on the two articles named in your dispatch No. 6, viz: raw sugar and rice in paddy, has been to reduce the duty on the former from nine to five stivers on the hundred pounds; and, on the latter, from one and a half stiver the bushel,* to six stivers the four hundred pounds. In fixing the specific duty of five stivers per hundred pounds on raw sugars, ten specie dollars is assumed as the original cost of this article. This appeared to be so high a valuation for raw sugars in general, as to lead me to make very particular inquiries into the mode by which this valuation was arrived at. I ascertained that with regard to this, as well as other commodities, the commissioners have taken, as near as they could learn it, the original cost of the article at the place whence it was shipped, for the past ten years, *A bushel of paddy weighs, upon an average, about 40 pounds Danish, which is 44 pounds American. and have assumed the average cost of these ten years as a proper and just valuation on which to calculate a sum as a specific duty, which should be equivalent to the ad valorem duty of one per cent., according to the third section of the treaty of 1715. The high valuation of raw sugars made in this manner by the commissioners, is accounted for by the fact, that since the duty on all unrefined sugars has been equalized in Russia, nearly all the sugars that pass the Sound are the finer kinds of white Havana sugars-the lower priced yellow sugars being now very rarely sent up the Baltic in American vessels, simply because, as they pay precisely the same duties with the finer white sugars, they are found to be less profitable. At the present moment, owing to the uncertain state of the money market, and the general depression in all kinds. of trade, the price of sugars, as well as of other leading articles of commerce, is unusually low, not only in Denmark and throughout the north of Europe, but likewise at the ports of original shipment. The present price, therefore, can form no criterion for the fair average value of such sugars as are now sent up the Baltic. The cost of the finer white sugars, for the past ten years, has varied from eight and a half to eleven dollars per hundred pounds in Havana, from which place, or from the neighboring port of Matanzas, the greater portion of the sugars sent up the Baltic in American vessels is originally shipped, as will appear upon a reference to the "statement" appended to this despatch. The average of these prices would make the valuation of the commissioners appear to be a fair one; and, consequently, the specific duty of five stivers per hundred pounds, if at all too high, would certainly be only a small fraction* of one per cent. more, upon an average, than the ad valorem duty of one per cent. to be levied according to the third section of the treaty of 1715. On rice in paddy, by the new tariff, the Sound dues are reduced from one and a half stiver per bushel to six stivers per four hundred pounds-a reduction of nearly two-thirds of the old duty. The original cost of all the American rice that has paid the Sound dues, for the past ten years, has averaged about eighty-five cents per bushel. At this rate, the specific duty of six stivers per four hundred pounds, is about one and a half per cent. on the average original cost of this article; an evident excess, therefore, so far as American rice in paddy is concerned, of one-half of one per cent. over the There are but forty-eight stivers in the specie dollar; therefore five stivers is one-fifth of a stiver more than one per cent. on ten specie dollars. ad valorem duty agreed upon in the third section of the treaty of 1715. Your instructions rendered it my duty to obtain the proper information to transmit to the department in relation to the effect of the new tariff on the second item named in your despatch No. 6. In the course of my investigation, however, I have ascertained that the duty on this commodity is one of very little importance to American commerce. Clean rice is now invariably preferred to rice in paddy by the Baltic merchants; and Copenhagen and Strasburg (a town of considerable commerce in the Duchy of Sleswick) are the only places east of the Sound where mills are now in operation to clean rice from its husk. A reference to the "statement" appended to this despatch, will show that but one small cargo of rice in paddy has passed the Sound in an American vessel for the past four years-beyond which my research has not extended; and even this one cargo, though freighted in an American ship, was wholly owned by a Dane, by whom the Sound dues were paid. By the new tariff, the duty on some other articles of more importance to American commerce is greatly reduced. On dye-woods, with which American vessels are sometimes freighted up the Baltic, the duty is reduced from thirty stivers to eight stivers per thousand pounds, of certain kinds; and from thirty-six stivers to twelve stivers for the remainder. On coffee, the duty is reduced from twenty-four stivers to six stivers per hundred pounds. The effect of this latter reduction will probably be to cause this very important article to be hereafter shipped directly up the Baltic, instead of being sent, as heretofore, to Hamburg, and thence by land, across to Lubec, to avoid the heavy Sound dues. The general effect of the new tariff will, I have no doubt, prove beneficial to American commerce. The profit on each individual cargo passing the Sound may be no greater to the American shipper, as the price of the various commodities affected by this tariff will probably fall in the Baltic markets, in proportion to the reduction of the duty thereon; but a lower price will, as a matter of course, increase the consumption of those commodities, and will, therefore, create a demand for a greater supply. Of the advantages arising from this increased demand, the well-known enterprise of American merchants will no doubt give them a full share. I have the honor to be, very respectfully, your obedient servant, J. R. JACKSON. To the Hon. SECRETARY OF STATE |