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The American Government cannot doubt that a similar examination in respect to the article of foreign raw tobacco will have produced the same result, and will have shown the possibility of a similar reduction of the pres. ent duty on that article so far as the revenue is concerned, or even supposing that a trifling loss of revenue should be incurred, that such loss would be more than counterbalanced by the commercial advantages stated in the note which the undersigned had the honor to address to his excel. lency the Baron de Werther, under date of the 29th January last. But the Prussian Government seeks to derive from the proposed reduction, some further concessions in favor of the produce and manufactures of the Ger man states associated in the commercial and customs union.

This desire is perfectly natural and laudable on the part of a Gorernment, the faithful guardian of the interests of its own subjects and those of its commercial allies; and the American Government will certainly be disposed to meet the wishes of Prussia in this respect, if it can be shown to be practicable, consistently with the known policy and international obligations of the United States.

In answer to the specific inquiry made by his excellency the Baron de Werther, in his official note under date of the 26th of June, whether the undersigned is authorized to offer any additional concessions on the part of the American Government in favor of the industry of the states of the German association, in return for a reduction of the duties now imposed on all foreign raw tobacco imported into those states, the undersigned is bound frankly to declare that he is not at present authorized to make any such offer.

Should such a proposition be made on the part of Prussia, and the other German states associated with Prussia, the undersigned is merely authorized to receive and transmit the same to his Government for its consideration. Any such proposition would doubtless be examined by the American Government, with that candor and deliberation, and in that conciliatory spirit which are due to every foreign friendly state, and especially to the Prussian and other German Governments, with whom the United States have ever maintained the most pacific and cordial relations. In order, however, to enable the undersigned to bring to the knowledge of his Government any such proposition, it will be necessary that the Prus. sian Government should distinctly specify what in its opinion are the articles, the produce and manufacture of Germany, which are now charg. ed with excessively high duties in the ports of the United States. At the same time, it is the duty of the undersigned to declare, that if he has rightly comprehended the nature of the concessions alluded to, by his ex. cellency Baron de Werther, as implying a formal stipulation of any pref. erences in the ports of the United States, for the productions of the German association over similar articles imported from other countries, the undersigned cannot, consistently with his instructions, encourage the hope that any such proposition will be favorably listened to by the American Government.

The principal objections to a stipulation of this nature having already been fully stated, in the official note which the undersigned had the honor to transmit, by order of his Government to his excellency the late Mr. Aucillon, minister of foreign affairs, under date of the 27th of May, 1836, as growing out of the uniform and settled policy of the United States hitherto pursued, not to purchase from other countries peculiar

commercial privileges by granting similar privileges in return, but to observe toward all nations a system of equal and indiscriminating reciprocity tendering to all the same advantages upon the same terms.

Beside this objection, resulting from the fixed commercial policy of the American Government, such a stipulation would also be liable to another equally insurmountable objection, that it could not be entered into without danger of its interfering with the existing obligations of the United States toward other foreign powers, resulting from commercial treaties of reciprocity, by which they have already stipulated to grant to certain na. tions the same favors in navigation or commerce which they may impart to any other.

With, therefore, the most sincere desire to gratify the wishes of the Prussian Government, and the other German states associated in the commercial and customs union, the Government of the United States could not, consistently with its own deliberate policy and with its obligations to other foreign powers, enter into any such stipulation.

The American Government does not ask any special advantage or discrimination in favor of the products of the United States, imported and consumed in the German association.

The official note of his excellency Baron de Werther, if the undersigned has rightly comprehended its import, does not propose a reduction of the present duties on North American tobacco, as distinguished from other foreign tobacco, but it proposes an indiscriminate reduction of the duties on all foreign tobacco; in return for which it asks some further concessions in favor of the products and manufactures of the German association imported into the United States. On the other hand, the American Government does not demand any exclusive privilege in favor of the productions of the United States imported into Germany. It merely asks, as the undersigned has endeavored to show, in his official note of the 23d January last, such a general reduction in the duties on foreign tobacco, as will have the inci. dental effect of relieving the tobacco, the produce of the United States, from the inequitable discrimination which is now made in favor of tobacco imported into Germany from South America and the Spanish West Indies. It would, therefore, seem that the American Government cannot, as a matter of strict right and equity, be called upon to make any further concessions in favor of German industry, in exchange for such a modification of the duties on tobacco, at least according to the spirit of the argument con. tained in the official note of his excellency Baron de Werther, under date of the 12th December last, seeking to establish the position that the United States could not, as a matter of right and equity, demand a reduction in the duties levied in Germany on their staple commodities, as an equivalent for the favorable operation of the general regulations of the American tariff upon the particular commodities imported from Germany, in consequence of its moderate duties constantly diminishing, until the year 1842, when they are all to be reduced to a rate not exceeding twenty per centum ad valorem.

It will, however, be perceived, by the report of the committee of the House of Representatives of the American Congress, under date of the 25th February last, a printed copy of which is herewith enclosed, that the exist. ing tariff of the United States may be revised even before the year 1842, with a view of adapting it to the more or less discouraging duties levied upon their staple productions in several European countries, and of thus correcting the present inequality in the commercial relations between the United States and those countries. The manner in which such a modifi. cation of the tariff may be effected, without an infraction of the subsisting reciprocity treaties between the United States and foreign powers, is explained in the memoir communicated by the undersigned to the deputies of the German asociation at Dresden, on the 22d July, 1838 (p. 5, last paragraph). If such a modification in the commercial policy heretofore pur. sued by the United States, should take place, and if the American tariff should be thus revised, with a view of retaliating upon those European states which may persist in levying these excessive duties upon American commodities, the more just and equitable conduct of those Governments which are disposed to reciprocate the liberal commercial policy of the United States, will, doubtless, be taken into consideration in thus modifying the tariff. The wishes of the Prussian Government, as intimated in an official note of his excellency Baron de Werther, under date of the 26th June, may thus be met by legislative measures on the part of the United States, depending on the wisdom of Congress, guided by a sense of what is due to the conciliatory course of foreign Governments, and at the same time consistent with the existing treaty obligations of the United States toward other foreign powers.

Doubtless the President of the United States will be disposed, so far as the subject may be within his constitutional competence, to contribute to such a result, and to recommend to Congress such measures as he may deem expedient for that purpose.

It will also be seen by the abovementioned report, that the interest which this important question has excited in the public councils of the American Union continues to be undiminished; and the undersigned has accordingly received the President's instructions earnestly to press it upon the consideration of the Prussian Government and its commercial allies.

In requesting his excellency Baron de Werther, to communicate the contents of this note to the other German states associated with Prussia in the union of commerce and customs, the undersigned has the honor to renew to his excellency, the Baron de Werther, the assurances of his most distinguished consideration.

HENRY WHEATON. His Excellency BARON DE WERTHER,

Minister of State and of Foreign Affairs.

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Mr. Wheaton to Mr. Forsyth.

[EXTRACTS.]

[No. 125.]

BERLIN, August 7, 1839. Sir: The deputies of the German commercial and customs union as. sembled here on the 16th, for the purpose of revising the tariff, the customhouse laws, settling the accounts, and determining a variety of points sug. gested by experience, as to the working of the system.

It is not understood that our business will be submitted to their consider. ation at the present session, as the reduction of the duties on rice has al.

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ready been determined on; and you will perceive, from my correspondence with Baron de Werther, communicated in despatch No. 122, that the question of the duties on tobacco is suspended, upon their asking me what equivalents we are willing to give in return for a reduction of their duties, and my asking them in reply what are the duties on German produce and manufactures, imposed in the United States, of which they suppose they have reason to complain.

Mr. Dodge reached here a few days since from a tour in Baden, HesseDarmstadt, and the Prussian Rhine province, which he made under my instructions, for the purpose of examining their resources, with a view to our commercial intercourse in general, and with a particular view to the question of the tobacco duties.

I have directed him to remain here during the session of the commercial Congress.

It is believed that the portion of the grand dutchy of Luxembourg, which still continues to form a part of the Germanic confederation, and is entirely detached from the kingdom of Holland, will be admitted into the German commercial and customs union.

I have the honor to be, sir, with the highest consideration, your obedient servant,

HENRY WHEATON.

Mr. Wheaton to Mr. Forsyth. [ No. 136. ]

BERLIN, October 3, 1839. Sir: I have the honor to enclose a copy of a communication made to the Baron de Werther, on the subject of our commercial negotiations.

I have the honor to be, with the highest consideration, sir, your obedient servant,

HENRY WHEATON.

BERLIN, June 26, 1839. Mr. Wheaton, envoy extraordinary and minister plenipotentiary of the United States of America, did the undersigned the honor to communicate to him, on the 23d of January last, some observations on the reasons advanced, on the part of the custom-house union, against the diminution of the duties on tobacco. Almost at the same moment the King's ministers received the declaration of the only state in the association which had not already explained itself on the subject. It was, like those from the other states, conformable with the contents of the undersigned's note of December 12, and, consequently, the association was unanimous on the subject. The undersigned did not, however, refuse to enter again into communication on this matter with the minister of finance, and to communicate to him the new note from Mr. Wheaton.

From the mature examination which took place in consequence, it appears that unless reductions be made in the tariff of the United States, so

as to offer essential advantages to the industry of the states of the asso. ciation, all attempts to bring those states to consent to a reduction of the duty on the importation of tobacco would be vain. The undersigned may on this subject call the attention of Mr. Wheaton to the fact, that the cultivation of tobacco is a business of importance in some of the southern states of Germany. Therefore, before the Prussian Government can return to this matter, and again present it to the deliberation of the other Governments, the undersigned must request Mr. Wheaton to say, whether he conceives himself authorized to offer concessions favorable to the industry of the states of the association, in return for a reduction of duties on the importation of unmanufactured tobacco. • The undersigned avails himself of this occasion to repeat to Mr. Wheaton the assurance of his high consideration.

WERTHER. HENRY WHEATON, Esq.,

Envoy Ectraordinary and

Minister Plenipotentiary of the United States.

BERLIN, October 1, 1839. The undersigned, envoy extraordinary and minister plenipotentiary of the United States of America, has the honor to communicate to his excellency Baron de Werther, minister of foreign affairs, the annexed copy of a report made by Mr. Dodge, agent of the American Government for commercial affairs, concerning the question of the reduction of duties on leaf tobacco, imported into the states of the German custom-house union, in support of the various notes which the undersigned has had the honor to address to his excellency Baron de Werther on this question.

The undersigned seizes the opportunity to renew to his excellency Baron de Werther the assurances of his most distinguished consider. ation.

HENRY WHEATON. His Excellency BARON DE WERTHER,

Minister of Foreign Affairs of Prussia.

Report respecting the demand of the United States of America for a

diminution in the duties on the leaf tobacco of that country, consumed

in the Zoll- Verein, addressed to his Excellency Henry Wheaton, Envoy · Extraordinary and Minister Plenipotentiary of the said States, by his most obedient servant, Josh. Dodge, diplomatic agent attached to the said legation, at Berlin.

BERLIN, August 31, 1839. SIR : In our memorials, under date of the 4th and 22d of July, 1838, which we had the honor of presenting to Messrs. the deputies of the zollverein, assembled at that time in Dresden, we asked for a diminution of 2. thalers per centner in the duties on the leaf-tobacco of the United States, and of 2 thalers per centner on the rice, the produce of our country; and in support of our demand, we brought forward several statistical facts showing the want of reciprocity on the part of the zoll-verein in meeting

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