Charles C. Marsh to the Hon. George P. Marsh , United States, July 28, 1871

No. 238. Mr. Marsh to Mr. Fish,

Sir: I have the honor to inclose herewith copies of letters from Messrs. Granet, Brown & Co. and Mr. Garbi, merchants, at Genoa, to this legation in relation to the new duty on petroleum imported into Italy from the United States, and of a correspondence between this legation and the ministry of foreign affairs on that subject. The correspondence does not seem to me to require any special comment on my part. I should observe, however, that at the time of my conversation with the minister of foreign affairs, on the 25th of June, reported in my dispatch No. 359, I was wholly unaware of the fact that the law had already been approved, and the time of its going into effect fixed by royal decree; and, injustice to the minister, I ought.to add that I have no doubt he was equally so.

The decrees were doubtless drawn up and presented to the King for signature at the instance of the minister of finance, and without the participation of the minister of foreign affairs, to the functions of which department the subject does not belong.

For the clearer understanding of the question, I beg leave to submit the following observations:

The early importations of petroleum into Italy consisted in a large proportion of burning-fluids exported from the United States to France in the crude form, refined in that country, and then re-exported on French account to Italy. The question of the rate of duty, therefore, interested France as well as the United States, and had, I believe, been under discussion between the Italian government and the French minister before the attention of this legation was called to the question.

At first, after some hesitation, these fluids were assimilated to bitumen, which, by the treaty with France, was admitted duty free, but about the close of the year 1803, in virtue of a circular from the minister of finance to the officers of the custom-houses, a duty of six francs per hundred kilograms was exacted upon refined petroleum, the crude fluid still being entered duty free, and this regulation has remained in force until the passage of the late law imposing a higher rate.

The Italian government regards these different constructions of the French treaty by its authorities as provisory only, and at all times subject to revision; and it contends that the fluids now so largely imported from the United States in various forms, all comprised under the generic name of petroleum, cannot be considered as having been contemplated by the treaty of 1863, because this product, under the designation of bitumen or any other used in that instrument, was at that time not known as an article of commerce, and hence the right remains to subject it to duty, independently of treaty provisions.

As most American petroleum is at present refined in the United States before exportation, France has little further interest in the question, and, as I am informed, does not contest the ground now taken by the Italian government.

I have not thought it expedient without instructions on the subject to enter into any discussion of the question of the legal construction of the treaty stipulations with France, or of what may be a still more difficult one, viz, whether we, not being parties to that treaty, but only entitled to the benefit of its provisions by the general stipulations of the treaty of 1838, between the United States and Sardinia, to which France was not a party, can, on that ground, be allowed to dispute a construction which is accepted by the parties to the first-named instrument.

The financial measure now resorted to by the Italian government is unequal and oppressive in its operation, and must certainly be regarded as savoring of undue harshness in its application. Although it cannot be said to be in the nature of direct retaliation, yet I have no doubt that its adoption is in no small degree to be ascribed to the high rate of duties levied by us on Italian marble, wines, and many other products, and I shall not be surprised if other features of our tariff system—such, for example, as the discrimination between the works of foreign artists and those of American artists residing in foreign countries, which excites much dissatisfaction’—shall induce the imposition of export duties on certain articles, or other modes of compensatory provisions of our tariff, which are complained of as greatly injurious to the industry of Italy.

I am, &c.,

Sir: In the interests of our American correspondents who have been in the habit of exporting largly refined petroleum from the United States to Italian ports, we take the liberty of addressing you to inquire whether it is contemplated that the increase of duty on the said article now under the consideration of the Italian parliament shall be applied also to the cargoes aloft or loading in the American ports on the day when such augmentation of duty is enforced in Italy.

We are informed that upon a change in the tariff taking place some years since in sugar, coffee, and other produce, facility was allowed importers to introduce such goods as were then afloat, or about to sail for Italian ports, at the old duty upon the presentation of bills of lading, or other proofs of shipment at the time of the enforcement of the increased duty.

We should be glad to learn that an equal protection will not be denied to our American friends who have made or are making shipments in complete ignorance of the contemplated increase in the cost which the new duty will entail upon them.

Begging respectfully your consideration of the question, and a reply as soon as convenient,

We are your excellency’s obedient and humble servants,

Sir: We have the honor to acknowledge the receipt of your letter of the 6th instant, and hasten to furnish the information you require. Messrs. T. Hess & Co. of New York, shipped to our consignment for sale on their account a small cargo of refined petroleum, consisting of 4,000 cases prime white brand “Oleophene,” by the Italian brig Niagara, Mr. G. Bartolomeo. The bill of lading is dated New York, April 22, and the vessel arrived in this port on the 9th instant.

The amount of duty we should have to pay under the new tariff would be as follows:

Whereas under the old duty of 6 francs per hundred kilograms gross, without the additional 5 per cent, emolument, and 10 per cent, décimo de guerre, it would be only gold francs 9,120.

What makes the case especially hard for our American friends is, that a large cargo of refined petroleum in cases, which sailed fifteen days after the Niagara, made a shorter passage, and arrived a few days before the 1st of July. The consignee was thus enabled by paying the old duty at once, to commence sales at prices which, leaving him a large profit, would cause our friends a heavy sacrifice.

We may mention that the French government has, since our last communication, decreed that cargoes by vessels sailing before a certain date shall be introduced under the old duty. We cannot see why equal justice should not be accorded to shippers investing in merchandise for sale in this country also. This is the only cargo we have answering precisely to the conditions required, and in which we are not ourselves interested.

Awaiting the favor of your further communication, we are your excellency’s obedient and humble servants,