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GALLATIN TO J. Q. ADAMS. - Albert Gallatin, The Writings of Albert Gallatin, vol. 2 [1879]

Edition used:

The Writings of Albert Gallatin, ed. Henry Adams (Philadelphia: J.B. Lippincott, 1879). 3 vols.

Part of: The Writings of Albert Gallatin, 3 vols.

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GALLATIN TO J. Q. ADAMS.

No. 155.

Paris, 31st July, 1820.

Sir,—

I had the honor to write you a few lines on the 27th instant, and hope that a copy of the King’s ordonnance which I sent the ensuing day will reach you at the same time.

I now proceed to state the substance of the conference I had on the 24th instant with Mr. Pasquier, and at which the Duke de Richelieu was present part of the time.

Mr. Pasquier stated that it had been found absolutely necessary to lay a countervailing duty on American vessels, and communicated the outlines of an ordinance to that effect, which it was intended to issue immediately. The plan proposed was to substitute, from the date of the ordinance, to the existing tonnage duty one of 99 francs per ton; to exempt from it vessels arriving in ballast, and to require only a bond for the payment of the new duty from vessels coming with cargoes which should have sailed from the United States before the ordinance was known there; that bond to be enforced only in case the new tonnage duty of the United States should not be refunded to those French vessels which had sailed from the United States without knowledge of the Act of Congress laying that duty. It was also intended to give a premium of ten francs per 100 kilogrammes of cotton imported in French vessels from any port in America not within the bounds of the United States.

The discussion turned on three points: (1) the alleged necessity to lay an extraordinary duty before an attempt was made to arrange the existing difficulties; (2) the amount of the intended duty, and the time when it should begin to take place; (3) and the practicability of making an arrangement.

On the first point, Mr. Pasquier said that notwithstanding the explanations given here and at Washington respecting the motives which had actuated the government of the United States, still the Act of Congress had in itself an hostile character. The amount of the duty was so exorbitant as to be tantamount to a total exclusion of French vessels, owners of vessels which had sailed without knowledge or any expectation of that measure, and often with previous contracts at a specific price for the freight of cotton, would incur a loss nearly equal to the value of the vessel; the measure was adopted without waiting the result of pending negotiations, and appeared to be intended to compel France to make an arrangement on the terms proposed by the United States and on no other. Under these circumstances, the French government, in justice to its subjects and in order to support its own dignity, was bound to retaliate, and to replace the duties in the same relative situation in which they stood when the negotiations were opened: it was only after this was done that the attempt to accommodate the differences by an amicable arrangement could be renewed.

I observed, in reply, that the inequality in the discriminating duties which now existed against French vessels in consequence of the late Act of Congress was less than that which had for the four preceding years existed against American vessels in consequence of the law of France of April, 1816; that our Act was therefore no more hostile than that law; and that, since the United States had not thought it derogatory to open negotiations on that subject whilst the difference in the relative duties was so unfavorable to them, it was not perceived on what grounds France could refuse to treat until not only an equality of duties had been established, but the inequality in her favor had been restored. There was not, I added, any just reason to complain of the Act of Congress having passed at the time it did. It had been fairly stated in October last to the French government that, if no modification of their duties took place, the United States would be compelled to protect their navigation by countervailing duties on the tonnage of French vessels or on merchandise imported therein. Specific proposals were at the same time made, which, in the view taken of the subject by the United States, might be the basis of an arrangement. To this no other answer had been received but one expressing in general terms the disposition of the French government to settle amicably all the questions connected with the commercial relations of the two countries. To this day, after nine months had elapsed since the date of our propositions, no specific proposals of any kind had been made by France, and we were perfectly ignorant of the terms on which she was disposed to make an arrangement. In the mean while, the navigation of the United States was daily sinking under the weight of the French discriminating duties. If their vessels had continued in the trade with France; if, as was urged in order to show that the inequality could not be such as we represented it to be, one-half of the vessels employed between the two countries were still American, this was an extraordinary exertion, which could not be persevered in any longer. Vessels had been continued so long in an unprofitable trade because they were already thus employed, and in the daily hope of a speedy change. But they had been barely employed, and without profit to the owners. These had been compelled to take freight at the rate of one cent and a half per pound of cotton, while the French vessels obtained two cents and three-quarters. The trade had been ruinous to the American and extremely profitable to the French ship-owners. During the last eight months, from the time when our proposals were made, to the 1st of July of this year, the extra duty paid by us in France on our own produce brought in our vessels, beyond what would have been paid on the same articles if imported in French vessels, had amounted to more than one million of francs, and, including our importations of foreign produce, was equivalent to a duty of 70 francs per ton. We were as yet in every respect the injured party. The extra duty paid by us on American produce since the French law of 1816 exceeded six millions of francs. Whilst this money filled the French treasury, it served at the same time as a premium to the French navigation; it was a tribute levied on us for that double purpose, and to which it was impossible that we could have submitted any longer.

With respect to the day when the Act of Congress took effect, I said that I regretted that a longer time had not been allowed, and repeated the explanations already given on the presumed cause of that circumstance. But I insisted that France had no right to complain of it, since it was an established principle with her that her custom-house duties should be enforced from the day on which the law was promulgated. Thus, the discriminating duty on sugar imported from foreign countries in foreign vessels had, by a law passed on the 7th of June last, been increased from 11 to 16½ francs per 100 kilogrammes; and the importation of nankeens in foreign vessels had been altogether prohibited by the same law. Both provisions took effect from the moment the law was promulgated, and had an injurious retrospective effect on the American commerce. Sugar had been one of the principal articles of importation from the United States to France. An unexpected additional duty of about half a cent per pound was imposed, without any previous notice, on all the sugar brought in American vessels that had arrived subsequent to the 7th of June; and with respect to nankeens, exclusively of other shipments, an American vessel had, to my knowledge, been ordered last autumn to Canton for the express purpose of bringing 220,000 pieces of that article to France, in conformity to the then existing laws; she was daily expected; her voyage was totally ruined in consequence of that prohibition without notice; and the loss in that case alone would probably be nearly as great as the whole amount which, by virtue of the Act of Congress, might be demanded from French vessels which had sailed from France without knowledge of that Act.

How far these observations may have satisfied this government that our Act was perfectly justifiable, I cannot say. But they certainly made no impression with respect to the presumed necessity of adopting here measures of retaliation. Mr. Pasquier insisted that there was an intrinsic difference between a tonnage duty and a discriminating duty on merchandise; he said that, at least in the case where there was no previous notice, the tonnage duty fell exclusively on the ship-owner, and in the present instance was altogether exorbitant when compared with the value of the freight or even of the vessel; whilst the duty on the merchandise, if it did not fall on the consumer, was paid by the owner of the article, and bore some proportion to its value,—a distinction which, if solid with respect to individuals, makes, as you will at once perceive, no difference whatever in a national point of view. But Mr. Pasquier seemed to rely chiefly on the fact that, notwithstanding the discriminating duties of France, we still participated largely in the carrying trade, whilst it was notorious that French vessels would now be totally excluded in consequence of the Act of Congress. Supposing an arrangement to be practicable, a convention could not take effect till after it had been ratified; that is to say, till after the meeting of Congress. It was impossible that France should in the mean while acquiesce in the exclusion of her vessels, and permit ours to engross the whole carrying trade between the two countries. It was therefore absolutely necessary that she should impose a countervailing duty, which should lay American under the same disadvantage as French vessels.

Permit me here to observe that it was with a view to this difficulty that I had, in my despatch to you of the 15th of January last, taken the liberty to suggest the propriety of inserting in the Act of Congress a clause which should give a contingent power to suspend the operation of the Act in case an arrangement should take place. The omission of this provision is, however, much less to be regretted than that the goodness of our cause should have been in any degree impaired by the high rate of duty adopted in the Act of Congress, and by the short time allowed before it took effect. As reciprocity alone was asked, and indeed was offered on the face of the law, I cannot understand, and your despatch does not explain, the reason why it was deemed proper to establish such an inequality. It is difficult to find a common measure by which to compare the value of our old discriminating duty with those of France; and on that account it would have been desirable to have repealed or suspended it when the new tonnage duty was imposed. But there is no calculation by which the discriminating duty of France can be estimated at more than 12 or 13 dollars per ton. A tonnage duty to that amount would have countervailed the French duties and restored the equality, provided our old discriminating duty had been at the same time repealed. Instead of which, this had been preserved and a new duty laid of 17 dollars per ton. Had the Act gone no farther than to establish a fair equality, there would have been no pretence here for retaliation. Had a more distant day been fixed for the Act going into effect, the 1st of October, for instance, instead of the 1st of July, not only the duty would have fallen on no vessel which had not due notice, but it would have allowed sufficient time here to negotiate, and, if at all practicable, to conclude an arrangement.

Finding that the determination of this government to lay immediately a retaliating duty which should exclude our vessels was irrevocably taken, I observed that the rate of duty beyond what was necessary for that purpose was a question not otherwise important than as it might evince the disposition of France with respect to an arrangement. If it was thought that to lay a duty which would only restore the equality had the appearance of acquiescing in the principle of our proposals, there could be no inconvenience in lessening at least the inequality. To make the new tonnage duty equal to ours, to replace the duties precisely on the same footing on which they stood before the late Act of Congress, showed a tenacity on the part of this government which indicated no intention to settle difficulties by an amicable arrangement. But the rate of duty contemplated by the ordinance went still further: our duty of 18 dollars per ton of our measure was less than 16 dollars and half on the ton, French measure; and a duty of 99 francs, which was to be levied according to the French measurement, was in reality at the rate of about 107 francs, or more than 20 dollars, per ton, measure of the United States.

With respect to the question of time, I asked that six weeks should be given from the date of the ordinance before it went into operation. That time was equal to that which had intervened between the date of the Act of Congress and the day on which it was in force. I observed that the ostensible object on the part of France was to prevent our vessels from bringing American produce so long as our duty had the same effect on French vessels, and that as all those which had arrived in the United States prior to the 1st of July were not affected by the new Act, it followed, allowing a month for obtaining and taking in a cargo and a month for the return voyage, that all French vessels arriving in France from the United States before the 1st of September would have paid no extra duty in America. American vessels arriving within the same time ought, therefore, to be admitted without paying the new French duty. I also objected strongly to the clause by which the bond taken from certain American vessels was to be enforced in case the government of the United States did not refund the duties incurred by French vessels which had sailed from France without knowledge of the new Act. It was an indirect charge of injustice against the United States; and if France thought she had any just cause of complaint in that respect, the proper course was to make reclamations, and not to recur to a species of reprisals.

The ordinance has been altered in this last respect; but my other observations have produced no effect. On the question of time, it was insisted that from the moment our law was generally known in the United States our own ship-owners must have, and in fact had, expected reprisals; for every American vessel that had since arrived had, before entering a French port, held a previous communication with persons on shore, in order to ascertain whether a countervailing duty had not been laid.

The duty, it was said, could be laid on tonnage only according to the French mode of measurement; but I understand that an instruction might be given to take, in valuing the duty, the difference between the American and French measures into consideration. Allowing that this government had sufficient motives for imposing a countervailing duty, there was certainly no necessity for making it so exorbitant as to create a difference of more than 70 francs per ton in favor of French vessels. The fact is that the ship-owners of Havre called for a tonnage duty of 100 francs per ton the very day on which the news of the Act of Congress reached that port; that the council of commerce of Paris recommended that measure as well as the premium of ten francs on American cotton imported in French vessels from America, and that this government has acted in conformity with that recommendation. Several of the members of that council own vessels employed in the trade with the United States. Our proposals of October last had been referred to that body; it was their advice which prevented government from acceding to our proposition, and, indeed, from making any to us; their pride and personal interest are both arrayed against us; and if the Ministry continues to listen to them, there is no prospect at this time of making an arrangement on reasonable terms. The merchants will not yield of their own accord until they shall have found by experience that the object they have in view is unattainable. They think that the premium granted by the late ordinance will make the West India and Florida ports places of deposit for our cotton, and thereby secure to them the carrying trade of that article. I told Mr. Pasquier that if we did not make an arrangement before the meeting of Congress the United States could, without the least inconvenience to themselves, prohibit altogether the exportation of our cotton to the West Indies, to Florida, or to any other place where it was not an object of consumption; that they could with the same facility prohibit its exportation to France in any vessels other than those of France and of America; and that these measures would make England, the Netherlands, or some other European country, the only places of deposit, and give us the whole carrying trade.

I took this opportunity of stating the provisions of the Act of Congress prohibiting the intercourse with the British West Indies and American colonies. I explained the circumstances which had led to that measure, and observed that the object was precisely the same for which we now contended with France. In both cases we insisted that commerce, as far as it was allowed between the United States and a foreign country, should be carried on in vessels of the two countries on principles of perfect reciprocity. Great Britain would not allow the commerce between her West India colonies and the United States to be carried on in American vessels. We had prohibited it in British vessels. She had attempted, in order to engross the greater part of the carrying trade, to make Bermuda and Halifax places of deposit; we had then prohibited the intercourse in any vessels whatever with those colonies. There has been no hesitation on the part of the United States in adopting those measures, although the British West Indies consumed our own products to an amount nearly equal in value to those we exported to France,—about 7 millions of dollars annually,—and although a great portion of the products consumed in those islands consisted of lumber, provisions, and other articles for which we could with difficulty find another market, which was not at all the case with cotton and tobacco, the principal articles of our exports to France.

I was induced to make these observations not only in order to show that we had acted with at least as much vigor towards England as towards France, but also to impress the government with a sense of the importance we attached to the object, and of the improbability that we would yield the point. From some expressions used during the conference, and others that had fallen from Mr. de Neuville, I understood that there was some expectation that divisions among ourselves would compel us to abandon the measures necessary to enforce our right to a fair reciprocity. The interest of the Southern planters was alluded to as opposed to any impediment thrown in the way of the exportation of their produce. It is, perhaps, natural enough that private interests should be supposed here to have a very powerful influence everywhere; but it is extraordinary that they should not perceive that the discriminating duties of France, by enhancing the price of freight, are as injurious to the grower of American produce as to the American ship-owner. Under the existing system, the planter or exporter pays for the freight on cotton exported in French vessels two cents and three-quarters per pound, and on that which is exported in American vessels one and a half cent freight and one cent and three-fifths duty. If the discriminating duties were abrogated, freight would be two cents per pound; the planter would pay less, and the American ship-owner would be better paid. The interest of our agriculture requires that there should be the freest competition of vessels of all nations for the exportation of our produce; a competition which cannot be better encouraged than by the mutual repeal of all the duties which fall on vessels either foreign or domestic. The temporary sacrifices which may be necessary to obtain that result will equally fall on the ship-owners and on the growers of produce. It will belong to the wisdom of Congress to decide to what extent it is proper, considering the value of the object in view, to carry the temporary restrictive measures intended ultimately to secure it.

The terms on which a practicable arrangement could be effected were not immediately connected with the subject-matter of the conference. I thought it, however, proper to make some observations on the subject. I stated that the principle of perfect reciprocity for which we contended was founded in justice; that it was impossible that it should not ultimately prevail, since, the power to lay duties being the same on both sides, no nation could prevent her regulations for the protection of her navigation from being met by countervailing measures of a similar nature; that it could not be expected that the United States would subscribe to a treaty by which their navigation should be subject to higher duties in France than those to which French vessels would be liable in America; and that supposing even that peculiar circumstances might render it eligible to make such an arrangement with that country, an insuperable objection would be found in the danger to which we would thereby expose ourselves of being liable to similar demands from all the other great maritime nations with which we had succeeded in making arrangements founded on a mutual abrogation of every species of discriminating duties. I added that the articles of the produce or fabrics of the United States and France annually exchanged by the commerce between the two countries amounted to about seventy millions of francs, whilst the freight was not worth more than four millions; and that, taking in consideration the nature of the articles, not only the commerce was of infinitely more importance to France than the freight, but that it was much more her interest that the expenses of transportation should be reduced to the lowest rate, than that her vessels should participate in it if they could not compete with ours on equal terms. Finally, I observed that we had the same superiority in that respect over England as over France; that the only means we had employed to obtain it had been to create the most unlimited competition amongst our own ship-owners by not intermeddling with their concerns and not embarrassing them with any vexatious regulations; that every other nation might obtain an equality with us by adopting the same means; that France had over us the advantage of greater capital, cheaper vessels, and lower wages; and that it was in their power at any time to navigate as cheap as ourselves, so far at least as respected the navigation between the United States and France, since all that was requisite for that purpose was more economy, attention, and activity on the part of the ship-owners (armateurs), and a repeal of all those regulations which restrained them in the choice of their captains and seamen and in the manner of equipping their vessels.

It was uniformly answered that in point of fact we did navigate cheaper than the French; that it was the general opinion of those concerned in the trade that a compliance with our proposal would be tantamount to a total exclusion of the French vessels from the carrying trade between the two countries; and that they considered it a matter of right that both nations should equally participate in the freight of any commerce which might exist between them.

An allusion was made in the course of the conference to the claim of the French to be treated without any equivalent at New Orleans, in the same manner as the British now are. I did not know of this difficulty till it was occasionally mentioned in conversation by Mr. Pasquier. The pretension appears to me altogether untenable; but I would have wished to know what answer has been given at Washington to the reclamations of the French minister, and what are the President’s intentions on that subject.

I must not omit to state that it had been first intended to extend the premium of ten francs per 100 kilogrammes to cotton imported directly from the United States. This was altered not from any hostile spirit, but on my observing that that premium, so long as it should continue, would make the inequality in the respective discriminating duties still greater, and thereby increase the difficulties of an amicable arrangement.

I have the honor, &c.