New-York tribune., 1901-07-24
PORTO RICAN FREE TRADE.
pporIAMATION TOMORROW - CONPLI
CATION OVER INTERNAL REV-
ENUE LAWS
fsy TELEGRAPH TO THE rRrsusE.l ]

uashington July 23.-Unless something en-
.,-ely unexpected occurs to postpone it for few
..ys President Mckinley on Thursday will is
,s PROCLAMATION declaring absolute free trade
-slations between the United States and Porto
pica The proclamation Will be promulgated
spontaneously in Porto Rico. arrangements to
.,st end having already been made. 1t is ex-
,ected that the document will be brief, merely
recittng the fact that it is issued in compliance
9TH clause Of the Foraker act which provides
,hat whenever the Legislative Assembly OF
porto Rico shall have enacted and put into oper-
.,ion a system Of local taxation to meet the
necessities OF the government Of Porto Rico, and
shall by resolution duly passed $50 notify the
president, he shall make proclamation thereof
snd thereupon all tariff duties on merchandise
and articles going into Porto Rico from the
United States coming into the United States
from Porto Rico shall cease, and from and after
rch date all such merchandise and articles
shall be entered at the several ports OF entry
free Of duty, and in no event shall any duties be
collected after the first day Of March. 1902. on
merchandise and articles going into Porto Rico
from the United States coming into the
United States from Porto Rico"
Everything is in readiness for the proclama-
tton both in Porto Rico and the United States
and when the changed condition is brought
about there will be hitch anywhere along
The line What is known as the Hollander law
contains a scheme Of local taxation designed
to produce revenues sufficient for the support Of
the Porto Rican Government, that the aid
extended to the island by levying upon its COM
raerce Is per cent of the Dingley tariff rates is
70 longer needed The sources OF revenue pro-
vdded by the Hollander law are three in num-
ber-a tax on real estate and personal property
an excise tax, and the customs duties collected
or imports from foreign countries. Every cent
Of the revenues thus collected will go into the
Porto Rican treasury for the exclusive use and
benefit Of the insular government and people
Not dollar Of 1t will find its way to the United
States Treasury.
The only puzzling feature about the new situ-
alton 10 officials in Washington is as to the
method to be employed to apply this country's
internal revenue laws to articles that hereafter
will be imported from Porto Rico, and that are
subject to taxation in the United States. To-
bacco and rum in all their forms. for example
that may be shipped here from Porto Rico. must
first pay the tax prescribed by the .Gte, aai
nue. laws Under the Foraker act this tax was
easily collected because all importations from
the island entered the country through the Gus
tom house In future, however, no declaratio
Will have TO be made. and still the internal reve-
pue tax must be collected by some means Mr..
Yerkes Internal Revenue Commissioner. is now
6evotins himself to study Of this question, and
hopes TO have il solved in a day or two Only
by act Of Congress the internal revenue laws
Of the United States be extended to Porto Rico,
and this has not yet been DONE because the in
oustries Of the island not strong enough yet
10 stand the heavy burden Of that tax If the
internal revenue laws had been extended TO
Porto Rico the problem confronting Commis-
s,oner Yerkes would be comparatively simple.
no co7,I5 s-a Of bllrSaI1 ISL
and to collect the tax by the sale Of internal
revenue stamps. 1t is possible that he may
sign agents TO the island TO watch and report
upon the export to the United States Of articles
subject TO the internal revenue tax, so that when
ali such goods are landed here the tax may be
collected before the articles enter the market.
II is presumed that in all cases products of Porto
Rico that subject to internal revenue tax
when brought to this country, and which pay
local excise tax under the Holiander law, will be
exempt from the latter tax by special act of the
Porto Rican legislative assembly. Otherwise
sueh articles would be burGened with double
tax and thus the anomalous spectacle would be
presented of our internal revenue system acting
as tariff on certain products Of Porto Rico
Spontaneously with the completion of prep
arations for prociaiming free trade with Porto
Rico the Treasury Department is ready
TO refund the customs duties paid on imports
from the island between the dates OF the Paris
Treaty and the passage of the Foraker act, un-
der the terms Of the recent Supreme Court de-
cisions. This rebate viii be paid only to those
WHO SlletEu IofIua- pEOteSA al lLS TINE the
duties were paid and whose claims can be
substantiated R ]. Tracewen. Controller Of
the Treasury. In elaborate and able opinion,
has advised Secretary Gage that he is author
lied TO make the rebates out Of hand and with
out waiting for special Congressional action or
sanction. Mr Traceweii bases his opinion on
q law passed in 1915 to meet a situation that
fits the present case and which empowers the
Secretary to pay rebates out Of any funds in
the Treasury not otherwise appropriated. Mr..
Gage said to-day that he was ready to begin
paying rebates Immediately. Assistant Sec
retary Spaulding, who has charge Of the Gus
toms service estimates that the total rebates
will not exceed 100000. There is plenty Of
money in the Treasury unappropriated to meet
every claim that comes to properly certified"
approved claims amounting TO about S43S.Coo,
but as soon the other claimants learn that
are ready and able to pay without waiting
on Congress. / suppose they VIII ask for their
money
The immediate payment Of rebates advised
by Controller Tracewel applies only TO cases
of the collection under protest OF customs duties
on merchandise and articles that come from
Porto Rico into the United States. The Con-
troller saws there is no authority in the law for
the Secretary OF the Treasury to refund money
Illegally collected customs duties IN Porto
Rico between the signing OF the treaty OF peace
and the passage Of the Foraker act This class
Of claimants will have to apply TO Congress Ior
relief. and there is no doubt that early IN the
next session special appropriation Dill making
provision for them will be passed
Two proclaraations will be issued on Thurs
day, the second declaring the establishment o,
civil government in Porto Rico. Although civil
government has existed for many months IN
Porto Rico, Governor Allen, up to the time ne
the formal notification Of that fact from the
President, in order that the moneys collected
under the Foraker act might not be placed a.
the disposal OF the Porto Rican legislature, nul
could continue TO be used for the benef1t or the
island, under the direction Of the President
The effect OF an earlier notification would have
been a proclamation by the President recogniz-
Ing the establishment OF civil government ana
the turning over TO the insular treasury for .ns