Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-11-06
TIME TOSTR|KE BACK
Germany's Action Forces Re-
taIiatory Measures.
TARIFF WAR COMPELLED
American Proposal Regarding Elk
port Duty on Potash Rejected.
NEGOTIATIONS AT AN END
Commercial Adviser Davis Will Rec
ommend That Maximum Rates of
the Tariff Law Be Enforced.

BERLIN, November 5.-Germany has
rejected the American proposal in con-
nection with the export of potash from
that country contracted for by American
interests. This proposal sought to halve
the difference under dispute caused %!
the enactment of the potash bill by Ger
many last May. The American Contrac-
tors would thus have accepted a loss OF
$14, 600 OOO-that is. 100000 annually for
seven years, which constituted the life
of their contracts. The new law limits
the production to a certain amount at
each of the mines and levies tax OF
Is marks per hundred weight on all
production in excess of the stated
amount.
Germanys refusal to accept the Ameri-
can proposal is on the ground that II
does not accord with the principle OF the
new potash law, and it is announced that
the government cannot consider any pro-
posals not In harmony with that act.
If the Americans have proposals 10
make in consonance with that law 1t VIII
consider them. Various conditions are
mentioned in the reply framed by the
German government, all of which are OF
an uncompromising character.
Herr Sydow, minister of commerce, call
ed upon David jayne Hill, the American
ambassador, this evening and handed %
him the reply. which embodies letter
to the minister from Herr kempner'
chairman Of the German potash syndf-
cate. Herr Sydow emphasized that ne
was not acting officially. but only as a
Joint mediator with Ambassador Hill In
an endeavor to adjust the dispute.
Negotiations at an End.
The American ambassador transmitted
the reply to M. H. Davis, the commercial
adviser Of the American Department OF
State, who has been here for several
weeks investigating the potash situation
with representatives of the American
companies concerned in the dispute
Mr. Davis and the others held a meet
ing tonight and dcided, in view of the
wholly unsatisfactory reply. to leave Ber-
lin Immediately. Mr.. LAWS. after ca
bling his recommendations to the State
Department Will proceed to Vienna upon
another mission.
Mr.. Davis points out that some of the
contracts in question were made as far
back as 1907, while others were made
between June 80 and October /, 1909. He
says that the United States government
made representations to the German gov
ernment Ave months before the recent
law was enacted, protesting that such
law would destroy the value OF the con-
tracts previously made with American
buyers of potash salts, and would operate
to embarrass the negotiations which were
then in progress between the two gov
ernments for the granting OF the mini
mum rates upon the exports and imports
of all articles of commerce between the
United States and Germany.
When 1t was explained to the United
States government in January last that
there would be no export duty on potash.
as had previously been supposed. there
- &c nvfva
tion on the part of the German govern
ment that would impair the American pot
ash contracts.
All other questions relating to the COM
merce between the two countries having
been satisfactorily adjusted, the CONNER
cial agreement between Germany and
the United States was drawn up and
signed by the respective representatives
Of both countries, by which each country
granted its minimum customs rates to the
other.
Soon after the agreement was signed
the potash bill again came before the
reichstag. somewhat changed In form,
but providing for tax on production in
contracts with Americans or owned
largely by American capitalists would be
unabN to operate without having to pay
a tax on their output very much In ex-
cess of the value of the potash. Such a
measure of law was regarded by the
American government as imposing bur-
dens on a commodity largely purchased
by American citizens. which would not
countries. but would apply substantially
to all the exports of potash to the United
States then under longtime contracts.
Protests by United States.
Protests were made by the American
government against the passage Of the
law. the practical effect of which would
be to tax American commerce and de-
stroy the advantages gained under con-
tracts made between German mines and
American buyers before the project of the
law was formulated.
Mr.. Davis points out that the tariff law
of the United States contains provisions
commerce to be enjoyed by American
citizens so long as another nation does
not alter. through change in its laws
or through new enactments. the COM
mercial relation as established at the
time of making commercial agreements
or treaties When the conditions are
changed then a very serious development
follows, for the President is obliged to
take cognizance of the change.
The mission of Mr. Davis to Germany
has been to learn as much as possible as
to the underlying reasons that prompted
the German government to pass the
potash law. against which his govern
ment lad protested vigorously, and which
has in the four months following its
passage heavily taxed the American i'm
ports of potash and destroyed the value
of contracts covering many millions Of
dollars worth of potash salts. of which
Germany has an abundant supply for ex-
port.
The American contracts are low in
price. but they were made at a time when
the Kali syndicate was dissolved, ami
when other mines would make as low
prices. If the syndicate did not again
come together and establish higher and
more profitable prices. These contracts,
however. would enable the German mines
to fill them at fair profit had not the
potash law been passed restricting their
output and levying a tax upon excess 8
mining.
Only One Course Open.
The failure to ccme to an agreement
with the German government and the
Kali syndicate by which the terms of the
American contracts in their full interest
can be carried out by the mines leaves no
other course open to Mr.. Davis than to
advise his government to this effect, to-
sether with his recommendation that the
time has arrived when under the terms of
the American tariff law its maximum
provisions shall have to go into effect
In this respect. 1t is pointed out, the law
is automatic as we'll as mandatory 1t
being only required to ascertain the
changes in the conditions as to commerce
which make the Presidents proclamation