By the first section of an act of Congress passed on July 13th, 1832 the tonnage duty on Spanish ships arriving from the ports of Spain previous to October 20th, 1817, being five cents per ton.  That act was intended to give effect on our side to an arrangement made with the Spanish Government by which discriminating duties of tonnage were to be abolished in the ports of the United States and Spain on he vessels of the two nations.  Pursuant to that arrangement, which was carried into effect on the part of Spain on May 20th, 1832, by a royal order dated April 29th, 1832, American vessels in the ports of Spain have paid five cents per ton, which rate of duty is also paid in those ports by Spanish ships; but as American vessels pay no tonnage duty in the ports of the United States, the duty of five cents payable in our ports by Spanish vessels under the act above mentioned is really a discriminating duty, operating to the disadvantage of Spain.

Though no complaint has yet been made on the part of Spain, we are not the less bound by the obligations of good faith to remove the discrimination, and I recommend that the act be amended accordingly.  As the royal order above alluded to includes the ports of the Balearic and Canary islands as well as those of Spain, it would seem that the provisions of the act of Congress should be equally extensive, and that for the repayments of such duties as may have been improperly received an addition should be made to the sum appropriated at the last session of Congress for refunding discriminating duties.

As the arrangement referred to, however, did not embrace the islands of Cuba and Puerto Rico, discriminating duties to the prejudice of American shipping continue to be levied there.  From the extent of the commerce carried on between the United States and those islands, particularly the former, this discrimination causes serious injury to one of those great national interests which it has been considered an essential part of our policy to cherish, and has given rise to complaints on the part of our merchants.  Under instructions given to our minister at Madrid, earnest representations have been made by him to the Spanish Government upon this subject, and there is reason to expect, from the friendly disposition which is entertained toward this country, that a beneficial change will be produced.

The disadvantage, however, to which our shipping is subjected by the operation of these discriminating duties requires that they be met by suitable countervailing duties during your present session, power being at the same time vested in the President to modify or discontinue them as the discriminating duties on American vessels or their cargoes may be modified or discontinued at those islands.  Intimations have been given to the Spanish Government that the United States may be obliged to resort to such measures as are of necessary self-defense, and there is no reason to apprehend that it would be unfavorably received.  The proposed proceeding if adopted would not be permitted, however, in any degree to induce a relaxation in the efforts of our minister to effect a repeal of this irregularity by friendly negotiation, and it might serve to give force to his representations by showing the dangers to which that valuable trade is exposed by the obstructions and burdens which a system of discriminating and countervailing duties necessarily produces.