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The above statement shows the commercial operations of Leghorn to be in a flourishing condition, and the day is not distant when this city will rank in importance as the second port of the Mediterranean.

The principal articles of export from this port to the United States are marble, rags, straw goods, olive oil, silk, candied citrons, soap, wool, alabaster works, feathers, and wine, the latter in small quantities. Every one who has been to Italy is familiar with the fine flavor of many of the 'T'uscan wines, especially that known as Aleavico, but as yet no effort has been made to export it, except in small quantities, the general opinion being that these wines are not of sufficient strength to bear shipment; but recent experiments have shown that this objection is not well founded, and we may confidently expect that many "choice brands," now only known to the natives of Italy and tourists, will speedily find their way to the markets of the world.

Now that the new revenue law, requiring all invoices of shipments to the United States to be verified, has gone into effect, consuls will be able to report the exact amount of exports from foreign ports, as well as to give valuable information respecting the quality and character of each shipment, with a view of enabling our manufactures to compete with the foreign shipper. During the past quarter one hundred and thirteen invoices have been verified at this consulate.

The following table will show the character and quantity of said shipments, together with the sworn value of the same, at this port:

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The amount of the shipments to the United States from this port during the past quarter cannot be taken as an average for the whole year, for the reasons above referred to. The heavy rates of insurance in consequence of the "war risk" has prevented many shippers from sending forward their goods, and hence the total value of these exports during the quarter, as shown by the invoices verified, is only $228,059 46, whereas in ordinary times they would have reached twice the above amount. With the present unity and prosperity of Italy guaranteed, the rapidly increasing importance of this port rendered certain, and the confident assurance that our fearful domestic strife has reached the

culminating point, so that our commerce can speedily assume its former prosperous course, we may safely estimate that the exports from Leghorn to the United States will soon reach $5,000,000 annually.

At present the balances in our commercial operations with Italy are all against us. Even the purely American production, petroleum, which has been very extensively introduced into this market since my arrival here, comes to Italy from England, and aids in making up the sum total of English exports.

The following table shows the amount and value of our exports to this port during the year 1862:

Alcohol, barrels, 7,610..

Staves, 19,120...

Beeswax, casks, 7....

Logwood, tons, 709.

Logwood, extract, boxes, 600....

$70, 730 00

Estimating the amount of the exports from this consulate to the United States during the year 1862 at only $2,000,000, which, I presume, is much below the true value, and we have a balance against us of $1,929,270. By inaugurating direct trade with the Mediterranean, we can change these balances to our side of the account, or at least we shall then be able to pay for our imports from Italy with exports of American manufacture.

I regret to say that I have not yet been able to secure sufficient information upon the extent and value of the trade of the Mediterranean to enable me to complete my report upon that subject. I have solicited information upon this point from our consuls at the several ports of the Mediterranean, Adriatic, and in the Levant, but the few statements which they have been able to furnish me are not as satisfactory as I desire, and I shall be obliged to pursue my inqui ries in another direction. I shall continue my investigations upon this subject, for I consider it one of much interest and importance to us. The early completion of the Suez canal renders it certain that the great India and China trade will reach Europe and the United States through the Mediterranean; and Marseilles, and not Liverpool, will be the European market for India goods. It is evident, from these indications of activity, that the commerce of the Mediter ranean must rapidly increase.

TWO SICILIES.

PALERMO. LUIGI MONTI, Consul.

MAY 14, 1862.

I have the honor, herewith enclosed, to hand the department, No. 1, quarterly return of arrivals and departures of American vessels at Palermo; No. 2, totals of exports, and values of the same, in American vessels; No. 3, totals of exports in foreign vessels; No. 4, totals of exports to the principal ports of the United States in American and foreign vessels; No. 5, navigation and commerce of the United States at Palermo-all for quarter ending March 31, 1862.

I take this occasion to call the attention of the department to the fact, as it may be noticed in the totals of exports, that some vessels are set down as having no cargo, and others as having a very small quantity. These vessels, however, have taken a full cargo, but the merchants who have loaded them have omitted to have the invoices certified at this consulate, which is the only reliable means by which I could gather all the particulars regarding the cargo and its value.

I cannot very well account for this, unless that, as these merchants are mostly producers of the merchandise, they prefer having it appraised in America rather than set it down at the market price here, which is very much higher than what it really costs to them; for these very merchants themselves set the market price for fruits at $1, or $1 25, or $1 50 per box in Palermo, when they actually cost them from 60 to 75 cents, as these are fruits which come from their own gardens or they contract for from small farmers. In shipping it for America, I would only certify their invoices at the current market price, which is set by themselves so high; hence they prefer having it appraised in America.

DECEMBER 4, 1862.

According to the instructions issued by the department in circular No. 17, I communicated the provision of the law (section 22 of an act increasing temporarily the duties on imports, and for other purposes) to the royal commissioner in Sicily, and inquired whether the "privilege of purchasing supplies from the public warehouses duty free" was or would be extended to the vessels-of-war of the United States.

The following is a translation of the answer which I have received. Another copy I shall transmit, with the same mail, to the Secretary of the Treasury:

Royal commissioner in Sicily, No. 3644.

PALERMO, December 2, 1862.

SIR: I have received from the minister of foreign affairs a reply to the question which, according to the desires expressed by you, I proposed to him in October last, in reference to the custom-house privileges which American war vessels enjoy in the ports of the royal dominions.

The minister writes to me that the privileges which are enjoyed by foreign war vessels, and hence by the American, are specified according to the present law in the 29th article of the dispositions preliminary to the tariff, as follows: "Exemption from import duty for the provisions of board of foreign derivation existing on board foreign vessels-of-war, which are used on board the same during their stay in the ports of the kingdom, and which are re-exported to foreign ports. "Exemption from export duty for the provisions of board taken from the king dom and shipped upon national or foreign war vessels which are in port and about to clear for foreign parts.

"Exemption from duty of import and export for the provisions of board of foreign derivation which, by foreign or national war-vessels, are temporarily deposited, and afterwards exported out of the kingdom."

I hasten to notify you of these dispositions in the name of the government, observing to you that, according to these, it would not be possible to grant to American war vessels all those favors which the cabinet of Washington seems to desire, and which it offers reciprocally to our war vessels that enter in American ports.

A. DE MONALE, Royal Commissioner.

LUIGI MONTI, United States Consul.

NOVEMBER 22, 1862.

In answer to the esteemed letter of the royal extraordinary commissioner, dated 18th October last and numbered 921, the minister of foreign affairs hastens to inform him of the reduction of the import duties as conceded by the watchful legislation to the foreign vessels-of-war. The same were enumerated in the 29th article of the preliminary arrangement of the tariff, the contents of which is the following:

"Exemption of the duties of importation for the provisions of board and victuals of a foreign origin forthcoming from foreign vessels which are consumed on their own board during their stay in the ports of the state, or which are reshipped for abroad.

"Exemption of the duties of exportation for the provisions of board and for the victuals taken out from the state and embarked on national or foreign vessels staying in port or going abroad.

"Exemption of the duties of importation and of exportation for the provisions of board and for the victuals of foreign origin, which, from foreign or national vessels, are temporarily deposited, and hence exported from the state." The undersigned prays, therefore, the extraordinary commissioner to be pleased to communicate the foregoing to the United States consul at Palermo, giving him to understand how impossible would it be for the actual state of our circumstances to allow the American men-of-war all those favors which the government of Washington seems to desire, and which the same government offers in reciprocity to our vessels to begin with.*

General report of trade at the consulate of the United States at Palermo for the year ending September 30, 1862.

The usual trade with the United States in this consular district has not been much affected on account of the war in America. The export has been, on an average, equal to that of former years. The customs and sanitary regulations of the new government of the kingdom of Italy were put in execution on the 1st of January, 1862, by which the port charges and sanitary fees have been considerably increased.

The new coin of the kingdom of Italy in lire and centesimi, equal to the French francs and centimes, has become now the legal tender. Vessels are subject to a port charge of fifty centimes per ton whenever they perform a commercial operation, and twenty centimes per ton for sanitary fees. But if a vessel arrives in any port of the kingdom direct from Turkey, Egypt, Syria, the islands of the Ottoman Empire, America, (both the United States and the Southern American republics,) the western coasts of Africa, (except Morocco,) and all the countries beyond the Cape of Good Hope, the sanitary fees are then doubled, viz., forty centimes per ton.

There is no signature to the original letter.

Ports.

Brimstone.

Sumac.

Corkwood.

Rags.

Filberts.

Brimstone.

Sumac.

Corkwood.

Rags.

Filberts.

Statement showing the total of exports from Palermo to the United States for the quarter ended December 31, 1861.

Wines.

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Statement showing the totals of exports from Palermo to the principal ports of the United States in American vessels for the quarter

ended December 31, 1861.

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Wines.

Essences.

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45, 295

105, 158

Value.

Value.

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