653.116/173
The Minister in Portugal (Caldwell) to the Secretary of State
[Received September 17.]
Sir: Referring to the Department’s instruction No. 118 of July 24, 1935,17 enclosing a memorandum of a conversation with the Minister of Portugal, Dr. João Antonio de Bianchi, as to the possibility of arriving at a solution of the problem of flag discrimination, I venture to call attention to the new commercial agreement with France (reported in my despatch No. 733 of September 3, 193517), in which, by [Page 670] applying severe discrimination against French shipping, Portugal has secured important concessions, especially a large quota for sardines which will go far to absorb the Portuguese surplus and to relieve the sardine industry from recent difficulties.
Having again used discrimination against shipping to secure commercial concessions of an important character, I believe that the attitude of Portugal in other cases will be measurably stiffened, and that Mr. Bianchi’s suggestion of some reasonable solution of the problem of flag discrimination with the United States may be allowed to lie on the table without positive action, at least until after July 1, 1936, when flag discrimination, which now applies merely to continental Portugal and the adjacent islands, will be extended automatically to the Portuguese colonies as well.
In these new circumstances, I venture to suggest that, at the proper time, Mr. Bianchi’s hands might be strengthened by a more or less formal inquiry here, under instructions, stating the American position and requesting information as to the possibility of a solution.
The reply to such an inquiry, which could not be merely neglected, might not be entirely satisfactory, but would at least serve to clarify the issues, with a reasonable possibility of hastening an acceptable solution.
Respectfully yours,