Memorandum from the French Embassy.
The tariff law of the United States of July 24, 1897, provided in its section 3 that, on five articles out of a total of seven hundred and five, diminutions could be granted to foreign nations, the said five being argols and wine lees, brandies, champagne, still wines, and paintings and statues.
Section 4 provided, besides, that during the two years following the President of the United States could conclude reciprocal treaties of commerce granting to foreign trade, for a period not exceeding five years, reductions not exceeding 20 per cent, such treaties to be ratified by the Senate.
[Page 318]The French and American Governments concluded agreements in conformity with both sections. By the arrangement of May, 1898, concessions on four out of the five before-mentioned articles were granted to France, who, in exchange, admitted to the benefit of her minimum tariff American canned meats, manufactured and prepared pork meats, lard and its compounds, fruits (fresh and dried), common wood logs, sawed or squared timber or lumber, paving blocks, etc. Champagne was left out. This agreement is still in force.
France was the first to avail herself also of the provisos of section 4, and she signed with the United States in July, 1899, another agreement by which she granted, with the exception of nineteen articles, the whole of her minimum tariff to the United States. Various concessions were granted in return by the United States on a variety of French goods, champagne being again excepted. The claims of that article, which has practically no competitor, were not pressed by us, and the American Government, on the other hand, did not seem to attach particular importance to eventually according a reduction on it, as the same convention provided, in its Article III, that if, at any time, such a reduction was obtained by any other nation, France would have it, too, ipso facto, without having any additional concession to make.
The convention of 1899 was submitted to the French Parliament in accordance with a presidential decree of December 6, 1899, by the ministers of foreign affairs, commerce, agriculture, and finances. Stress was laid, in the “exposé des motifs,” on the fact that the first of the intended conventions of this sort to be concluded by the United States was the French one, this being considered as a sign of good will and friendship.
But no further action could be taken.
No similar move was made by the Federal Government. The treaty was never submitted to the United States Senate, and after four years’ delay the French embassy was informed, in June, 1903, that it was to be considered as abandoned. Things remained so up to the present year.
In this year the eventuality foreseen by Article III of the dead convention of 1899 became fact, and a reduction on sparkling wines was granted to a foreign nation, namely, Germany. We thought, therefore, that it would not be inappropriate to ask for a similar advantage to be granted us.
As French champagne is alone of its kind and does not practically compete with any home produce, and in view also of the dispositions shown by the Federal Administration in 1899, it seems that the matter ought to have been easily settled. We offered, in exchange, to grant our minimum tariff to Porto Rican coffee. As certain qualities of this product have no market except in France, the proposed advantage was a serious one for American interests.
This was considered by the Department of State to be quite insufficient in view of the quantity of champagne purchased in America, and it demanded that a considerable number of articles be added by us; most of them competing directly with our own manufactures and some being among the very ones excluded in that convention of 1899, which had granted to France concessions not only on sparkling wines, in case any other nation should obtain them, but on a large quantity of other articles besides.
[Page 319]The French ambassador profited of his presence in Paris last summer to recommend that all possible concessions be made in order to reach an agreement; he did so, invoking considerations which were not all of them mere commercial ones. The French Government yielded in the measure that circumstances rendered possible. Protectionist tendencies which prevail in America are not without a very strong support in France, too; and in the same way as in the United States the Government is bound to move within the limits assigned to its action by previous votes of the Chambers. It would vainly ask for more.
The Federal Government can offer us reductions on only one article, champagne, and though many of our manufacturers are loud in their demand to obtain also the benefit of reductions, we have to give up asking for any. The French Embassy has received several such demands; one arrived yesterday from the Grenoble glove makers, but it does not seem that there be any chance for them.
In the same way and for the same reasons the concessions that France can make are limited in number and can not presently be changed; they are, however, of serious importance for the American trade. To Porto Rican coffee the French Government has decided to add “colonial products “(that is, besides coffee, cocoa, chocolate, vanilla, muscades, etc.) and petroleum, being empowered to do so by previous votes of Parliament.
Of this the Department of State was apprised, but it declared again that to compensate the single article champagne those concessions were not sufficient, and insisted once more on a certain number of articles being added. For those articles the French Government would be obliged to go before the Chambers, and there is not the slightest doubt that any such proposal would be rejected. For not only are the reductions demanded on champagne more than compensated by what we offer, but several at least of the additional articles recommended by the State Department would thus be submitted to lower duties in France than those imposed in America on the same articles made in France.
That the concessions offered are not insufficient ones is shown by the value of the imports which would be affected by them. According to American statistics the value of the champagne imported into the United States in 1905–6 was a little above $5,500,000, and from the same statistics it appears that the value of coffee, colonial products, and petroleum imported into France during the same year was worth several hundred thousand dollars more. And this must be taken in connection with the fact that if the total importation of American goods into France is considered it will be found that 67.08 per cent are admitted free of duty, 12.78 per cent are admitted under the minimum tariff, 20.14 per cent only under the maximum tariff. French goods coming to America are admitted free of duty to the rate of 18.3 per cent; with the benefit of reductions under section 3, to the rate of 5.7 per cent; and under the ordinary tariff (a much higher one than our maximum tariff), to the rate of 76 per cent.
The Department of State alleges, on the other hand, that as American coffee, petroleum, etc., are in fact presently placed under our minimum tariff, what we offer to grant conveys no new advantage.
[Page 320]This is simply reproaching ns for our conciliatory spirit and for what we considered a proof of friendship and good will, for which some reciprocal disposition might have been expected.
The concessions on coffee and petroleum were granted to the United States some years ago, in view of some specific advantages. Since those advantages came to naught they have been continued for nothing, out of mere good will. We were very far from suspecting that the result would be that we should be told that the Federal Government considers itself as having now a title to these same concessions, and wants them to be continued and others added besides before we can have a reduction of $2 per dozen on champagne.
As a fact, the Federal Government signed with France, in August, 1902, a convention stating expressly that the minimum tariff would not be applied to Porto Rican coffee after the 23d of February, 1903. The Department of State had fully recognized in advance that this lower rate could not be continued without a compensation. (Letter of the Department of State of December 2, 1902.) Yet the French Government maintained the status quo, first, with the thought that the convention of 1899 would be ratified, and after that, in a friendly spirit, for nothing.
The same with petroleum. The reduction was granted in 1893 in view of compensatory advantages; those advantages were actually granted by the tariff law of 1894 (Wilson tariff), which established favorable rates on a quantity of goods of special importance to us, such as silk, woolen, and cotton manufactures, gloves, wines, jewelry, porcelain, furniture, etc. When the Dingley tariff came into force, the decree on petroleum should have been repealed, but the French Government took into consideration the possibility of coming to an agreement under section 4 of that tariff. Since that agreement, which was to have secured permanently the said advantage to that American article (and to many others), came to naught, the status quo has been maintained also, in a friendly spirit, for nothing.
This has lasted now, it is true, a certain number of years. But the greater the number the greater the reciprocal good will, we should have thought. We are nevertheless led to understand, on the contrary, that on account of our having maintained these concessions so long they are not concessions conspicuous enough to compensate champagne; people are accustomed to them and must have something different besides.
It is impossible for the French Government to accept these views. Were it inclined to do so they would have no chance of being ratified by Parliament. Previous votes of the Chambers allow the French authorities to offer more than equivalent compensation for that single article champagne. The parallelism between the nature of articles is in itself satisfactory, as neither sort really competes with home manufactures; the values represented are, as shown above, in favor of the United States. An agreement ought therefore to be an easy matter, and a disagreement would be fraught with serious inconveniences.
A word might be added on a connex question. In the course of the pourparlers allusion has been made several times to the granting to France, as well as to other countries, of the custom-house facilities and simplifications recently adopted by the Federal Government and embodied in the German treaty. France is fully aware of the usefulness [Page 321] of those modifications and has expressed concerning them her sincerest satisfaction.
But if any desire existed to have them taken into account in the present negotiation concerning champagne, it would be appropriate to recall that they are very far from equaling the facilities of the same sort granted by France to the United States, as well as to other countries. Our tariff is a specific and not an ad valorem one. All that the customhouse officials have to do is to see whether the imported article consists, for example, in shoes or in machinery—an easy task. If it is machinery, the official asks so much per 100 kilograms; if it is shoes, so much per pair, and that is all. The importer has not the endless troubles which the other system implies, with its appraisements and reappraisements, lawsuits, fines, and, without speaking of loss of money, those delays which often mean loss of custom. The Limoges porcelain case has offered, not later than last summer, a conspicuous example of, to say the least, the inconveniences of the system to French trade. The formalities still in force, and some new ones recently established, have also prevented French importers from feeling that they meet here with a treatment as favorable as that which we grant to American importers on French soil. We do not, for example, oblige American producers to label their food products in French, while the French producers are bound now to add a label in English, for the American consumer to well know what he purchases. And the law is carried to such a length that an importer of “véritable liqueur bênédictine,” the three words being the same in the two languages, has been ordered to have new labels on his bottles because the accents might puzzle the purchaser. If France imitated such devices and obliged American exporters to label their food products in French, and refused to tolerate any mistake in the accents, trade here would not be long to understand what trouble and what loss of time and money such a system entails: the more so as the Federal administration refuses to assume the responsibility of stating that a label submitted to it in advance for approval is correct and can be used safely; people are left in doubt and must take their chance.
This is said not at all to diminish in any way the importance of the recent reforms granted by the present administration; they are and should be highly appreciated. But they can not be taken into account in the present pourparlers, as France grants more to the American producers and spares them those formalities which do as much to cramp foreign trade as the tariff itself.