660f.116 Auto/37
The Chargé in Czechoslovakia (Gittings) to the Secretary of
State
Prague, October 15,
1928.
[Received October 29.]
No. 1650
Sir: I have the honor to refer to the
Legation’s telegram No. 74, of October 13, 1 p.m., and to previous
telegrams recently exchanged regarding the automobile contingent
situation in Czechoslovakia. As stated in that telegram, I presented
this Note, as amended, to the Foreign Office on the same day. Two other
small changes were the alteration of “to” to “of” (second line of first
paragraph), and the substitution of “the Legation” for “I” (Page 3,
lines 19–20), both for obvious reasons, and the former being for the
sake of clearness. Copies of the Note as delivered are herewith
enclosed.
The feeling of the Legation regarding the specific reference to Austria
and to customs undervaluations have already been set forth
telegraphically; and the Legation is pleased that the Department agreed.
Aside from the difficulty of proof, etc., it may well be that Austria
has a perfectly proper claim to this particular consideration, based on
the Peace Treaties. The few Austrian cars sold here in no way affect,
today, the American situation.
Elimination of the not strictly germane road tax feature was also
considered but this was not referred to Washington because it had no
harmful aspect. The Department’s reply giving the option to remove it,
showed that it also had the same thought in mind. But the Legation
retained that feature, feeling that after all it did not present the
objectionable features of the other, and that, since it was based on
legislation which would necessarily take time to work out, the first
step might as well be made without further delay.
Matters of customs discriminations can be taken up at a later date, or
opportunely in conversation as occasion may arise. But it is obvious
that the main issue today is greater import latitude. Even if American
cars were now on the free-list, no real relief from the present trouble
is possible as long as their admission continues to be denied or
limited. As the Department knows, American automobiles, despite the
other handicaps, could be sold in much greater numbers than heretofore,
if they were permitted entry.
The Department’s various instructions will be carefully followed, and
everything possible will be done. The Department will be kept fully
informed by telegraph as occasion arises.
I have [etc.]
[Page 714]
[Enclosure]
The Chargé in Czechoslovakia (Gittings) to the Czechoslovak Minister for Foreign
Affairs (Beneš)
Prague, October 12,
1928.
No. 1188
Excellency: I have the honor to inform Your
Excellency that the Note of the Czechoslovak Government dated August
22, 1928,55 on the subject of
import licenses for American automobiles has been transmitted to my
Government which after due consideration has instructed me to reply
thereto as follows:
It is noted that the Czechoslovak Government having regard for the
domestic automobile industry and considerations affecting the labor
employed therein is disposed to maintain the system of licensing for
the further period contemplated in the agreement reached at the
recent Geneva Conference for the abolition of import and export
prohibitions and restrictions. In view of that agreement the
Government of the United States hastens to make it entirely clear
that it has no intention of urging the complete abolition of these
restrictions before the expiration of the period agreed upon.
The present interest of the Government of the United States in this
matter relates to the manner in which the contingent system is
administered. The first conference on import and export restrictions
last November enunciated the principle that insofar as such a system
is maintained an equitable allotment of quotas is essential. The
allotment of quotas by the Czechoslovak Government has not in the
opinion of my Government conformed to that principle in respect of
importation of American automobiles. The licensing system now in
force applies with particular severity against the United States for
the reason that quotas allotted other manufacturing countries fully
satisfy or exceed their requirements, whereas the quota allotted the
United States, even though greater in respect of the absolute number
of licenses granted, has nevertheless remained chronically
inadequate and uncertain. To instance the discrimination against
American cars, my Government understands that in the last contingent
year for which figures are available no country other than the
United States exhausted its contingent whereas the American quota
was fully utilized and many hundreds of additional licenses over and
above those granted could have been utilized at any time. The
limitations thus imposed interfere more seriously with the ability
of American manufacturers to satisfy the demand in Czechoslovakia
for American automobiles than they do in the case of automobile
manufacturers in any other country.
[Page 715]
I have been instructed once more to appeal to Your Excellency’s
Government for the fixation of a quota for American automobiles that
will remove this discrepancy between the treatment accorded as to
importation of automobiles from the United States and that accorded
as to importation from other countries. The Government of the United
States does not now ask unrestricted liberty of importation for
American automobiles although it might be justified in doing so in
view of the treatment accorded other countries. It asks, however, as
a matter of fairness and comity that a definitely more liberal
attitude toward American automobiles be adopted by the Czechoslovak
Government than has heretofore been shown.
My Government has viewed with growing concern not only the above
mentioned difficulties to which American trade in automobiles has
been subjected but also the adoption of other measures which tend to
aggravate the situation such as the road tax provisions which as
drawn bear far more heavily on cars of the type manufactured in the
United States than on those of the type manufactured in European
countries. The latter provisions create a discrimination similar to
that of the former luxury tax with respect to which the Legation
made representations on behalf of my Government which tax was
repealed for the purpose of removing precisely this difficulty. My
Government considers that the matters above discussed represent a
situation which is inconsistent with cordial trade relations between
the two countries and it therefore requests that the Czechoslovak
Government reconsider the position taken in its Note under reference
and specifies [specifically] that an adequate
number of licenses be allowed under the contingent for the current
year to care for American cars now held in the Czechoslovak customs,
that greater import latitude be granted during the time that the
contingent system remains in force by according an equitable
contingent for American automobiles and that the application of road
tax be modified so as to place American automobiles on an equal
footing with those imported from other countries. My Government
further requests in the interest of greater stability in the conduct
of this trade and to obviate further discussion between the two
Governments that an indication be given before the beginning of the
next contingent year what import latitude will be granted during the
year.
Accept [etc.]
