611.5131/748d: Telegram

The Secretary of State to the Chargé in France (Armour)

367. Department has today made public summary of communication set forth [in] Department’s 361, October 16, 9 p.m. Please inform Foreign Office that it was deemed necessary to do so in view of garbled reports appearing in the press concerning this Government’s communication.

Department’s statement also contained the following comment:

“The Government of the United States made no request to the French Government that American customs agents be given the right to ask French business men to submit their private books and records.

“It has been stated in press reports from Paris that American customs authorities have been making it a practice to appraise goods on the basis of cost of production of similar goods in the United States. This is entirely incorrect. Apparently these reports have reference to determination of ‘United States value’ in cases where appraisers are unable to satisfy themselves as to value in the country from which the goods are exported to the United States. ‘United States value’ is a technical term which, as defined in Section 402 of the Tariff Act of 1922,28 is an approximation of foreign value, since it is calculated by deducting from the wholesale price in the United States the amount of duty payable, cost of transportation, insurance and other necessary expenses from place of shipment to place of delivery, and an allowance for commissions, profits and general expenses. United States value, in view of these deductions, is obviously much lower than the selling price of imported goods in the United States.

[Page 830]

“Since the French Government objected to investigations of private books and records in France by American Treasury agents, American appraisers occasionally are not able to obtain suitable data as to foreign or export value, and necessarily must place some further reliance on United States value. The Department of State is advised, however, that there is no reason to believe that any considerable amount of increased valuations has thereby resulted. Ordinarily foreign or export values can be ascertained to the satisfaction of appraising officers.”

In connection with the foregoing Department points out for your information that cigarette paper case, which has attracted more attention than all others, originated prior to understanding limiting activities of Treasury agents in France.

Press reports that the United States has requested France to allow Treasury agents to operate on lines on which they operated prior to understanding reached last fall obviously are distortion of oral statement you were authorized to make pursuant to Department’s 361. The latter instructions were sent you, not because this Government has any particular interest in such an arrangement, but rather in view of intimations by French officials that the French Government might welcome a procedure intermediate between that abandoned last fall and the present arrangements. The oral statement merely indicated that the United States would be favorably disposed toward such a proposal if France cared to make it. On these facts, it is the more regrettable that the French Government has permitted garbled reports of your oral conversations to become current to the effect that the United States wishes to reopen this question. Unless you see objection you should orally so inform the Foreign Office.

  1. 42 Stat. 949.