Papers relating to the foreign relations of the United States, 1929, Volume III

881.512/63

The Diplomatic Agent and Consul General at Tangier ( Blake ) to the Secretary of State

Tangier , December 4, 1928.
[Received December 21.]

No. 343

Sir: I have the honor to inform the Department that in the latter days of October, my British Colleague called upon me, and exposed to me the financial difficulties of the Tangier Administration, and the desire of the latter to increase, from time to time, as conditions might demand, various taxes, notably the consumption taxes on imported commodities. He explained that such increase should be imposed without previous warning to the public, otherwise the Administration might find its contemplated measures forestalled by speculative forward purchases of the local traders. A draft law had, therefore, been drawn up, purporting to confer upon the Administration powers to this effect, and the British Consul-General stated that he had come, as President of the Committee of Control under the Tangier Statutes, to ask me to obtain the assent of the American Government to the law in question, insofar as it might affect the citizens and protégés of the United States in the Tangier Zone. I replied that, since the United States Government had not given its adhesion to the Tangier Convention,⁴² it would not be possible for me to act upon a solicitation made by Mr. Gurney, in his capacity as President of the Committee of Control, a Body whose existence I could not officially recognize. I explained that any such request must be made to the American Government through the regular Diplomatic channels, which in the circumstances, appeared to be the Resident-General of France at Rabat, as Minister for Foreign Affairs of His Shereefian Majesty, and this Diplomatic Agency.

The French Resident-General at Rabat has consequently just addressed to me a communication,^42a enclosing a copy of the draft law above referred to, and requesting that these measures be rendered applicable by the United States Government, to American ressortissants in the International Zone of Tangier. This draft law, in the French text and in English translation, is annexed hereto.⁴³ It is known as a “Loi de Cadenas,” i. e. a “Padlock Law.”

By this legislation, the Tangier Administration will be enabled at any moment, after the mere formality of notification to the Legislative Assembly, and the posting up of new schedules in the Customs House, to impose forthwith the levy of increased consumption taxes upon imported merchandise. The increments would subsequently be the subject of debate in the International Legislative Assembly and would remain definitely acquired to the Treasury, wholly or partially, in the proportion in which they were eventually voted by the local parliament, or they would be refunded to the parties concerned if the Administration’s projected law were to be withdrawn, or if it were to be thrown out. The Administration proposes that the final disposition of the increments to be provisionally levied on goods imported by American ressortissants, would depend upon the measure in which the sanction of the American Government might eventually be given to the supplementary taxation in each instance.

It would appear that the proposed legislative action of the Tangier Administration is undoubtedly incompatible with a proper observance of existing treaty provisions, for the following reasons:—

The treaties with Morocco inhibit the Sultan (or His Delegated Administrations) from imposing, under any pretext whatsoever, upon the ressortissants of the treaty powers, any taxation of whatever kind, except the Customs duties and other dues clearly specified in the said treaties. Consequently no new fiscal charges which the Maghzen may desire to introduce, can become applicable to the citizens and protégés of the United States, unless and until the assent of the American Government thereto shall previously have been requested and obtained. Now the effect of the “Padlock Law” above referred to would be to give a retroactive effect to the Department’s sanction of the legislation; in other terms, new fiscal charges extraneous to the treaties, would, as a result of the “Padlock Law” be effectively imposed by the Maghzen’s agents upon American citizens and protégés, prior to the notification of the Department’s assent thereto. This would be contrary to the intention and to the long accepted operation of the treaties, and finally at variance with the practice consequently adopted by the United States Government vis-à-vis the Administrations of the French and Spanish Zones of Morocco.

In the French Zone, the Department has recently had occasion (see Instruction No. 461 of February 20th, 1928, (File No. 881.512/55),⁴⁴ relative to a sudden increase in sugar taxes for the relief of flood victims) to insist with the Residency-General at Rabat upon the condition that notification of the American Government’s consent must precede the enforcement upon American ressortissants, of each and every legislative measure introduced by the Franco-Shereefian Government.

The Authorities of the Spanish Zone are inveterate offenders in ignoring treaty requirements when promulgating new fiscal measures, but they have been constrained in all cases, both by the British and Dutch Governments to refund all dues levied on their subjects prior to the approval by these governments of the laws concerned. Furthermore, the Department will recall that similar refunds figure among the items of the Statement of American Claims against the Government of the Spanish Zone of Morocco, approved in a joint report recently drawn up by the Representatives of the United States and of Spain in Tangier,⁴⁵ and which claims are now before the Spanish Government, awaiting settlement prior to American recognition of the Spanish Zone of Influence.

It is obvious therefore—even if it were not impossible to consider the technical feasibility of acquiescence in the request of the Tangier Administration—that an acceptance of the “Padlock Law” in Tangier would be peremptorily debarred by the jeopardy, which would arise therefrom, to the respect due to our treaty rights in the other Zones of Morocco.

In informal private conversations with my British Colleague and also with the British Administrator of Finances in Tangier Zone, I have explained the treaty difficulties which I foresaw might block the way to an anticipatory blanket assent such as the legislation in question expected from the Department, to all future Tangier fiscal legislation, and I pointed out that whatever action the Department might deem it proper to take in the circumstances, it would be in the highest degree improbable that it could consent to make, in favor of the Tangier Zone, any departure from the only procedure, which, as being compatible with treaties, it was disposed to follow in the other Zones of Morocco.

The Financial Administrator of the Tangier Zone has subsequently informed me that he fully appreciates the reasons for resistance on the part of the American Government to any acquiescence in the “Padlock Law” and he made a confidential communication to me of the several fiscal measures, which it is proposed to introduce in the near future, under the preliminary application of that law. These measures have also been submitted to me by the Resident-General of France at Rabat, and as Minister for Foreign Affairs of His Shereefian Majesty his request has been made that the taxation in question be rendered applicable to American citizens and protégés in the Tangier Zone, as soon as the corresponding legislation shall have been adopted by the Tangier Legislative Assembly.

The following are the measures which the United States is requested to sanction:—

1. Enforcement of the Revised and Extended Gate Taxes, referred to in my No. 254 of January 12th, 1928, and the subject of the Department’s Telegram No. 1 of February 6th, 1928, 6 p.m.⁴⁶

2. Increase of the Consumption Tax on Sugar and sugar products from 50 to 75 Francs per 100 Kilos.

3. Increase of Consumption Tax on Alcohol and Alcoholic products from 500 to 750 Francs per Hectoliter of pure alcohol.

4. Increase of Consumption Taxes on the undermentioned produce:—

• On Tea from 150 Francs to 175 Francs per 100 Kilos.
• On Raw Coffee from 50 Francs to 75 Francs per 100 Kilos.
• On Toasted or Ground Coffee and Coffee substitutes, from 75 Francs to 100 Francs per 100 Kilos.

In its Instruction No. 461 above referred to, the Department suggests that it would not be indisposed to consider giving its assent in advance to proposed legislation submitted to it in good time prior to the promulgation thereof, and it would appear that this procedure would be appropriate in connection with the above proposed dispositions.

The latter represent, in my opinion, an excessive fiscal burden upon the Tangier Community; the consumption taxes moreover will thereby become higher than in the other two Zones of Morocco and will consequently tend to restrict the operations of Tangier merchants within the narrow limits of the Tangier Zone. The taxes are therefore, in my view, inherently uneconomical and prejudicial to the normal development of trade and economic activities of the Zone, and cannot but react adversely upon the general prosperity of the community and eventually upon the financial stability of the “International” Administration. However, we would perhaps be transgressing the scope of our proper functions, if we were to be guided solely by such considerations as these to maintain the immunity of the American residents from fiscal charges applied to the community in general, by the nominally representative body which presides over the safeguard of public interests. Amid the experimental and fluctuating conditions of government in the Tangier Zone, the utmost vigilance will be required to maintain the proper respect for our treaty rights. But, providing proposed legislation involves no direct or implied discrimination against American interests, that it is equally and universally applied to the nationals of all Powers, and that the Maghzen is prepared to solicit and obtain the Department’s consent before any attempt is made to enforce the law upon American ressortissants, I believe that the Department would not desire, by withholding its assent in such conditions, to occasion embarrassment or obstruction to the efforts, however imperfect or inadequate they might appear to be, of the local government.

In accordance with all the foregoing considerations, I venture to suggest that the Department instruct me to advise the Resident-General of France at Rabat, that the American Government categorically rejects the “Padlock Law” for the reasons exposed in the earlier paragraphs of this Despatch, but that it is disposed to acquiesce in the application to the ressortissants of the United States in Tangier of the four particular measures above enumerated, under the following conditions:—

Subsequently to the formal notification to the Shereefian Government of the American Government’s assent thereto, American citizens and protégés shall become [liable?], within the limits of the proposals as approved by the Department of State, and also in the measure in which, and as from the date upon which, the laws shall have been definitely adopted by the Legislative Assembly, insofar as concerns the remainder of the community.

If the Department should concur in the above suggestion, I shall be grateful for its instructions to act in the sense indicated, and as in deference to our position the Tangier Administration is disinclined to move in the matter until our attitude is definitely revealed, I venture to hope that the Department’s telegraphic instructions will be received by me before the commencement of the Christmas holidays, since it is desired to apply the above taxes as from January 1st, 1929.

I have [etc.]

Maxwell Blake

42. Signed at Paris by Spain, France, and Great Britain, December 18, 1923; League of Nations Treaty Series, vol. xxviii, p. 541.
43. Post, p. 515.
43. Not printed.
44. Foreign Relations, 1928, vol. iii, p. 343.
45. Ibid., p. 353.
46. Neither printed.