811.512351Double/92

The Ambassador in France ( Edge ) to the Secretary of State

No. 934

Sir: I have the honor to refer to my telegram No. 306 of September 30, 1930, 8 p.m., and to my despatch No. 913 of October 7, 1930,28 both on the subject of the proposed double taxation treaty.

In the aforementioned telegram I intimated that it was my purpose to seek a conference with M. Flandin, the Minister of Commerce, in relation to his intervention in the double taxation deliberations and, if deemed necessary, with M. Tardieu, the French Premier. In order that the Department may have complete information of all that has happened up to the eve of my departure for the United States tomorrow, Thursday, October 16th, I am briefly recapitulating the result of these further conferences.

On Friday, October 3rd, at 5:30 p.m., I called on M. Flandin by appointment. I was accompanied by Mr. Williamson S. Howell, Jr., First Secretary of the Embassy. I briefly outlined to M. Flandin the result of the official conferences with M. Germain-Martin, M. Borduge and others as related in my despatch under reference, emphasizing particularly my surprise as well as disappointment upon being informed that he, as Minister of Commerce, had requested that no final adjustment of the double taxation problem be entered into until various questions connected with the American tariff as they related [Page 42] to France be reviewed or disposed of. M. Flandin very frankly admitted that he had made this request and submitted as his reasons the insistence of influential members of the tariff commissions of the French Chamber of Deputies and the French Senate familiar with the negotiations for the settlement of double taxation, that no treaty be signed until some tariff matters could be adjusted in the interest of French producers. M. Flandin endeavored to impress me with the great difficulty he had had immediately before and after the passage of the new American tariff to persuade the committees of the two Houses from taking drastic action by way of reprisals in exchange for the raised American tariff applying to French exports. He unqualifiedly stated that he had been compelled to promise to use his influence against a settlement of double taxation for the time being at least. He assumed much credit for having dissuaded Parliament from taking any unfavorable action and said that he had been severely criticized in many French commercial circles because of that fact which was well known; that various French newspapers had called him a “weak Minister” because he recommended patience. (It is true that M. Flandin did take this position and that considerable criticism to that policy appeared in the French press for some little time after the passage of the tariff bill). M. Flandin reiterated his desire to maintain the most friendly attitude but said he was helpless under the circumstances. (See memorandum attached for further details.)29

I took the position that each problem should stand on its own merits and that we would never be able to adjust any problem if differences in tariff were always introduced as a reason for delay. I outlined to him various complaints made by American producers because of the recent raise in the automobile tariff and in the tariff on lard and other details with which we were both familiar, but he plainly indicated that the members of Parliament were so powerful that no matter what he personally thought, he was directed to take the action he had taken.

While I clearly indicated to M. Flandin that tariff had nothing whatever to do with double taxation, that it was purely a domestic question, that we never officially complained of the French tariff if it was non-discriminatory, and further emphasized the impossibility of adjusting problems when extraneous matters were constantly introduced, he frequently referred to the hope that the United States Tariff Commission would accord relief, and said that various requests for review or reexamination had been made through the French Embassy in Washington and the French Commercial Attaché, and that some indication had been given that relief would be afforded. I told him very frankly that all these investigations must be considered entirely [Page 43] on their individual merits as to the cost of production in the United States and competing countries, and that many times it was not France as much as France’s successful competitors at which a raised tariff was naturally aimed, but that under the United States policy all nations were treated absolutely alike and that even the Tariff Commission would be helpless to make changes unless, as I had indicated, the facts of the cost of production would warrant such changes. He outlined several commodities: walnuts, Roquefort cheese, canned mushrooms, clover seed, but, rather to my surprise, did not emphasize the more important schedules of silk, gloves, textiles, etc. In fact, he stated he would not complain about articles of which other countries furnished large amounts to the United States. The conference closed most pleasantly but the position of the Minister was clearly outlined as above.

On my return to the Chancery, I dictated a letter addressed to M. Flandin, reviewing the impossibility of the position as I viewed it, which I afterwards filed with M. Tardieu upon the latter’s request. A copy of this letter is enclosed.30

On October 7, 1930, at 6 p.m., I called upon M. Tardieu at the Ministry of the Interior by engagement. Mr. Armour, Counselor of the Embassy, accompanied me. I told M. Tardieu that I desired to discuss with him the present status of the proposed double taxation treaty. I indicated to him that we had apparently reached a position of status quo; that I had exhausted the various channels under him and that in view of my early departure for the United States, I felt that the entire subject should be discussed by us. He evinced much interest and indicated that he was generally familiar with the situation and seemed very glad to embrace the opportunity to talk it over. I summarized what had happened, which is outlined in full in previous despatches to the Department.

M. Tardieu admitted that the matter had been brought to the attention of the Council of Ministers by M. Flandin sometime back, in fact, four or five months ago, immediately following the passage of the American tariff and at the time when the feeling as to the tariff was quite acute in French political circles. He said that at the time the Council of Ministers had determined that while every effort should be made to reach an agreement on the taxation treaty, still it should not be finally signed until some indication on the part of the United States Tariff Commission was given that France’s many protests would have friendly consideration. I asked him why we had been permitted to go on with the taxation treaty even to the extent of being questioned as to power to sign a treaty when in any event no treaty could be executed. M. Tardieu plainly admitted [Page 44] that this seemed unfortunate and expressed his desire to try to remedy the situation in any possible manner. He, however, on two occasions during the conversation said that if the taxation treaty were signed at this time without some assurances regarding tariff, his “government would fall in three weeks.” He plainly exhibited his recognition that the various Ministers who have participated in these negotiations were in an embarrassing position as well as himself. He then asked if it were not possible for the representatives of the two Governments to get together on all problems between the two Governments that could be embodied in one commercial treaty just as they had concluded a treaty with Great Britain a few years ago. I told him that I was just as anxious as he was to endeavor to adjust all problems but that I recognized that this was a Herculean task and had proceeded with the taxation treaty independently because it seemed possible to effect a solution.

Our conversation lasted for an hour and half and ended with a suggestion made by M. Tardieu without any intimation from me that he would like to get together all the records in the matter, take them out to the country for two or three days and give me his best thought as to a method to relieve the situation. I expressed my appreciation of his interest and earnestness and, upon his assurance that such a memorandum would reach me before I sailed for the United States, I dropped that subject and opened the subject of naval disarmament, a report upon which has been made to the Department in another despatch.31 I am attaching a memorandum prepared by Mr. Armour giving more details of this interview.32

On October 9th, two nights after the conference above referred to, I again met M. Tardieu at a banquet, sitting next to him. After the exchange of the usual pleasantries, M. Tardieu, without intimation from me, again opened the subject of our conference two days before as it related to double taxation and a commercial treaty. He said that after our conference he had had ten representatives of the government in his office discussing the situation from every viewpoint and was leaving the next morning, Friday, October 10th, for the country at which time he would prepare the memorandum he had promised during the previous interview. In view of the fact that he had been collecting various material from the representatives of his government, I asked him if he would like to have some of the memorandums that we had prepared. He responded in the affirmative and later that night I despatched to his private address the letter I had prepared for M. Flandin, which I had not mailed, together with other memorandums dealing with the matter.

[Page 45]

On the evening of October 14th, I received at the Embassy the promised memorandum, a copy of which is enclosed, together with copies of my two replies. Thus the matter stands.

Respectfully yours,

Walter E. Edge
[Enclosure 1—Translation]

The President of the French Council of Ministers ( Tardieu ) to the American Ambassador ( Edge )

My Dear Ambassador and Friend: I have personally studied the two files from the Ministries of Finance and Commerce as well as your memorandum and I wish first of all to thank you for the important part which you have taken in those two negotiations.

I am, just as you are, anxious to reach a solution as soon as possible. But it does not seem to me that in either case one has reached an agreement.

If you wish, I will examine:

1)
double taxation
2)
tariff.

I. Double Taxation

I know that, since your arrival in France, you have offered to the French Government to open negotiations in order to give the benefit of Article 27 of the law of July 31, 1920, to American firms carrying on industrial or commercial undertakings in France in the shape of branches organized as French joint stock companies.

You remarked that this Article allows, under certain conditions, the French firms having branches to deduct from the profits which they distribute to their stockholders, in the payment of the income tax, those dividends which they have received from their branches and which have already been subjected to that tax.

Now, the French law does not allow the application of Article 27 to foreign parent firms, therefore the income from the latter is subjected to double taxation.

You expressed the wish that the American firms be placed on the same basis as the French firms. It was under these conditions that, at your request, unofficial negotiations were opened at the beginning of last May by representatives of the American Treasury Department sent purposely from Washington.

From the start of the negotiations your representatives broadened their demands. They did not content themselves with requesting an extension to American firms having branches in France of the provisions of Article 27 of the Law of July 31, 1920. They requested in addition a modification of the system known as the “quotité imposable”, [Page 46] applicable to American firms carrying on industrial and commercial undertakings in France, either directly or through the assistance of French branches.

With the spirit of conciliation which always animates us in carrying on negotiations with your country and in order to give to the American Government every evidence of their good will, the French unofficial negotiators agreed to discuss the system known as the “quotité imposable” and to try and find, if possible, as a substitute, another system presenting less disadvantages from the American viewpoint. This result has been obtained (Articles 1 to 9 of the unofficial draft).

But in exchange for the satisfaction thus granted to American interests, the French negotiators requested that, on its part, the Government of the United States accept to modify certain provisions of the legislation which are detrimental to French interests and violate the rules adopted by most nations in fiscal matters.

On certain secondary points the French requests have been satisfied; but covering the essential claim, the American delegates, without putting up any technical arguments, but merely alleging the impossibility of obtaining the Senate’s agreement, have rejected the French request. I refer to the super tax which is identical with the French general income tax. Now Americans are never subjected to that tax in France when they have no residence here; on the other hand the French are taxed in the United States, even when they have no domicile there, on all sources of income which they derive from America.

The American negotiators have granted the supertax exemption for dividends and interest, but they have not renounced its collection on the income from all other categories (income from labor, from commercial undertakings, from real estate, etc.)

During the session of September 29 and after the incident concerning non-fiscal questions had been settled, you declared yourself, my dear Ambassador, in your capacity this time as official negotiator, that it was impossible for you to grant the French request. In vain, M. Borduge, the French negotiator proposed, should you stand by your refusal, to solve the difficulty by reducing the American request and limiting it to the introduction of Article 27. Here again, you interposed such a refusal that our negotiators were placed in a difficult situation; for your Government requested a radical modification of the French laws in favor of American interests without accepting the counterpart which the French Government considers as legitimate.

I cannot conceal from you the fact that, under these conditions, the negotiation comes to a deadlock—and this without taking into account all the non-fiscal consideration.

I do not think that the responsibility for this situation can be blamed on the French delegates.

[Page 47]

In other words, the agreement on double taxation has not yet been reached.

II. Tariff Questions

I will only mention here with some details the products especially affected by your new tariff and of which we are the principal exporters to the United States—those consequently for which we find ourselves under the conditions provided by the law of June 13, 1930,33 to have our requests for a tariff reduction taken into consideration.

These products are:—

  • Mushrooms
  • red and crimson clover seed
  • nuts and green walnuts
  • Roquefort cheese
  • briar pipes finished and in the rough
  • cotton tissues
  • silk yarn
  • silk velvet
  • fine metal mesh for the paper industry
  • leather gloves

1) Mushrooms. The duty on mushrooms of hotel quality has been raised successively from $12.50 (1912) to $25 (1922) and to $30. (1928); the duty on first choice quality, from $18. to $30 and now to $35 per case of 100 half-cans of 8 ounces.

Now, according to official American statistics, the imported mushrooms cost in the United States in 1929 61 cents a pound whereas the average selling price of American-grown mushrooms were 60 cents.

Besides, the number of persons employed in the United States in the canned mushrooms industry—the only one being considered—is, as brought out during the Senate investigation, absolutely insignificant: 320 persons only. Moreover, it has only been in the last few years that the four firms now engaged in this line of business began to work.

2) Red and crimson clover seed.

a)
The American production of crimson clover is unimportant—300,000 lbs. only, whereas the imports vary from 2 to 6 million lbs. per year. There can therefore be no question of foreign competition.
b)
the proportion for red clover is reversed: the United States produce from 40 to 75 million pounds and must, nevertheless, import another 20 million pounds of foreign clover.

There again no prejudice can accrue to the domestic production through French imports of this quality.

Furthermore, no argument of an economic nature has been presented to Congress to justify these increases of duty.

[Page 48]

3) Nuts and Green Walnuts. The American production is far from adequate for the needs of the country. The Association of Nut Producers of California, the aims of which are not to make profits, cleared last year from 10 to 12 million francs.

Finally, American nuts, inferior in taste, are more expensive than ours. There again it is impossible to notice that French competition bears a prejudice to American production.

As for green walnuts they do not compete either in any way with California fruits which are not of the same variety. The American production keeps on increasing but the argument of the National Grange based on the possibility of growing walnuts on 150,000 acres of presently unproductive land in California cannot be considered as convincing since it takes about ten years for walnuts to bear fruit. Besides the development of this culture before the establishment of the new duty indicates that the tariff protection was already greatly sufficient.

To support these facts, the University of California as well as the National Association of American Candy Makers have already raised strong protests.

4) Roquefort cheeses. The former duty of 25% already exceedingly high since it affected an exclusively French speciality, manufactured in France for over a thousand years, fixed by a French law and which cannot be produced in the United States, has been raised to 35%.

It would be fair to go back, insofar as possible, to the former figure, and if, eventually, a discrimination was made in favor of certain foreign cheeses made of ewes milk, Roquefort should not be excepted from the benefit of the reduction.

5) Briar Pipes. Under the old tariff the duty charged on this article was 60% ad valorem to which the new tariff has just added a specific duty of 25% per pipe.

As a result, a gross of pipes sold for 216 francs will hereafter pay a duty of 309.60 francs, a really exorbitant protection (143% on an article the raw material of which can scarcely be purchased outside France).

6) Cotton Tissues. The documents showing the logic of our request for a reduction under paragraph 908 of the American tariff will be furnished ultimately as soon as they have been put in shape by the interested manufacturers.

7) Silk Yarn. Jacquard Silk Goods. Silk Velvet. Duty on silk yarns of several staples has been carried from 45 to 50% in spite of the protests of the American velvet manufacturers, as shown by the various reports presented to Congress.

The old protective tariff was quite sufficient inasmuch as the American production rose from 777,000 pounds in 1909 to 4,456,000 [Page 49] pounds in 1928 while during the same period imports dropped from 3,160,000 to 574,000 pounds.

As for Jacquard silk goods carried from 55 to 65% and plush velvets from 60 to 65%, it seems as though this increase was not prompted by any imperative motive.

8) Metal mesh for the paper industry. The mesh in question (Fourdrinier wire) was subject, under the 1922 tariff, to an average duty of 30% (according to the number of wires, 25 to 45%).

The new 50% duties, ad valorem, are considered prohibitive and the investigation pending before the Tariff Commission can only justify the justice of our claims, which, however, are supported by the paper manufacturers, the importers and the American press.

9) Leather Gloves. The French glove manufacturers who exported in 1929, 465,000 dozens of gloves worth 150 million francs (American statistics) are very badly affected, especially as far as hand-sewed gloves are concerned. This product, for which America has no manual labor, now pays a duty of $10.50 or $5.50 higher than the old tariff rate and affecting hand manufacturing which does not exist in America.

I could also mention various categories of products which are of serious interest to French production if they do not represent a large volume of American imports. They are: red-and-white-heart cherries, whiting, crenellated irons, olive oil and violins.

I must add that there are a considerable number of articles for which the French Government’s investigations have not yet brought forth the data which we consider necessary. They are: almonds and hazel nuts, silk hats, leather for transmission belts, crystal ware, raw leather and hides, gelatin, bone glue and prismatic opera glasses.

There are also agate buttons concerning which an enquiry is under way in the United States. The question involves a 4 dollar duty on a product the sales value of which is 80 cents. The reduction of 50% itself seems to be absolutely insufficient to enable the French exporters to keep up their business with the United States.

You see the importance to us of the tariff problem and the interest we have in reaching an early solution.

I know that this tariff, resulting from a congressional vote, can be amended on certain points only if the investigation shows that the protection granted to certain products is excessive or unjustified. I know also that this investigation must be carried on independently and in all objectivity by the committee appointed to that effect.

I believe, in any case, that I have made evident to you in a few concrete examples that the claims of our exporters are strongly justified; that they prove that a considerable prejudice has been caused to French trade without any appreciable benefit to American [Page 50] business; and that under these circumstances, neither the French public opinion nor Parliament would understand why we have settled, at the request of the American Government, certain questions long in suspense between the two countries, without having attempted, at the same time, to remedy a situation so evidently detrimental to our interests. That is an actual necessity.

You indicated in your letter of October 6th to the Minister of Commerce, which I thank you for having referred to me, that the two questions are distinct and you insisted upon signing the fiscal agreement at an early date.

But I do not perceive how, at the present moment, we could sign anything at all since we do not really agree on the fiscal question.

If it was merely a question of smoothing out details, perhaps we might, in spite of the short time between now and October 16th, hope to succeed before your departure; but, as I have called to your attention, the views are widely divergent.

If, as early as September 29th, as the French delegates had firmly hoped, it had been possible to continue the discussion further, perhaps it would have been possible to succeed in the given delay. But then you requested that the negotiations be interrupted, the irreductibleness of the two viewpoints seeming to you to leave room for no agreement.

As soon as your decision became known to him, M. Germain-Martin, Minister of the Budget, who had agreed to postpone his departure till then, left Paris for a few days rest, and the discussion could not be resumed usefully in the absence of the responsible Minister.

Such is, my dear Ambassador, the situation. I apologize for writing you at such length, but I wish to group all the elements together.

Please accept [etc.]

André Tardieu
[Enclosure 2]

The American Ambassador ( Edge ) to the President of the French Council of Ministers ( Tardieu )

My Dear Mr. President: Last night I received your letter dated October 14th, recapitulating the French viewpoint of the proposed double taxation treaty as well as reviewing other economic problems. I thank you most sincerely for the great trouble you have taken to have this memorandum in my hands before sailing tomorrow. In another letter which I am hoping to be able to prepare before I leave, I shall review more in detail these mutual problems with every hope they can be finally adjusted.

However, in view of the fact that a settlement of the double taxation problem must at least await my return from the United States [Page 51] early in January, it would seem, in all fairness to all parties concerned, that in the meantime there should be a postponement of the levying and collection of taxes under the quotité imposable against American concerns. This is especially true in view of your recent frank statement to me that no final treaty, whatever its terms, could anyhow have been signed at this time. Of this, of course, I was unaware until September 29th last, although the negotiations had been going on for several months. This armistice, as it were, should at least continue until a reasonable time has elapsed to give further opportunity for France and the United States to reach a general agreement. I am quite sure you will acquiesce in this suggestion as you will readily realize that any activities on the part of French taxing authorities to bring American branches or subsidiaries under the purview of the quotité imposable while these negotiations were in progress would naturally result in much confusion, if not resentment.

It would be my view that the suggested armistice should include all American concerns regardless of whether their cases were under consideration before May 1, 1930, the date mentioned in the draft agreement, or otherwise.

In order that the entire subject be held in complete abeyance, it would likewise be desirable to further postpone the decision by the Cour de Cassation in the Boston Blacking Company case. It is my formal understanding that this decision has been permitted to lie dormant during the progress of the negotiations in the past and any sudden decision in the next few months might very easily cause much alarm to American interests and make much more difficult the adjustment of the complete problem.

With assurances [etc.]

Walter E. Edge
[Enclosure 3]

The American Ambassador ( Edge ) to the President of the French Council of Ministers ( Tardieu )

My Dear Mr. President: In a previous note written this morning, I acknowledged your comprehensive letter of the 14th instant. However, there are some references in your communication that would indicate a possible misunderstanding on your part as to some features of the double taxation negotiations which I feel I should endeavor to clear up before sailing for the United States.

It is my earnest hope upon my return that the situation will be sufficiently clarified so that these negotiations may be resumed and concluded, and may I express the sincere desire that your associates in public responsibility will realize that in all other mutual responsibilities, [Page 52] such as tariff reviews, I am earnestly desirous of being of any consistent service?

In your communication, you point out the obvious fact that there is no double taxation agreement at the moment to be signed, and further suggest that my disinclination to continue the negotiations at the official meeting on September 29th made any agreement impossible. I have endeavored in previous statements and communications to make it clear that, in my judgment, both France and the United States will be better served through reviewing and endeavoring to settle each problem, as it occurs, upon its own merits. Therefore, when M. Germain-Martin at the opening of the Conference on September 29th frankly stated that no treaty, whatever its terms, could be signed until certain tariff revisions had been secured, which latter assurance I was, of course, unable to promise, there appeared no possible advantage to either side to continue considering technical details of the proposed taxation treaty. Nevertheless, although following this declaration M. Germain-Martin retired, I remained in conference with M. Borduge and the others for two or three hours, hoping that M. Borduge would indicate a willingness to waive the negligible benefit from a practical standpoint presented in the terms of Article 10 as proposed by the French draft.

The only alternative suggested by M. Borduge during that time was the application of Article 27 of the law of 1920 to American parent corporations in such a way that they would remain subject to the quotité imposable. My Government considers that such application constitutes an invasion of its own tax jurisdiction because of subjecting an American corporation to a French tax on dividends distributed in the United States to American taxpayers. The negotiations had been entered into for the express purpose of securing the abolition of that practice which is obviously contrary to fundamental principles of fiscal sovereignty. How then could I accept the application of Article 27 as proposed by M. Borduge?

Furthermore, I fear it must be a misunderstanding that I ever suggested that American corporations be given the benefit of Article 27 of the law of July 31, 1920, unless it was incidental to my request that, regardless of the question of jurisdiction, American corporations with French subsidiaries be freed from the application of the tax on the dividends which they distribute, inasmuch as French companies with subsidiaries at home or abroad are freed from the double imposition. The subjection of American corporations twice to the same tax whereas French parent companies are liable only once obviously constitutes a discrimination which is contrary not only to the principle of equivalent treatment prescribed in the law of 1872 itself but also to the very spirit of our treaty relations.

[Page 53]

Moreover, returning to the question of fiscal sovereignty, if American corporations only owning stock in French companies are themselves without the fiscal jurisdiction of France, how could France grant them an exemption from a tax to which they are not subject?

Please let me therefore insist that neither I nor our experts ever in any way suggested that the application of Article 27 of the law of 1920, as interpreted by M. Borduge, would be acceptable, and that the unofficial conversations were begun by our representatives for the primary purpose of abolishing the application of the quotité imposable in the case of American parent corporations. This fact should never be confused.

In your communication you further state that “the American delegates, without putting up any technical arguments, but merely alleging the impossibility of the Senate’s agreement, have rejected the French request.” (This refers to the French terms of Article 10). This statement leads me to the impression that your personal attention had not been directed to a very comprehensive memorandum prepared by our experts endeavoring to set forth in complete detail the views of my Government in respect of that article and showing the slight advantage accruing to French nationals through accepting the French version of the article in question. I am taking the liberty of enclosing a copy of this memorandum.34

I have never been able personally to understand the French experts’ insistence in this connection, unless it was with the idea that a complete agreement upon a taxation treaty should, for reasons since admitted, not be effected at this particular time. An actual investigation of the material benefits to French nationals under the French version of Article 10, as indicated by past tax returns, would reveal them to be so little that it seems to me inconceivable that this difference could possibly prevent complete acquiescence on your part.

After all, as I have endeavored to make clear, it would be an idle gesture for me to sign any treaty the provisions of which, on their own merits, would not secure approval of the United States Senate. Incidentally, the asseveration that the United States surtax is identical with the French general income tax is absolutely unfounded as even a casual examination of our law will clearly manifest. Moreover, an examination of the tax systems of a number of leading countries will show that the provisions in American tax law which your representatives would have us renounce are quite normal and fair and do not “disregard the rules adopted by most nations in fiscal matters.” The provisions in question merely provide for taxing in the United States income flowing to non-resident foreigners. They do not envisage the taxation of income from a source in a foreign country as is [Page 54] done in the case of the French tax on dividends paid by American corporations.

Another feature of the negotiations that is difficult for me to reconcile with later happenings was the criticism made several times that neither our experts nor the Ambassador had power to close or sign a treaty. This was apparently advanced as a reason for delay. When this was brought to my attention I immediately sought and received full power from my Government, although in the light of the decision of the Council of Ministers months before that no tax treaty would be closed, as you recently advised me, there seemed no reason for this suggestion.

Your communication reiterates and emphasizes the point you brought up at the time of our personal conference that there was a practical political situation in France which, in your judgment, prevented the culmination of any agreement at this time which would relieve American businessmen, unless there was some relief to French business through reductions or revisions of the American tariff. I want you to feel that I understand personally this situation and that I am entirely sympathetic in the desire to afford any possible relief in this connection that the facts will warrant, but entirely apart from consideration of the tax treaty. I reiterate that I feel very strongly that in the final analysis the settlement of any problem should not be contingent upon the settlement of an entirely extraneous one.

I have read with much interest the details you have presented in connection with the cost of production, etc. of various French products in their relation to the duty imposed. Your list is very much more extensive than that suggested by M. Flandin and such a wholesale adjustment of tariff, of course, presents many difficulties and may be quite impossible. Many of the rates apply to other countries which undersell France. However, you can be assured that I shall personally see that these facts are brought to the attention of the Tariff Commission and feel confident that any revisions, justified by the full facts, will in due time be enacted. As I have endeavored to indicate, both to M. Flandin and to yourself, the Tariff Commission, under the law, must necessarily make its own investigations. I am confident that no unnecessary delay will occur in carrying out these provisions but, of course, it all requires time. I am informed that the French Embassy at Washington together with the French Commercial Attaché have all this information and no doubt have already presented it to the commission. I repeat that I will gladly follow this with personal inquiries in the hope of expediting action.

May I express the sincere hope that when I return from the United States early in January we may have a further conference on all these subjects and that the activities of the past few months will at least [Page 55] have brought us nearer to a solution, notwithstanding temporary disappointments?

With assurances of my warm personal regards and friendship and with much appreciation of the care and attention you have given to our mutual problems, I am [etc.]

Walter E. Edge

P. S.—I should like to repeat the request made in my first letter this morning that the levying of the quotité imposable upon any American parent companies be postponed until the negotiations between the two countries have proceeded further. I should appreciate your sending some word to me to this effect through Mr. Armour, the Chargé d’Affaires.

W. E. E.
  1. Latter not printed.
  2. Not printed.
  3. Not printed.
  4. No. 927, October 8, 1930, vol. i, p. 135.
  5. Not printed.
  6. Approved June 17, 1930; 46 Stat. 590.
  7. Not printed.