The Minister in Portugal (Dearing) to the Acting Secretary of State

No. 2962

Sir: I have the honor to refer to my despatch No. 2951 of January 14,13 regarding flag discrimination and national treatment for foreign vessels in Portuguese ports, and to inform the Department that the vigorous protests that have been made by the various maritime interests here—shippers, naval officers, seamen, etc.—have caused a sudden change of atmosphere in the situation and that I find my colleagues less optimistic as to their ability to secure concessions from the Portuguese Government.

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I inquired of my German colleague, since certain German vessels going directly from Germany to Loanda were formerly in the same position as our own, what the situation now is regarding those vessels, and learned from him that the German lines have ceased sailings to Angola for over a year past. This would seem to indicate that they found it unprofitable to do business under the present discrimination.

Since then I have received the Department’s instruction No. 1085 of January 8, 1930,13 and as it is apparent that the American West African Line does not clearly understand the situation and it is not certain whether they are suffering from the actual situation which has already driven out the Germans or fear newer and greater discriminations, the Legation is endeavoring through the Ministry of the Colonies and the General Agency of the Colonies to get a precise and accurate statement of the situation in Angola upon which it can base comment and advice. There seems to be considerable confusion and it is probable that the factors hurting the business of the American West African Line are due to the action of the Lisbon Government rather than to the Colonial Administration in Angola. While the Colonies have a certain autonomy, they are held fairly closely to the home Government and the Cabinet just constituted places the Ministry of the Colonies under the control of the powerful Minister of Finance, Salazar, who asked for it so he could clean up colonial finances and administration. He has stated the work may take three or four years or more, so it would not be surprising to find that the real control of Angolan tariffs and shipping practices is right here in Lisbon.

On January 27 I called with Mr. Magruder, upon the new Foreign Minister, Captain Branco, whom I know quite well. I took advantage [Page 781] of the call to bring up the question of flag discrimination, to express our great interest in securing better treatment for American vessels, and to point out that Portuguese vessels were receiving national treatment in American ports and that the situation was one sided. I especially mentioned the case of the American West African Line. I inquired about the advisory committees and learned that in addition to the one for the Ministry of Marine mentioned above, there is another representing the Ministry of Commerce and a special one for the Foreign Office itself. The Minister received what I had to say very cordially, but I again got the impression that with all this machinery and new men in office, and all the opportunities for delay, early favorable results are not to be expected and that the Portuguese will again play for time. I pointed out to the Minister the bearing the situation had upon the commercial treaty it would be desirable to negotiate saying it could not be taken up while so uneven a situation existed.

In spite of the foregoing, I continue to feel that we should not now or unless presented with a new situation by the developments of the near future, consider reprisals and the withdrawing of national treatment from Portuguese vessels in our ports. Until we can negotiate a commercial treaty the disadvantages of the discontinuation of the 1910 arrangements and the loss of the most favored nation privilege would outweigh I think any advantage that would be gained. I expect to report further to the Department from time to time.

I have [etc.]

Fred Morris Dearing
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