The Ambassador in Spain ( Laughlin ) to the Secretary of State
[Received 8:50 p.m.]
92. Reference my No. 89, October 24, 2 p.m.,9 Franco-Spanish commercial agreement10 went into effect today. Article 5 declares a reduction in the tariff rates established last July with regard to certain articles. Government decided at noon today that reduction in rates accorded France by the agreement in respect of automobiles, tires, and tubes, films, motorcycles and artificial silk, et cetera, are not to be applied to the United States basing this stand on the provisions of the Royal Order of May 25, 1927,11 which, while continuing in force, they contend does not give these privileges to us because of the subsequent abolition of the consolidated rates then existing. Calderon, chief of the Commercial Bureau of the Foreign Office in charge of this matter, states quite frankly that his Government is willing to reconsider placing [Page 996] us in most-favored-nation position if we give them something in return. He said that they did not expect tariff reductions from us but a simplification of the administrative regulations affecting entrance of the preserves, grapes and oranges, short firearms and garlic. He also mentioned in strict confidence that not all countries would benefit by the tariff reductions accorded France and that a bargaining proposition had been offered Italy which she must accept tonight in order to enjoy them.
Pending your considered instructions I intend to see Lerroux himself tomorrow in an attempt to modify the Spanish stand.