683.003/37: Telegram

The Minister in Egypt (Jardine) to the Secretary of State

24. Your 73, December 22, 4 p.m.

Decree promulgated February 9 increasing duties on wheat and flour; February 11 increases introduced on matches. Rates on foregoing cabled by Commercial Attaché February 17. Changes in some 200 articles tariff chiefly from ad valorem to specific basis introduced in the light of experience past 12 months and to protect growing home industries and provide additional revenue sorely needed.
Principal American commodities affected by increases include dried and canned milk, packaged cereals, canned and preserved fruit, paint and varnishes, cotton piece goods, remnants, boots and shoes, machine tools, and starch, exports of which are estimated approximately one million dollars annually. In addition excise duties on gasoline increased from 160 to 360 piasters, kerosene from nothing to 44 piasters per metric ton.
United States would appear less affected than principal European countries and there is no evidence discrimination.
Have discussed questions raised in the Department’s telegram 73 with Residency, French, Italian and Belgian Legations. I gather impression that apart from Residency opinion prevails that principal capitulatory powers when agreeing to provisional commercial accords with Egypt did not act sufficiently in concert with result that agreements were given under varying conditions. Now strong desire particularly on the part of Italians for concerted common action to question right of Egypt to revise its rates of duty not under custom and usage but under reservations made by French and Italians when giving their consent to establishment of provisional commercial accords that schedules would not be increased during life of accords.

While Residency has not reached any definite decision I gather that it would not associate itself in common action and that while representations would be justified on the basis of its note of accord agreeing to “minor modifications” it prefers to maintain position of aloofness.

Our position would seem to be strongest of any of capitulatory powers by virtue of express reservation with regard to all rights under treaty, custom and usage contained in Legation’s note of February 16, 1930, a reservation which I cannot find any other power made. Further, our position would seem fortified by fact that in same note adherence was given to particular rates only[;] powers are not disposed to rest any objections to be made to present increases on capitulatory rights which French, Italians and Belgians consider were waived insofar as right of Egypt to revise tariff is concerned when provisional commercial accords concluded.

Before promulgation of rates of 17th I had assured myself that there would be no discrimination against American products. In view of apparent desire of Government to meet our views in tariff revision so far as budgetary situation permits I am of opinion it would be unadvisable to raise tariff issue at this time.