651.116 Nitrate/29: Telegram

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

457. Your No. 582, September 17, 6 [5] p.m. The Department regards existing contributions on imports of rubber and cotton, as well as proposed contributions on imports of nitrates, for the direct benefit of the appropriate French interests competing with the foreign interests from whom such contributions are exacted as the price of the privilege of continuing to conduct their previously established businesses in France, as being intrinsically vicious in principle and, when coupled with quotas, as incompatible with equitable practice in international commerce as hitherto conducted.

Whether or not such proposals could obtain legislative sanction if submitted to Parliament in specific cases, and irrespective of whether this diversion of revenue from the State to the benefit of private French industrialists and producers by governmental decree could be sustained in the French Courts, or constitutes a clear discrimination against American interests, the Department does not desire the French Government to rest under any misapprehension with respect to our attitude in the premises.

You may, in your discretion, say frankly to the appropriate French officials that this Government regards the proposed special regime for nitrates, as well as the quotas for lumber, as being part and parcel of a general policy of intricate and oppressive restriction, which is at [Page 263] variance with the whole spirit of international economic cooperation advocated by the International Chamber of Commerce, promoted through the agency of the League of Nations, and incorporated in various treaties, agreements and proposals for economic solidarity, to which the French Government has been a party and to the formulation of which French diplomacy has largely contributed.

It is highly probable that serious pressure will be brought to bear upon this Government to institute retaliatory measures or to create special regimes which would adversely affect characteristic French products. You may, in your discretion, represent these considerations to the appropriate French authorities, with a view to restoring equitable and non-discriminatory conditions of trade between the two countries as soon as possible.

Barrett Company states that it was advised that Nitrate Commission informally justified the small quota assigned Arcadian Nitrates by the fact that this Government does not accord special facilities to French products. In this connection, it is pertinent to observe that our tariff is entirely non-discriminatory.