651.116 Radios/31: Telegram

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

47. My 46, January 18, 7 p.m.1 By decree of January 7 published in the Journal Officiel of January 16 quotas for the first 3 months of 1932 have been fixed first on radio sets, accessories and parts and second on lamps and tubes. According to French statistics the total value of French imports from the United States subject to the quotas for 1931 under the first category is 16,000,000 francs and under the second 4,000,000 francs.

No indication is given as to the basis on which the quotas for the various countries have been fixed. The monthly quota on sets and parts represents approximately 82 percent of the total average monthly imports of sets from all countries during the last 3 years and on tubes approximately 75 percent. The quotas assigned to the United States represent about 75 percent and 73 percent, respectively, of our average monthly imports of the past 3 years.

From the American standpoint the serious objection to the quota is that the business is a new and rapidly developing one and 1929 and 1930 figures are not now an equitable measure of normal trade. The actual quota fixed on American sets and parts is 166 quintals monthly out of a total of 1541. However, in 1931, 19 percent of the imports came from the United States and on this basis the quota should be 293 quintals. The total monthly quota of lamps and tubes is 150 quintals of which the United States quota is 15 quintals. During 1931, 19 percent of the total French imports of lamps and tubes came from the United States and on this basis the United States quota should be 28½ quintals.

The other two countries principally interested and receiving the largest contingents are Holland and Germany. Imports from Holland were much less in 1931 than in 1930 and the quota for Holland [Page 196] based on the 3-year period is greater than the actual imports from Holland during 1931. As for Germany radios may be imported as reparation deliveries in kind in any quantity without regard to the quota. It is a principle of French policy to exclude deliveries in kind from the provisions of the most-favored-nation clause and it is not clear what practical effect the exclusion from the quota will have in this case. In effect the selection of historical rather than current import figures as a basis for a quota in this new and rapidly growing business because of our greater progress in development works a special hardship upon the United States. Apparently the Department has decided for the present upon a policy of accepting in principle the quota system recently established in France and in other European countries. I have already reported that France has announced that it expects to use this system extensively. I understand about 60 quotas are about to be put into effect. France probably would be prepared to undergo an economic war with the United States rather than surrender its quota policy because this policy has been extremely effective in the short time it has been in application in improving the French balance of trade. The quota system in Europe may become so general that the American Government itself may be forced to consider establishing a quota system or discriminating against countries employing this system.

I think, however, that it is absolutely essential to obtain a just contingent for United States products in every French quota which is established and that our Government should be prepared to exercise as much pressure as is necessary to bring about this desired result. Article [Section] 338 of the American tariff2 might be applied in these cases if deemed advisable.

With regard to specific cases there has not been much ground for complaint until now concerning the share for American products under French quotas although it has been necessary in some instances to act with much energy and we have secured some revisions and considerations. In the present case, however, I feel the circumstances warrant very definite action and I ask your authorization to make a formal protest. If you care to prepare the text of this protest, perhaps also referring to various violations of the modus vivendi3 as admitted during our recent conference in Washington, I should appreciate your telegraphing it to me at your earliest convenience.

  1. Not printed.
  2. The Smoot-Hawley Tariff of June 17, 1930; 46 Stat. 704.
  3. Effected by an exchange of notes in October and November of 1927, Foreign Relations, 1927, vol. ii, pp. 696703.