651.116 Radios/32: Telegram

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

39. Your 14, January 18, noon.4 (1) While this Government is definitely opposed to any system of quotas, a fact you might well impress upon the French in any discussion you may have with them on quotas, the Department has not taken any definite position as to what its policy will be vis-à-vis the present quotas which are being so extensively adopted by France. It is not correct to assume that we have decided for the present to accept them in principle. The fact is rather that we must necessarily recognize that these quotas are actually being established to the curtailment of American trade and that we must make the best of a bad situation.

(2) In so far as the question of the allotment, itself, of quotas is concerned the Department feels that when quotas are established the United States should receive a share of the permissible imports equal in proportion to the share of the trade it would have obtained during the quota period had the restrictions not been imposed. It is recognized that such a share is not easily determined and that the factors in each case are likely to vary. The general basis is perhaps theoretical and difficult of practical application, but it leaves the way open to use any evidence tending to show what our trade would have been except for the restriction without subjecting you to any charge of inconsistency should the evidence in one case be quite different from another case.

(3) In the case of radios the evidence tends to show that American exporters under open competitive conditions would have obtained a larger proportional share of the radio market for the period covered by the quota, so that even a quota based on 1931 trade would curtail our trade to a greater degree than that of other countries because of the sharp upward trend of radio shipments to France. Basing the radio quota on the trade for the past 3 years, as the French have apparently done, is obviously not a fair set up for American exporters of radios. A quota corresponding at least to our share of the trade in 1931 would not therefore appear to be unreasonable.

(4) One general principle should be that goods in transit at the time of the announcement of the establishment of the quota should not be barred. Another principle is that it should not be retroactive.

(5) It is, of course, quite impossible for the Department to foresee all the elements that should be taken into account in all cases. It is felt that the elements in each individual case will be evident to you [Page 198] and if after taking them into consideration you feel that American trade is not getting a fair deal you should, if you see no objection to such action, take up the case in whatever way you deem best, with the appropriate authorities.

(6) I think you might, if you think it worth while, take occasion some time to tell Laval orally that these restrictions and the discriminations which France imposes on American commerce are causing growing resentment against France not only among our business men but among members of Congress.

  1. Not found in Department files.