811.512351 Double/119

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

No. 2382

Sir: I have the honor to enclose a copy of a letter, with French translation, which I have today sent to M. Tardieu, Minister for Foreign Affairs. As stated, it is an informal and unofficial communication and a perusal of its contents will make its object entirely clear.

The Department will possibly recall that when the double taxation negotiations were taking place during 1930, and the experts had reached a position where it seemed probable that existing differences could be agreeably compromised, M. Tardieu, then, as now, Prime Minister, transmitted to me a lengthy communication7 making many objections to American tariff policies, which was used as an excuse for not adjusting the double taxation problem.

After my informal conversation with M. Tardieu on this subject two weeks ago, I felt that it might be helpful to adopt the course indicated by this communication and file this résumé of existing irritations before renewing my conversations with the Foreign Minister. At least, the enclosed communication accurately presents some of the present outstanding difficulties.

Respectfully yours,

Walter E. Edge

The American Ambassador (Edge) to the French Minister for Foreign Affairs (Tardieu)

My Dear Mr. President:8 When I had the very gratifying informal conference with you ten days ago, I drew attention to the [Page 207] fact that a succession of incidents, primarily associated with French economic and commercial policies, had greatly disturbed public opinion in the United States and that I felt a friendly gesture like the settlement of the quotité imposable might contribute greatly toward bringing back a normal or receptive state of mind. Since that time, the questions at issue between our two countries seem to be multiplying rather than otherwise, and the necessity for some helpful concessions becomes, in my judgment, more and more necessary, envisaging even more important problems for later consideration. Of course, I have no desire to press for any consideration that is not on its merits fully justified, and, under the circumstances, it has occurred to me that it might be helpful if I informally furnished you with a memorandum briefly reviewing the commercial and economic questions daily increasing which are fanning discontent and encouraging misunderstandings and which, through your cooperation, I am hopeful can be somewhat alleviated.

I indicated to you at the time that a settlement of the long standing question of the quotité imposable, practised alone by France, would go a long way towards relieving the tension, and that I believed a solution of that problem might be reached without in any way trespassing upon domestic political considerations.

I know you will understand that this letter is not an official recital of complaints but, I repeat, merely a concentration of some of the recent controversies of a commercial nature that have been raised between the two countries, which have naturally intensified feeling and tend to make more difficult the possible adjustments of even greater issues.

In addition to the double taxation complications, one of the outstanding complaints has been the announcement almost daily of a new quota restriction of imports and actual embargoes as well. The methods employed in determining the allotments have been severely criticized. Inquiry has established the fact that the representatives of almost every country seriously affected, with the exception of the United States, have been called into consultation before the allotments were made. In some instances, the quota total seems to be reached by applying one year’s previous imports, in others, two, and even five years, but whatever the method it seems to lessen the amount which, in ordinary competition, would have been exported from the United States even though there had been a quota restriction. It is even suggested that the German quota allotments have been materially increased through considering deliveries in kind as a normal exchange of trade.

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Only last week a new decree was promulgated imposing a complete embargo on all fresh fruit shipments from the United States, the reason being assigned that the San José scale had been discovered in some previous shipments of barrelled apples. Just why it would be deemed necessary, without advance notification of any kind, to exclude all other types of fruit in no way affected or blemished, is very difficult for me to explain. The decree was so drastic that even shipments en route were included in the order.

The raise in American tariffs, of which there was considerable complaint in France when the 1930 American tariff bill was enacted,9 has been more than offset by raises of the French tariff on various exports from America so that the former criticism in France because of American tariff rates should be entirely removed. As you, of course, understand, the American tariff system in no way restricts the total of importations. There is no quota system. Every country is treated exactly alike under our most-favored-nation policy so that France is given absolute freedom in competition with other countries to trade in the United States.

Further, the attention of the French Government has been frequently drawn to the violation of the terms of the modus vivendi under which the United States and France have been operating since 1927. In a number of cases other countries have been given preferential tariff rates, which is contrary to the terms of the modus vivendi. Upon protest on the part of the Embassy, some of these violations have been corrected but others still remain unadjusted.

Only recently the Embassy was advised by representatives of American oil companies operating in France that a new regulation had been proposed which would compel their subsidiaries to purchase a certain amount of raw material (crude oil) from Rumania: in other words, to this extent making it impossible for them to export their own crude [oil] into France. This introduces an absolutely new question in trade restriction through constituting preferential treatment in purchases.

I am informed a new tax has recently been proposed on American stock brokers located in France transacting business on the New York Exchange; in other words, a tax on orders they place even outside of France.

Then the misunderstanding regarding rapid gold withdrawals, while in my judgment much overemphasized, nevertheless added fuel to the fire.

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From the very general presentation of some of the existing difficulties as outlined above, you can well understand, Mr. President, why I felt that some friendly gesture from France to the United States at this time would be most helpful in preparing to meet more important international problems in the future. While these irritants are perhaps relatively small, nevertheless they arouse considerable public resentment in the United States as members of Congress from every section of the country are made more or less familiar with these barriers to trade through the complaints of their local dealers who are frequently affected. It is my desire to try as far as possible to improve the existing state of mind. That is why I was so anxious to have the double taxation, which has been discussed so much in the public press in the United States, adjusted.10 If the proposal we have made could be accepted, which, I believe, is quite similar to those France has received from other countries, the publication of this fact throughout the United States, would, in my judgment, have a most helpful effect.

I am sure you will understand this letter is merely for the purpose of enabling you to have in your dossier some of the arguments with which otherwise you would naturally not be directly familiar. At your convenience, I should be very glad to call on you and discuss the matter further with you.

With assurances [etc.]

Walter E. Edge

P. S. Since the above has been written, I understand that the apple question is in process of adjustment.

  1. Foreign Relations, 1930, vol. iii, p. 45.
  2. M. Tardieu was President of the Council of Ministers as well as Minister for Foreign Affairs.
  3. See Foreign Relations, 1930, vol. i, pp. 246 ff., especially despatch No. 676, July 3, 1930, from the Ambassador in France, p. 249.
  4. For correspondence relating to the double taxation matter, see pp. 262 ff.