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.
[Enclosure]
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.
[Page 208]
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.
[Page 209]
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.]
P. S. Since the above has been written, I understand that the
apple question is in process of adjustment.
