The Ambassador in France (Edge) to the Acting Secretary of State
[Received April 26—8:40 a.m.]
253. Your 159, April 23, 4 p.m. As has been clearly set forth in my despatch 2430, April 2nd,21 I am of the opinion if the situation regarding the application of the French quota system is not approved some definite action should be taken by our Government. Notwithstanding optimistic articles from Washington of satisfactory progress in the quota negotiations which have appeared in French newspapers and were referred to in your telegram No. 15622 as having been encouraged [Page 221] by the Department, I understand the Department’s real attitude to be that “no assurances can be given that it may not at any moment invoke article 338 against French imports”. While of course the Embassy has in no way indicated any other policy if discriminations and unfair treatment are persisted in nevertheless in my judgment it would be most unfortunate if the Department resorted to this action unless a satisfactory understanding or readjustment is after very reasonable effort found to be unobtainable. It should be kept in mind that the modus vivendi while at times trespassed upon nevertheless still protects approximately 95 percent of American exports.
The Department’s conclusion that the French are delaying consideration of quota criticisms does not seem to me to be wholly warranted at this time. The Department will no doubt agree that Tardieu has fully complied with the assurance he gave me a few weeks ago that he would dispose of the double taxation matter without unnecessary delay.23 Further, he has in no wise used my insistence in that regard as a quid pro quo to delay or to discourage a review of our quota protests. On the contrary before the Department instructed the Embassy as to the policy it wished undertaken Tardieu had opened the subject of his own accord and suggested a method for the immediate consideration of our complaints as to quota administration. (See my 241 and 242, April 20, 7 p.m., and my paragraph speaking of time consumed). I trust the Department will recognize that the Embassy was without any definite instructions other than the authorization to employ the usual protests until the Department’s 156, April 21, 6 p.m., was received only last Friday. In urging haste now the Department will recall that it has required many months to reach a decision as to the policy to be pursued notwithstanding the fact that it has been provided with frequent and comprehensive reports of every move that has been made by the French on this question and that I have frequently sought a definition of policy. The Department’s proposals could not be taken up with Tardieu at this time as he left Paris 2 hours after my interview of April 20th reported fully to the Department and I understand returns today.
In spite of his activities in connection with the elections next Sunday I shall arrange to see him just as quickly as possible and personally press points a to f inclusive. In the meantime efforts are being made with other officials of the French Government to obtain the readjustments the Department requires. Regarding point b, which is one of the most important, the Foreign Office indicates informally [Page 222] that it is in accord in principle with your idea that a uniform formula should be employed in calculating a basis for quotas and will urge its acceptance by the other interested Departments of the Government for future quotas. I am hopeful of obtaining satisfaction on most of points a, c, d and f. Regarding e, I understand that the Ministry of Agriculture has all the machinery necessary for operating a license system. The Ministry of Commerce does not grant licenses and I may find it reluctant to set up the somewhat elaborate machinery the Ministry of Agriculture has found necessary. Upon his own initiative Coulondre, Chief of the Economic Section of the Foreign Office, has arranged that he and other members of the French Government shall meet representatives of the Embassy this morning at 10:30 to discuss all phases of the matter.
Referring to the Department’s 158, April 23, 11 a.m.,24 I am somewhat regretful that the Department has given Claudel the terms of its proposals as from my experience with the French one always starts at a disadvantage when one puts all his cards on the table. In addition I have always felt there was a possibility of utilizing present commercial disturbances to encourage a strengthening of the modus vivendi or possibly obtaining a most-favored-nation treaty with a quota provision satisfactory to both countries.