659.006/28
The Minister in Denmark (Coleman) to the
Secretary of State
[Extract]
No. 103
Copenhagen, July 6, 1932.
[Received July
19.]
Sir: I have the honor to refer to despatch
No. 43 dated April 9, 1932, enclosing an aide-mémoire left by me at the Foreign Office on April 8,
in protest of the workings of the Exchange Control Board against
American imports.
In the meantime no reply and no explanation of the workings of the
Board was given. In one important instance, however, after an import
permit had been refused an Oil Company for the importation of
American oil for the present quarter’s needs, representations were
made and the application was reconsidered and a sufficient import
permit granted. Fewer complaints have been lodged and no new
concrete cases of discrimination are now on record in the
Legation.
On April 29 I was asked to call on Mr. Mohr at the Foreign Office and was handed a Note Verbale in reply to my protest mentioned
above. A copy of this Note is enclosed herewith and will be found to
be indefinite and in no way answering the protest of seeming
discrimination.
It is more or less the same unsatisfactory argument maintained from
the first, nevertheless my opinion on the question remains unchanged
as fully expressed on the last page of my despatch No. 85 dated June
14, 1932,5 “Foreign
Exchange Control”.
. . . . . . . . . . . . . .
Respectfully yours,
For the Minister:
North
Winship
Counselor of Legation
[Enclosure]
The Danish Ministry for
Foreign Affairs to the American
Legation
O.P.I. Journal No. 73. K.38/USA
Note Verbale
In reply to the aide-mémoire of April 8th
and to the verbal inquiry of the American Legation, the Ministry
for Foreign Affairs have the honor to give the following
information:
The tariff increases, import restrictions and other restrictive
measures introduced by various countries during the last years
have
[Page 161]
affected the
principal Danish exports, viz. agricultural produce, to an
exceptional degree. As a result of these measures Denmark is no
longer able to maintain her export to the same extent as
formerly, and there are, in consequence, fewer bills of exchange
available for purchases abroad. Consequently Denmark is unable
to maintain her usual import trade; when obstacles are placed in
the way of the export trade, causing the latter to decrease,
imports must necessarily be reduced in the same ratio if the
economy of the country is to remain on a sound basis. It has
therefore been necessary to introduce an exchange regime
limiting imports and arranging an allotment of the limited
quantities of foreign bills of exchange available by issuing
exchange certificates, i.e. permits to buy foreign currency.
The purpose of this arrangement is to secure, as far as possible,
the maintenance of the normal ratio between the value of imports
and that of exports. When distributing the certificates the
character of the goods in question is first and foremost taken
into consideration, preference being given to applications as
regards raw materials and other articles which form the basis of
the export trade (without which there would be no foreign bills
of exchange available) or are used in other productive
trades.
But in order to avoid arbitrariness and injustice as against
individual countries endeavors are furthermore made, in
distributing the exchange certificates, to maintain the same
ratio between imports from and exports to each country as that
which prevailed before the restrictive measures of other
countries came into force. (It goes without saying that the
endeavors to maintain the normal ratio between imports and
exports apply to the year as a whole, not to the separate
months).
It will thus be seen that due regard is being paid to the fact
that Denmark normally has an adverse balance of trade as against
certain countries, including the United States. No attempt is
made to do away with the passive balance, the exchange control
measures being directed toward the prevention of a further
increase of the adverse ratio, an increase which would disturb
the economic equilibrium of Denmark.
The average figures for the last three years show that during
that period Denmark has imported about 15 times as much from the
United States as she has exported to that country. During the
part of the present year for which statistics are available
(i.e. the first 5 months) the value of Danish exports to the
United States was about 1.8 million Kroner. If the normal ratio
between exports and imports had been maintained imports from the
United States would
[Page 162]
thus have amounted to between 25 and 80 million Kroner. As a
matter of fact, however, they have reached the sum of 49 million
Kroner. It will thus be seen that exchange certificates for
imports from the United States have been granted to about twice
the extent envisaged by the exchange regime in force. In other
words, the United States have, so far, received an exceptionally
favorable treatment, probably more so than any other
country.
The cases cited in the above mentioned aide-mémoire, concerning the refusal of exchange
certificates, may therefore be explained by the fact, that
exchange certificates for imports from the United States have
already been granted to an extent far exceeding the above
mentioned ratio.
Copenhagen, June 28,
1932
.
