550.S1 Washington/742
Memorandum by Mr. Richard W. Morin, of the Division of Western European Affairs, of a Conversation Between American Representatives and the Norwegian Minister (Bachke), May 18, 1933
Draft 47
Present: The Secretary of State, the Norwegian Minister and a Member of his staff, Mr. Moffat, Mr. Livesey (acting as spokesman), Mr. Culbertson, Mr. Wiley and Mr. Sussdorff.
Mr. Livesey presented the customary summary of previous conversations which had taken place with other governments preliminary to the Monetary and Economic Conference and explained the tentative position of this Government, in so far as it had been evolved, concerning the Conference.
At the conclusion of Mr. Livesey’s explanation the Norwegian Minister asked for a definition of a de facto stabilization of currencies. Mr. Livesey explained that he had in mind an arrangement among the principal countries to prevent large and rapid fluctuations of their currencies, without establishing a fixed parity at this time. The Minister wished to be assured that the United States was prepared to support such a move. Mr. Livesey stated that in all probability we would be willing to undertake such an arrangement with other countries, preferably before the convening of the Conference. Upon the Minister’s desire to know at what point de facto stabilization was contemplated, Mr. Livesey stated that the matter was under consideration but that he was unable to give a definite answer to the Minister’s question at this time. The Minister indicated that he understood that such a de facto stabilization would permit of currency fluctuations within certain limits and that it would be brought about by an understanding among central banks, to which Mr. Livesey agreed. The latter went on to say that the ultimate aim, according to our conception, was an improved gold standard. Upon the Minister asking whether the improvement involved a [Page 552] change in the base, Mr. Livesey said what we had in mind was an improvement in the “rules of the game” and that the details would have to be worked out later by the central banks. The Minister had no further remarks about the monetary question, beyond the negative statement that his Government was not interested in matters of silver.
The Norwegian Minister expressed great interest in so far as the economic phases were concerned. He asked for a restatement of our position with regard to bilateral treaties within the framework of the unconditional most-favored-nation clause, which was given by Mr. Livesey. The Minister was in apparent agreement. He asked whether this Government expected to undertake negotiations of bilateral treaties at once and was informed that it was not our intention until a definite grant of power which the President was seeking had been bestowed. The Minister said he was much interested in the matter of concluding the treaties and pointed out that trade had been hindered not only by tariffs but by other restrictions, in the removal of which he was also interested. Mr. Livesey indicated that our interest was not confined to tariffs alone but extended to all restrictions as well.
The Minister felt that regulations with regard to the marking of goods often acted as a restriction upon trade and that his Government might be interested in an international agreement establishing uniform marking. Mr. Livesey stated that while this matter had been considered from time to time by the League of Nations he was doubtful that the Conference would take up details of this sort.
The Minister next asked as to whether the Conference intended to discuss the matter of shipping. Norway, he said, as the possessor of an important merchant fleet, was much interested in unrestricted shipping. The subsidies, direct and indirect, on merchant marines, premiums, et cetera, had created superfluous world tonnage. Norway’s position was that shipping ought to be allowed to develop along its natural lines on a basis of equal national treatment. In other words, there ought to be more ordinary commercial competition among merchant fleets. This he felt was at least in line with the principles of the draft agenda for the Conference. As an example of the type of restriction which he had in mind he wished to cite an American regulation, which he believed to be in the Revenue Act, which provided that oil brought into the United States and refined here and subsequently put on American vessels for use on those vessels was entitled to a drawback on the ground that it had been reexported; but if supplied under the same circumstances to foreign vessels for use on board the vessels, the oil was not entitled to a drawback. The Minister referred, in this connection, to a decision of the United States Supreme [Page 553] Court which had defined what constituted “exporting” and he felt that the regulation to which he had just referred was inconsistent with that definition. At any rate he felt it was a case of discrimination and not in conformity with national treatment, though his Government had as yet made no reclamation. Mr. Livesey stated that he was not familiar with the regulation to which the Minister had referred and was consequently not in a position to discuss it. The Minister said that he had mentioned it merely as an illustration of a method of discrimination. It was Mr. Livesey’s belief that the anticipated legislation was sufficiently broad to enable the President to handle a situation such as this, as well as more obvious ones.
Upon the Minister expressing an interest in mail subsidies, Mr. Livesey made the opinion that it would not be a central subject which would come up at the Conference. The Minister said nevertheless that it was a subject of great importance to fleet owning countries. Mr. Livesey was of the impression that the powers which the President intended to acquire would be of importance in this matter, but he was not prepared to go into it at this time.
- Approved by the Assistant Economic Adviser (Livesey).↩