651.113/132: Telegram

The Ambassador in France (Straus) to the Acting Secretary of State

342. Department’s 210, July 21, 6 p.m. I saw Léger at the Foreign Office yesterday afternoon to discuss various outstanding commercial difficulties, films, copper reclassification and import surtax, impressing upon him the unfortunate reaction in America to the French attitude on these various points and the possible difficulties that such an attitude would have when it might become a question of legislating with respect to a tariff on wines.

Léger received me cordially and promised an investigation and prompt action.

This morning De la Baume head of the Commercial Relations section of the Foreign Office asked Marriner to come and see him to discuss the points I had raised with Léger.

With respect to the film question he said that the decree was valid for 1 year and that the quotas established therein could not be diminished in that time. He said that he had thought that it had been understood that so far as the substance of the decree was concerned it was satisfactory to the motion pictures industry. Marriner told him that this did not appear to be the case and that there were indications that the French moving picture theatre interests were not satisfied.

With respect to copper reclassification De la Baume promised that the Foreign Office would write today to the Ministers of Commerce and Budget urging upon them on the basis of America’s action with respect to dress samples the reduction of the copper turnover tantamount to 2 percent. He was fairly sanguine about obtaining the consent of the Ministry of Commerce but not so sanguine with regard to the Department of the Budget.

M. de la Baume then took up the question of the exchange surtax. He said that some time ago Laboulaye had mentioned to the President that with the continued fall of the dollar it might become necessary to apply such a surtax and that the President had found this quite natural. Laboulaye, he said, had repeated the subject of this conversation likewise to Mr. Phillips.

According to information which has been furnished the Foreign Office by the French Embassy in Washington commodity prices of raw materials in the United States have risen but as yet there have been little or no rise in the price of manufactured goods. Inasmuch as the exchange surtax in France does not apply in any case to raw materials De la [Page 160] Baume felt that a large part of the trade of the United States would be unaffected by the imposition of such a tax. He pointed out, however, that with such manufactured goods, as for example automobiles, the fall of the dollar and the fact that the duty was assessed on the basis of a minimum ad valorem duty of 45% was causing great uneasiness and anxiety to the French automobile manufacturers6 who were daily insisting that a surtax be imposed. He said that up to the present time no decision had been taken but that he could not answer that it would not be taken tomorrow. He said that since the dollar had declined the same amount as the pound the French position vis-à-vis England was extremely difficult as there seemed no adequate reason why an exchange surtax should be applied to the one and not to the other. He said that with respect to the argument that France was [well?] protected by its quota and tariff system, few of the articles in the trade with the United States were subject to quota and mentioned, for example, that automobiles were not. He likewise said that in case an exchange surtax were established negotiations might be undertaken for a commercial arrangement and that on concluding such an arrangement the provisions of the law for the exchange surtax would permit the withdrawal of this surtax until such time as possibly further devaluation made it again necessary. He said that since the imposition of the surtax on English goods negotiations had been undertaken for a commercial arrangement and were now proceeding. Despatch follows.

  1. Telegram in four sections.
  2. A memorandum of July 27, 1933, by John D. Hickerson, Assistant Chief of the Division of Western European Affairs, states:

    “I might point out that the reference in the Embassy’s telegram to the French duty on automobiles is not at all accurate. The French law provides that a specific rate of duty shall be applied to automobiles but that the duty shall not at any time be less than forty-five per cent. American automobiles imported into France in 1931 paid an average duty of around sixty-five per cent.” (651.113/142)