The Minister in Portugal (Caldwell) to the Secretary of State

No. 68

Sir: With reference to my telegram No. 22 of October 18, 6 P.M., I have the honor to report that the local Press carried a news item on October 19 of which the following is a literal translation:

“The Anglo-Portuguese Agreement with regard to flag discrimination was concluded on the 14th last.

“By this Agreement, the Portuguese Government binds itself to abolish any flag discrimination, in respect of British vessels in Portugal and the Adjacent Islands, until July 1, 1934, and in the Portuguese colonies until July 1, 1936.

“In compensation, the Government of the United Kingdom guarantees to continue until June 30, 1941, the protection set forth in the Anglo-Portuguese Agreement of 1914 and accorded in England to the trademarks [Page 653] of “Porto” and “Madeira” wines, even if the treaty ceases to be valid. The Agreement is not applicable to coastwise service.”

The same announcement appears in the London Times for October 19 (page 11), the only significant difference being that, while the Lisbon papers said that Portugal had promised to abolish flag discrimination “until” certain dates (July 1, 1934, July 1, 1936, respectively), the London Times states that Portugal had agreed to give up these discriminations “by” July 1, 1934, for Portugal and the Adjacent Islands, and “by” July 1, 1936, for the Portuguese colonies. While I have not seen the text of the agreement between Portugal and Great Britain, I am assured by Mr. A. H. W. King, Commercial Secretary of the British Embassy here, whom I have consulted in the absence of the British Ambassador, Sir Claud Russell, from Lisbon, that the form of the announcement in the London Times for October 19 is substantially correct.

The above item, taken by itself, is somewhat disturbing, for it seems to indicate a special concession to Great Britain rather than a new policy on the part of Portugal on the question of flag discrimination, fulfilling previous promises, which will apply generally, or, at least, to all countries, including the United States, which have most favored nation agreements.

I am assured, however, by Mr. King, confidentially, that the Embassy here understands clearly that Great Britain can gain no special favors in the matter which do not also apply to other countries. Mr. King further says that he has every reason to believe that when the necessary decree is published it will be found to apply to the United States, Germany, Norway and other countries.

. . . . . . . . . . . . . .

Beyond an informal inquiry at the Foreign Office, already reported to the Department, I have felt that the present moment would not be well chosen for such representations. The various ministers, including Dr. Caeiro da Mata, have been very busy with conferences arising out of a cabinet crisis which has been described in other despatches, and are, accordingly, unlikely to be willing to give a definite ruling on the effect on American interests of the Anglo-Portuguese agreement of October 14. Mr. Koren, the able and experienced Minister of Norway, whose position in the matter is almost precisely similar to our own, is expected to return to Lisbon on November 1. I think it is likely that, if the matter is not cleared up in the meantime, he will desire to make concurrent representations and inquiries. For these reasons I have decided to wait for the time being and in the meantime I respectfully request the Department’s instructions in the premises. Of course, it is [Page 654] entirely possible that new developments may either make prompt action necessary, or may, on the other hand, clear up the whole situation without any further steps.

Respectfully yours,

R. G. Caldwell