Foreign Relations of the United States Diplomatic Papers, 1934, General, the British Commonwealth, Volume I

195 Code/184

The French Ambassador (Laboulaye) to the Secretary of State

[Translation]

Washington, April 19, 1934.

Mr. Secretary of State: In conformity with instructions which I have received from my Government, I have the honor to invite Your Excellency’s attention to the serious injury which would be caused the French shipping companies, particularly the Compagnie Générate Transatlantique (French Line), by the putting into effect of the “general code of fair competition for the shipping industry”.

As Your Excellency can observe from reading the enclosed note, several provisions of the code in question give rise to the most decided objections on the part of the French shipping companies. It is to be noted, in fact, that this code does not limit itself to requiring the application of certain rules to the operations performed by foreign navigation companies on the territory of the Union; it undertakes likewise to subject to these rules contracts for passage and freight applying to travelers or merchandise coming to the United States from Europe. There would be danger of this innovation having serious repercussions on international trade relations, which are already so difficult.

I should be much obliged if Your Excellency would be good enough to call the attention of the competent authorities to the foregoing considerations and to those contained in the enclosed note and inform me of the action which may have been taken with respect to this communication.

Please accept [etc.]

André de Laboulaye

[Enclosure]

The French Embassy to the Department of State

[Washington, April 19, 1934.]

The proposed General Shipping Code is objectionable in that:

1) Organization and Administration—It establishes an artificial and arbitrary basis of organization and administration, placing all American flag Lines in a given service in one group and all foreign flag lines, irrespective of nationality, in the same service in another single group. Each group votes as a single unit, irrespective of the number of lines in the group. This classification is being imposed on the foreign flag Lines without their agreement or consent—a voting arrangement which is contrary to the spirit of the voluntary agreement filed under U. S. Shipping Act 1916 as amended and which does not appear to be supported by the National Industrial Recovery Act itself. Certain treaties, either by their own provisions or under the “most favored nation” treatment, provide that the vessels of each country must receive equal rights and privileges with those of the other country, but the method of organization provided for denies such equal protection of the law and is, therefore, discriminatory.

2) Rates and Fares. It permits the United States Government, through the Administrator, finally and without judicial review, to fix minimum freight rates and passenger fares and establish rules of business conduct for all foreign flag Lines—in the event that such Lines and the American Flag Lines in a given trade are unable to agree voluntarily upon such rates, fares and rules—despite any special requirement as to such matters which an individual foreign flag Government may make on vessels flying its own flag.

3) Inward Trade. It brings within the jurisdiction of the Recovery Administration inward as well as outward trade and raises the question as to how far the Recovery Administration may operate outside the jurisdiction of the United States.

4) Cost of Administering Code. It requires a Line, whether or not it files a written assent to the Code, to contribute to the cost of maintaining the extensive administrative machinery established there-under, in such proportion as the Lines who have assented to the Code may determine. Should a foreign flag Line find it inadvisable, from the viewpoint of its own national interests, to file a written assent to the Code, although it may voluntarily agree to abide by its provisions, such foreign flag Line may be required to pay a substantial share of the expense of administration without having a voice in determining either the policies or activities under the Code or the amount involved—a form of taxation without representation./.