The Minister in Norway ( Philip ) to the Secretary of State

No. 529

Sir: I have the honor to acknowledge the receipt of the Department’s confidential instruction No. 255 of September 25th last,20 with enclosures, which informed me of a conversation between Assistant Secretary Sayre and Mr. Irgens of the Norwegian Legation, respecting the relative duties on whale oil and palm oil.

As reported in my despatch No. 522 of September 18th,20 I was given to understand here by the Norwegian Minister to the United States that the Department had seemingly indicated its willingness to take up discussions with a view to effecting a preliminary agreement concerning the import duty on whale oil in the United States, prior to the opening of general reciprocal tariff negotiations with Norway.

The Department will be aware that whale oil constitutes the most valuable Norwegian export to our country at present. The commodity does not figure in the Norwegian official returns of Norwegian-American trade, for the possible reason that it is transported direct from the Norwegian floating factories in the antarctic to the United States. I understand, however, from the statistics of our own Government that Norwegian whale oil was received in the United States to the values of $2,722,165 in 1930, and $7,529,750 in 1931.

It would appear that whale oil is most largely consumed in the United States for the manufacture of soap. One of the largest of these manufactories, I believe, is operated by the Lever Brothers Company, a subsidiary of a British syndicate. It may be of some possible [Page 655] interest in this connection to mention that, apart from the Norwegian whaling operations in the antarctic, those conducted under the auspices of the British Lever Brothers Company are the most extensive.

It has been suggested to me in a report from our Consulate at Bergen that the Norwegian whaling fleet in the antarctic purchases a considerable quantity of fuel oil of American origin for their expeditions. The approximate quantity mentioned as being acquired for use during a normal season is 400,000 tons, valued at from $2,000,000 to $4,000,000—depending upon current prices.

In view of the possibility that this fact might be brought forward by the Norwegian representatives in the tariff negotiations, for the purpose of argument, I have discussed it with the American Consul General in Oslo. Mr. Bevan is of the opinion that the tank ships which accompany the Norwegian whaling expeditions take in their cargoes of fuel oil at West Indian ports and that this oil, whether of American or British manufacture, is derived from South American sources and cannot, therefore, be classified as a product of the United States.

In my respectful opinion, such a preliminary agreement as has been suggested concerning our tariff on whale oil only should embrace a proportionate concession to American trade in Norway—say a substantial reduction in the Norwegian tariff on American automobiles, together with a guarantee of unrestricted importation of motor vehicles within the maximum quantity normally required for replacements. The existing restriction placed recently by the Norwegian Government on the importation of automobiles has given rise to the apprehension that a system of quota allotments may be established here. Under such a system, foreign competitors of the United States would acquire a right to a share of this trade which they are unable at present to gain in open competition. This is due to the popular demand in Norway for American automobiles, which in quality and price excel all medium-priced cars of foreign value.

Otherwise, I think our interests would best be served by the inclusion of whale oil, an item to which Norway attaches very great importance, within the scope of the comprehensive negotiations for a reciprocal tariff agreement with that country.

Respectfully yours,

Hoffman Philip
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