The Ambassador in Spain (Bowers) to the Secretary of State

No. 559

Sir: With reference to my despatch No. 421 of July 2,29 No. 339 of April 16, and other despatches on the commercial situation in Morocco, as well as to Mr. Blake’s despatch No. 943 of May 31st last, I have the honor to report that the Italian Chargé d’Affaires called on me today to inform me that his Government had protested against the recent [Page 858] imposition of customs duties in the Spanish Zone of Morocco and to ask me that I acquaint the Department of the situation to the end that if it judge it advisable an American protest may also be made.

The Boletin Oficial de la Zona de Protectorado Español en Marruecos (a publication not received by this Embassy), of March 31, 1934, contained a Dahir imposing a consumption tax on wheat and flour. This Dahir—only a copy of which can be enclosed in time for this pouch—establishes an internal consumption tax on imported wheat and flour. Thus a nominally fiscal tax amounts to a protective duty.

On May 3 the Italian Government instructed their Consuls in Spanish Morocco to inform the Governor General, with reference to this Dahir, that Italy reserved her rights.

On July 5 in an extraordinary number of the Moroccan Official Bulletin other so-called consumption taxes, which in reality amounted to tariff duties, were imposed on soy beans, cotton seed, peanut, sesame, linseed, colza and rape oils and similar oils imported into the Spanish Zone of Morocco. A consumption tax was also imposed on rubber, saccharin, alcohol, sugar, gasoline, coffee, tea, wines and ammunition. These taxes constituted “a special importation tax on imported goods”—I will endeavor to secure and forward to the Department a copy of the Official Bulletin in question—.

At this point the Italian Consul at Tetuan was instructed to ask the point of view of his French and British colleagues. The French Consul replied that he considered the taxes legitimate on account of the present economic difficulties in the Zone and stated that they are identic to the measures taken in the French Zone. The British Consul, however, was of the opinion that the taxes violated the Act of Algeciras and suggested to his Government that a protest be made.

The Official Bulletin of August 10 contained a Dahir, a copy of which is enclosed,30 prohibiting the importation of slippers into the Spanish Zone. This measure was directed against Japan and was similar to a Decree issued in French Morocco, but the Italian and British Consuls in Tetuan protested against it as a violation of the “open door” provided for in the Algeciras Treaty.

Few of the above mentioned Decrees affected Italian trade with Morocco, but the Italian Government, after a close study of the theoretical side of the question, instructed the Embassy at Madrid to make a firm protest and to get in touch with the missions representing the other signatories of the Act of Algeciras in order that they might inform their Governments to the end that all signatories should make a protest about the same time. The Italian Chargé d’Affaires has already communicated the above to his Dutch, Belgian and British [Page 859] colleagues. He has been informed that the British have protested against the Dahir prohibiting the importation of slippers and that they are considering a protest with regard to the “consumption taxes”.

The Italian Embassy here sent a formal Note to the Spanish Government on November 6th, stating that all the Dahirs mentioned were completely contrary to the spirit and the letter of the Treaty of Algeciras, reserving their rights, and asking the repeal of the taxes in question.

The Italian Chargé d’Affaires is of the opinion that Spain wants a revision of the commercial clauses of the Algeciras Treaty, but intends to bring this revision about by a gnawing policy rather than an open request for revision. He called attention to the fact that most of the Dahirs appeared in an extraordinary number of the Official Bulletin and asserted that this showed a desire to conceal them at least temporarily. He regards all the “consumption taxes” as a disguised form of protection. In conclusion, he stated his hope that if the United States Government decided to protest it would instruct this Embassy to do so by cable in order that the various protests should have an immediate cumulative value. Even so, he was not optimistic as to their effect, but believed that in any event the action should be taken.

I am sending a copy of this despatch to our Diplomatic Agent at Tangier with the suggestion that he should forward his comments thereon directly to the Department.

Respectfully yours,

Claude G. Bowers
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