611.9131/40
The Persian Minister (Djalal) to the Assistant Secretary of State (Sayre)
My Dear Mr. Sayre: In a memorandum which I have received from the Department of Commerce, stress is laid on the fact that Persian carpets and American automobiles form an important part of the commerce between the two countries. These two commodities should have a leading part in establishing the reciprocity in trade between the two countries.
The Department of Commerce is desirous of drawing the attention of the United States Department of Commerce to the facilities made in favor of the importation of American automobiles, trucks, tires, and spare parts. In the first place, these articles are exempt from customs duties, except in the case of private automobiles which are subject to only ten percent duty when their price exceeds 30,000 Rials. Secondly, they are exempt from the Trade Monopoly Law, which would subject them to wholesale valuation on their entry into the country, as well as to buying a certificate of issue of Persian commodity equivalent to their value. On the contrary, however, a special regulation has been passed in favor of American automobiles, trucks, and their spare parts, by which all of these automobiles, and trucks have to be valued at the cost of their reaching the frontier, without [Page 886] adding to their value wholesale customs duties and other expenses after their entry into the country, and, at the rate of that valuation, a certificate of issue of interior goods is bought. By this means a forty percent reduction is made in the valuation of the American automobile, truck, etc. Consequently the importer has to pay forty percent less in buying Persian goods in return for his importation, and has to pay less for the certificate of issue.
The memorandum goes on to say that, in spite of all the facilities and the consideration shown by the Persian Government to the United States’ principal article of commerce to Persia, the United States Government keeps the important item of Persia’s commerce to America, that is to say, the carpets and rugs, under a very heavy customs duty of forty-five percent ad valorem, provided that the duty on each square foot should not be less than fifty percent [cents]; and no consideration is shown to the trade of Persian carpets in the spirit of reciprocity. Such treatment naturally makes the development of trade between the countries almost impossible, and besides, such a prohibitive duty gives an opportunity to certain carpet establishments in America to make their own carpets by machine after the style and design of Persian carpets, and to sell them under the name of Persian carpets at a very low price. This makes the export of Persian carpets almost impossible; and, as yet, no steps have been taken, as is usual, to stop the manufacture of these imitation Persian carpets.
Although the Persian Government made all these facilities in the interest of commerce without making it conditional on a reciprocal basis, they expect the United States Government, well-known for its fair play and determination to break down all the tariff barriers raised in every country, by making fair commercial treaties on reciprocal bases, to show the same consideration to the Persian carpet trade, which is almost breaking down under the heavy, prohibitive customs duties as shown above.
In return for what Persia has done to facilitate American trade in Persia, though Persia rendered all these facilities before asking for similar treatment, it makes it doubly incumbent on the generous commercial policy of the United States to lighten this heavy burden of customs duties on Persian carpets, thus increasing and facilitating the trade between the two countries.
The Persian Government thinks that a thirty percent ad valorem duty is the maximum that the United States Government can put on Persian carpets.
I shall be greatly obliged if you take under favorable consideration the explanation and view of the Persian Department, and let me have your view and proposition on the subject of developing progressive trade between the two countries on a reciprocal basis.
Yours sincerely,