611.1531/11: Telegram

The Minister in Honduras (Lay) to the Secretary of State

65. Referring to my despatch No. 1172, August 10, 1934, Minister of Finance states that he desires some idea regarding concessions probably [Page 375]requested by United States before he can begin exploratory conversations. I do not believe he will agree with belief expressed in instruction No. 592, July 20, first paragraph last sentence if equivalent means substantial preferential reduction in duties on principal products imported from the United States. There are no other products in addition to bananas on which Honduras could obtain concessions. Value of Honduran bananas to Germany six times value of German exports to Honduras; England four times and to United States twice the value.

Please reply by telegraph, as I am leaving end of August, whether the Department approves my stating to Minister of Finance, if he is definitely opposed to granting preferential reduced duties on our principal products, that we expect Honduras to accord us some other concession such as preferential treatment under a tariff law on the Salvador model, in return for a guarantee of continued free entry on bananas.

Lay