811.114 Belgium/150
The Ambassador in Belgium (Morris) to the Secretary of State
[Received October 25.]
Sir: Referring to the Department’s telegram No. 89 [69?], of October 4 [3?] 1935, I have the honor to report that Commander B. M. Thompson, of the United States Treasury Department, called at the Embassy on October 7 to discuss the question of obtaining the cooperation [Page 431] of the Belgian Government in preventing shipments of alcohol from Belgium destined for smuggling into the United States. Commander Thompson spent October 7 and 8 studying the question in collaboration with the Embassy and the Consulate General at Antwerp.
In the course of a conversation with Mr. Paul van Zeeland, Belgian Prime Minister and Minister for Foreign Affairs, on October 7, I had occasion to mention Commander Thompson’s visit and the importance which the United States Government attaches to the question of securing the Belgian Government’s cooperation in preventing shipments of alcohol destined for smuggling into the United States.
A member of my staff (Mr. Sussdorff) arranged for Commander Thompson to call at the Belgian Foreign Office on October 9, and accompanied him on that occasion. Commander Thompson was presented first to Mr. van Langenhove, Secretary General of the Foreign Office, and then to Mr. Costermans, Chief of the Administrative Section. Mr. Costermans has convoked Mr. Lebon, Inspector-General of Customs, an official at the Belgian Ministry of Finance, and Mr. Kestens, of the Belgian Marine Department, for a discussion with Commander Thompson.
At this meeting in Mr. Costermans’ office, Commander Thompson outlined orally the point of view of the United States Government concerning the importance of obtaining the cooperation of the Belgian Government. His argumentation, though much more detailed, was entirely in accord with that contained in the Department’s instructions Nos. 230, of June 20, 1935, and 242, of July 10, 1935, to this Embassy.61 The Belgian officials asked Commander Thompson to reduce his arguments to writing, which he did on the following day in the form of a memorandum, copies of which are enclosed.62
After Commander Thompson had finished the verbal presentation of his case, Mr. Lebon outlined the position of the Belgian Government in regard to the institution of landing certificates for alcohol shipped from Belgium to the United States, as follows:
- 1.
- The importing country—not the exporting country—should take the necessary defensive measures to protect itself against the fraudulent entry of merchandise.
- 2.
- Belgium has passed legislation concerning the export of alcoholic liquors to contiguous countries in order to protect its own revenues from frauds which might arise through the shipment of alcohol to border countries and its subsequent re-importation into Belgium without payment of the excise tax. This legislation could not be extended to cover alcohol shipped to the United States without submitting the matter to the Belgian Parliament. The Belgian Parliament would [Page 432] never pass special legislation covering the shipment of Belgian alcohol to the United States, because it is against the interest of Belgian industry. In this connection, Mr. Lebon laid great emphasis on the fact that the exportation of alcohol from Belgium is legal: it is the importation of this alcohol into the United States in the way it is done that is illegal. Consequently, Mr. Lebon contended, the United States—not Belgium—must take the necessary measures to protect itself against the illegal entry of this alcohol.
- 3.
- If a system of landing certificates with bond were instituted by the Belgian Government, it would be necessary for the Belgian Government to pass legislation covering all countries—not the United States alone. If legislation applied only to the United States, exporters would ship alcohol to Norway, Spain, Brazil or some other country, and it would be re-exported to the United States. Legislation covering all countries is impossible, as it would ruin legitimate, as well as illegal, trade.
- 4.
- There can be no effective check on exports. Examination of all exports would simply drive trade away from Antwerp to some other port, such as Rotterdam, Hamburg, or Liverpool. Furthermore, alcohol would be declared as gasoline, etc., and it would be impossible to detect the fraud, as no country examines goods that are intended for export in the same way that it examines imports.
- 5.
- The Belgian Government is anxious to promote trade, not to kill it, or to drive it away from Antwerp to Rotterdam, Hamburg or Liverpool.
- 6.
- Mr. Lebon said that he was certain that Germany and Holland would not agree to the establishment of landing certificates with bond and that he doubted very much if England would institute such a policy for alcohol shipped to the United States from ports in the British Isles, as distinguished from ports near the frontiers or coasts of the United States. He argued that a great world port, like Antwerp, is entirely different from small ports like St. Johns, Newfoundland, or St. Pierre-Miquelon, where everybody knows what everybody else is doing.
At the second meeting of the same persons (at which Mr. Descamps, legal adviser of the Marine Administration, was also present) in Mr. Costermans’ office on October 14, 1935, the argument continued along the same lines as at the previous meeting.
With a view to finding a possible solution, Mr. Sussdorff referred to the third paragraph of the Note which the Belgian Ministry of Foreign Affairs addressed to the Embassy on July 23, 1935, which reads as follows:
“However, at the request of the Minister of Transportation, my department is at present engaged in assembling data with a view to finding a means of offering indirect assistance to the United States Government in the suppression of alcohol smuggling,”
and inquired whether the Belgian Government had found any means of offering indirect assistance to the United States. Mr. Lebon replied that the Belgian Government had studied this phase of the question, [Page 433] but he and Mr. Costermans both admitted that no way of accomplishing the desired end by indirect methods has been found. In this connection, Mr. Lebon also stated that the Governments of Germany and the Netherlands had been informally consulted regarding what they would do if the United States invoked their cooperation in this question; the German authorities had replied categorically that they would not do anything to cooperate; the Netherlands authorities had replied that there is no law in the Netherlands which would enable them to prevent the shipment of alcohol destined for smuggling into the United States. Mr. Lebon added that the Belgian Government was convinced that it is not only against Belgium’s interest to institute a system of landing certificates with bond for alcohol destined for the United States, but that it is also certain that if such a system were adopted the alcohol in question would be shipped to the United States from Rotterdam, Hamburg or some other port.
Mr. Lebon said that at the present time the Belgian Government would do nothing which would deflect legal trade from the port of Antwerp. He repeated his contention that the exportation of the alcohol in question from Belgium is legal and that it is the importation of the alcohol into the United States in the way it is done that is illegal. Commander Thompson and Mr. Sussdorff contested the arguments advanced by Mr. Lebon strenuously along the lines of the statements and argumentation contained in Commander Thompson’s memorandum and in the instructions from the Department to the Embassy. It was quite obvious to Commander Thompson and to Mr. Sussdorff that the Belgian officials had made up their minds on their policy in advance.
Commander Thompson left Brussels for Paris on October 14 to consult with the Secretary of the Treasury, Mr. Morgenthau. He intends to return to Brussels in the near future, and the Embassy will continue to aid him in seeking to find a satisfactory solution of the alcohol smuggling question.
Respectfully yours,