The Ambassador in France (Straus) to the Secretary of State

No. 1645

Sir: Referring to the Department’s telegraphic instruction No. 47 of February 9, 3 p.m., 1935, 1 have the honor to transmit herewith a memorandum of a conversation which took place on February 15 between a member of the Embassy staff and a representative of the Ministry for Foreign Affairs with regard to the specific points raised in the Department’s telegram and the general subject of the French proposal for economic reforms in Morocco. Although there has been [Page 967] no opportunity to revise the memorandum, it is felt that it will prove fully self-explanatory concerning the situation as it exists at present.

In order to complete the memorandum there is enclosed the text of the pertinent portion46 of Sir John Simon’s note to the French Government reserving to Great Britain all treaty rights but consenting by derogation therefrom to the specific reforms under contemplation. Since this note was read to the Embassy with the understanding that it had not yet been made public, it would be appreciated if the text might be regarded as confidential and the British Embassy should not be informed that we are acquainted with its precise content.

Finally, I append a personal communication46 from M. Coursier of the Ministry for Foreign Affairs, dated February 15 but not received until the 19th, together with its enclosure, a memorandum concerning the general way in which the projected quota system may be expected to function. It may be observed that the Government of the United States would be given an opportunity to submit observations directed towards the framing of the quotas in such manner that their functioning might be as advantageous as possible to American commerce.

As indicated in the Embassy’s memorandum the French Government recognizes that we have certain very definite treaty rights. It is not attempting to discuss these rights nor to claim that there is any legal obligation upon us to submit to alteration thereof. What it asks is that quite aside from juridical considerations the Government of the United States consent, entirely as a matter of good will and while making full reservation with regard to its treaty position, to certain reforms in the economic system of Morocco which are deemed expedient to the normal development of Morocco.

I think there can be no doubt in any of our minds that it is unfortunate that, largely due to British insistence, a limited quota system should be envisaged as part of the economic plan. The best that can be said is that the French Government seems to be sincere in its desire to adapt the system so far as possible to American needs. If the Department should decide to accept in principle the projected economic reforms, it would appear possible through collaboration between French and American authorities to safeguard American imports into Morocco under the quota system. It is evident that the French authorities would welcome our observations on the subject and the Diplomatic Agency at Tangier together with the Consulate at Casablanca should be best fitted to advance pertinent recommendations, should the negotiations reach that point.

It seems to me worthy of consideration what our position will be in the event we do not consent to the reforms. Doubtless the reforms will [Page 968] be put into effect with or without approval since the other powers concerned are one by one withdrawing their objections. We should then be left as we were as concerns the Protectorate Treaty—a non-adhering power which could only continue to lodge protests and which would be forced into the invidious position of having been an obstacle to the reforms. I do not pretend to advocate the modifications any more than I am disposed to oppose them. It appears to me however that if they are inevitable, we might as well accept them with good grace and obtain credit for so doing, as well as secure a voice in the drafting of the quotas.

In this connection it may be appropriate to state that latterly the French Government has in several Franco-American commercial matters afforded instances of that good will which we have long preached to them is a prerequisite to better understanding. The most practical means of demonstrating to the French authorities that liberal gestures are worth while is to respond in kind. In consequence, without passing on the merits of the Moroccan proposals, I recommend that they be given at least sympathetic consideration.

Respectfully yours,

Jesse Isidor Straus
[Enclosure 1]

Memorandum by the Second Secretary of Embassy in France (Williamson)

On February 15 M. Coursier and M. Seydoux, representatives of the Ministry for Foreign Affairs, called upon me at my request to discuss at further length the French proposals for economic reforms in Morocco. I handed them an aide-mémoire containing the observations included in the Department’s telegraphic instruction No. 47 of February 9, 3 p.m. M. Coursier stated that he would prefer to regard the aide-mémoire as an informal memorandum connected with the negotiations rather than as a communication addressed to the Ministry for Foreign Affairs requiring an official response. In this way he will be able to furnish the Embassy with a personal reply which will not involve the two Governments in a controversy over technical points.

M. Coursier stated that, as we were informed on the occasion of our first meeting47 at the Foreign Office, the French Government hopes that the United States Government will not treat the French proposals from a juridical standpoint. In other words, it is desired that the proposals be considered outside of the framework of juridical rights. [Page 969] It is recognized that the United States has its thesis concerning American treaty rights and of course the French Government likewise has its thesis with regard thereto but if we were to enter into a protracted argument with regard to these rights no progress would be made. The French Government therefore hopes that while making any reservations which we may care to concerning our treaty rights, we may as a friendly gesture give favorable consideration to the French proposals entirely outside of our juridical position, in so doing taking account of the development in Morocco and the consequent need of a more flexible economic system.

It was such a course as advocated above that the British Government followed in accepting the French proposition. M. Coursier read to me an official note from Sir John Simon in reply to the French representations. The second part of the note contains the text of the French proposal which was accepted by the British, subject to certain modifications. In the preamble of the note the British Government took care to state that it was accepting the French project as a matter of friendship upon the distinct understanding that British treaty rights were not affected and that the acceptance only apply to the reforms at present visualized. I attach hereto the pertinent portions of the preamble to the British note48 in the belief that should our Government ultimately give favorable consideration to the French proposal, our juridical position may be conserved in much the manner employed by the British Government.

With regard to paragraph (1) of the Department’s instruction No. 47, M. Coursier stated that we are of course entitled to our thesis by which we maintain that the exchange of notes, and particularly that of January 2, 1917, from the Secretary of State to the French Ambassador in Washington,49 recognized only the French Protectorate in Morocco and did not include adherence to protective treaties or any modification to American treaty rights. He expressed the belief, however, that such considerations are not useful at this time since the French Government is not insisting that it has the right under the treaties to force us to accept the projected economic reforms, its stand being that quite aside from treaty rights it is asking us to consent to a much needed economic reform.

As to the second paragraph of the Department’s telegram, concerning whether it is obligatory for the French Government to consult us other than as a matter of courtesy with regard to the proposed augmentation in the Moroccan tariff, the French, as previously stated, would prefer to avoid a juridical argument. Nevertheless, in order [Page 970] to respond to the Department’s request for an explanation, M. Coursier sketched the situation as follows: Neither the American treaty with Morocco51 nor the treaty of Algéciras contains any clause fixing the tariff rates at the present 10%. The clause relative to tariff rates is included in the British treaty and our right to insist upon the status quo relative to present tariff rates arises only in virtue of the most-favored-nation clause of the American-Moroccan treaty. In consequence, if the British Government now consents to permit the augmentation of certain of the tariff rates it is not logical to suppose that our most-favored-nation clause affords us rights which the British Government no longer enjoys and of which they have made express derogation.

The Embassy did not fail to stress at length the inequities of the quota regime and it inquired if the French Government could not abandon that portion of its program. M. Coursier replied that personally he feels as we do about the quota system but that the British Government had insisted on the inclusion of certain quotas and that an agreement having been made on this point with Great Britain, the French Government is not in a position to abandon the six quotas envisaged. I then stated that while the quotas in question might be to the advantage of British trade, they were certainly badly chosen so far as concerns our trade in that they hit some of our outstanding exports, notably automobiles. I then read him excerpts from the despatch of the American Consul52 at Casa Blanca, dated February 8, enclosed with Mr. Blake’s despatch of February 9, 1935.53 In reading him these excerpts I explained that if the quotas were not based on favorable years for United States trade or if in certain instances all products of a given nature were lumped under one heading, United States trade would greatly suffer despite the circumstance that the quotas are theoretically applied without discrimination. It was further pointed out that if the quotas on given general classifications of products were broken down into separate tariff categories, the effect on American trade would be largely dependent upon how fairly the customs nomenclature corresponds with actual imports from the United States. Finally it was pointed out that the customs statistics themselves were oftentimes assembled in such way as not to give a fair picture of American imports into Morocco and that if customs statistics were taken as a basis for quotas, our trade would be strongly prejudiced as regards many items such as, to take a single example, batteries for automobiles.

[Page 971]

M. Coursier was much impressed with the exposé of the quota system as given by Consul Hopper and he remarked that it was a very able piece of work and threw an entirely new light on the matter. He said that of course the projected quota system is not in any sense aimed at American commerce and that therefore the desire of the French Government is to make its application as little onerous as possible to American interests. He thought that in conjunction with the Embassy and the Diplomatic Agency the quota system might be so worked out as to give due weight to the preservation of the American position. I subsequently asked M. Coursier, at the Ambassador’s request, to submit to the Embassy a preliminary sketch54 showing just how the quotas will function, including the manner in which the general classifications or chapters will be broken down into separate categories if such is the intention of the French Government. This he promised at once to do and after the sketch is received the American authorities concerned will be in a position to judge precisely how American trade will be affected and what changes in the proposed quota system must be recommended. M. Coursier expressed himself as desirous, in so far as possible, of adapting the quota system to our requirements.

With regard to page 3 of Consul Hopper’s report, item 2 under the tariff reforms, M. Coursier stated that the constitution of the Committee of Appeals had been radically altered in the agreement with the British from the manner outlined by the Consul and that it is thought the arrangement now envisaged is not only fair but provides advantageous facilities for appeal which will do away with the present autocratic handling of customs disputes by M. Serra, whose wings are apparently to be clipped.

Finally, in answer to my inquiry, M. Coursier explained with regard to the observations of Mr. Blake, contained in paragraphs (1) and (2) on page 3 of his despatch of February 9, that while quotas will be applied in the Spanish Zone and the Tangier Zone as well as the French Zone in Morocco, three distinct systems will be constituted so far as concerns licensing and customs statistics. In consequence the percentages of the American allocations applied in the French Zone will have no bearing whatsoever in the Spanish Zone, for example, where the allocations to individual countries will be made in conformity with the trade statistics of that particular zone. Thus, if we now have 90% of the automobile trade in the Spanish Zone, we should continue to enjoy 90% under the Spanish Zone quota system.

H[arold] L. W[illiamson]
[Page 972]
[Enclosure 2—Translation]

Memorandum Regarding the Mode of Application of the Quotas

The group designation of merchandise to be placed under quota, as it is given in the proposed customs reform for the Shereefian Protectorate, is merely a general nomenclature indicating divisions by chapters.

In the application, quotas would be fixed according to categories of manufacture, according to the schedules given in the official nomenclature of commercial statistics such as is published yearly.

Quotas would be fixed separately for each zone and might include similar or different types of merchandise, but they should be established according to uniform rules, that is, in accordance with statistics of the period chosen by common agreement.

Merchandise under quota might be shipped from one zone to another, providing the importers shall have obtained licenses in the manner provided for by the regulations.

Licenses would be granted for a period of six months within the limits of the quota apportioned among the exporting countries in proportion to their imports into Morocco of the merchandise under consideration during the period from 1928 to 1933. The Government of the Protectorate would have the power, in case of necessity, of carrying over unused licenses from the first to the second semester.

These rules, which form the basis of the quota system, are susceptible of such modification as may be justified by the suggestions or observations presented by the Powers concerned, in so far as the suggestions do not run counter to the principle of equality of treatment which characterizes the reform contemplated by the Protectorate.

  1. Not printed.
  2. Not printed.
  3. See telegram No. 42, January 15, 6 p.m., from the Ambassador in France, p. 955.
  4. Not printed.
  5. Foreign Relations, 1917, p. 1093.
  6. Treaty of Peace, signed at Meccanez, September 16, 1838, Hunter Miller (ed.), Treaties and Other International Acts of the United States of America, vol. 4, p. 33.
  7. George D. Hopper.
  8. Neither printed.
  9. Infra.