611.5131/1087
The Ambassador in France (Straus) to the Secretary of State
[Received May 8.]
Sir: I have the honor to report that last Saturday, April 27th, Ambassador de Laboulaye lunched with me and we discussed the question of commercial treaty negotiations. I had previously, in reply to the Department’s telegram, No. 154 of April 26th, 1 [6] p.m., sent my telegram No. 368 of April 27th, 2 p.m.
M. de Laboulaye stated to me that since his arrival he had had several conferences with both M. Flandin and M. Laval13 regarding commercial treaty negotiations. He confirmed, in substance, Garreau-Dombasle’s telephonic communication to the Department as contained in the Department’s telegram of April 26th, 1 [6] p.m. The French Government is very anxious that negotiations should proceed as rapidly as possible, with open minds on both sides, according to the Ambassador who stressed the French Government’s desire that not too narrow a viewpoint, or, as he reported the Secretary to have said to him, not too horse-trading an attitude should be taken by either side. He reiterated what French officials have on various occasions stated to me directly, and what Consul Carter of Calais has repeatedly emphasized to me, that the Calais situation is one which is causing considerable concern and that the French Government would, above all things, welcome a reduction in lace duties on the part of the United States. The request has, I believe, been made that duty of 90% be reduced to 45%. The Calais situation, in so far as lack of markets is concerned, is serious. Assistance in its solution is one for which I believe the French Government would be inclined to give [Page 221] major concessions. The French Government also is hopeful that the United States will see fit to reduce the duties on French wines and champagnes. These appear to be France’s main desires.
Two years ago, prior to my leaving to take up my post, I was called upon by a representative of the lace manufacturers of the United States, who stated to me that the 90% ad valorem duty was not sufficient protection for the American lace industry in the United States in competition with Calais. If the facts as then stated to me are correct, cutting in half of the import duty would doubtless make impossible the sale of American machine-made laces in competition with Calais but, on inquiry of the representative of the Lace Manufacturers’ Association, in reply to my questions, he told me, to the best of my recollection, that the production in the United States of laces competitive with Calais ran to a figure of approximately $25,000,000 per annum and gave employment to approximately two thousand people. These figures, if correct, are not of sufficient magnitude to cause us any great worry at home. As stated above, the French Government seems to lay great stress on markets in the United States for Calais laces, of which the United States was in the past far and away the largest purchaser. If the United States were ready, under a policy of harmonious commercial treaty negotiations, to sacrifice if necessary the lace industry in the United States, it appears to me that the French Government would regard such procedure as a friendly gesture and might conceivably give in return more favorable treatment to American products than through any other sacrifice on our part. Ambassador de Laboulaye gave me the impression that the policy of sacrificing an industry for the sake of closer international comity and cooperation had been enunciated to him at a conference in the State Department, and intimated that the Administration held the view that perhaps the production of certain commodities and making possible their sale in the United States could well be left to those nations best equipped to produce them.
Ambassador de Laboulaye, who has long been an advocate of settlement of the French debts to the United States and who has on various occasions spoken to me of his desire to do his utmost to persuade the French Government to arrive at some settlement, stated that he believed that three successive steps were now possible: (1) the negotiation of the commercial treaty; (2) stabilization of currencies; and (3) settlement of debts. I suggested to him in turn that the negotiation of a commercial treaty and settlement of debts might well be taken up concurrently and that a plan that I had unofficially suggested first to M. Barthou14 and since to both MM. Flandin and Laval some [Page 222] months ago (see my despatches No. 1183 of September 4, 1934,15 and No. 1466 of December 21, 193416) might, though I said I had no authority to make any such suggestion, form the basis of a tender on the part of the French Government to the State Department. Ambassador de Laboulaye stressed the difficulty of arriving at a satisfactory commercial treaty unless stabilization of currencies had been previously achieved. I told him that I had no knowledge of the intentions of my Government as to stabilization, nor had I received any information or instructions, and that I was in no position to discuss that question. I received from Ambassador de Laboulaye the impression that the French Government might in the near future approach the Government of the United States with a suggestion that an effort at stabilization of currencies be made.
The Ambassador, when I suggested to him that the present policy and procedure of his Government in the matter of quotas is irksome and constantly productive of protests on the part of this Embassy, stated that he believed there would shortly be a declaration on the part of the French Government of a quota policy which would ameliorate conditions and would give satisfaction to us.
I have not telegraphed, as I stated I might in the last sentence of my No. 368 of April 27th, 2 p.m., because of the fact that in the negotiation of a commercial treaty I realize that considerable time will have to elapse, that hearings will have to be held, and that this despatch, which contains nothing of urgent importance to the Department, will suffice.
Respectfully yours,
- Pierre Btienne Flandin, French Premier, and Pierre Laval, Foreign Minister.↩
- Louis Barthou, French Minister for Foreign Affairs, 1934.↩
- Not printed.↩
- Foreign Relations, 1934, vol. i, p. 584.↩