651.116 Nitrate/83
The Ambassador in France (Straus) to the Secretary of State
[Received April 10.]
Sir: Referring to my telegram No. 152 of February 21, 12 a.m., 1935,42 I have the honor to transmit herewith, in copy and translation, [Page 246] a note from the Ministry for Foreign Affairs, dated March 28, 1935,43 in response to my representations directed towards maintaining a share in French imports of nitrate for American interests. As may be recalled the Embassy, acting under instructions from the Department, insisted that aside from other compelling considerations we are entitled to share in the issuance of licenses for the import of nitrate by virtue of the provisions of the Franco-American quota agreement of May 31, 1932. There appears to have been some sympathy in the Ministry for Foreign Affairs for the thesis of the American Government, but whatever opinion may have existed favorable to recognizing the bearing of the quota agreement upon the allocation of nitrate licenses was at length overruled and, as may be seen from the attached note,43 the American request is categorically rejected.
It is clear that the French Government was faced with a dilemma in which it was difficult if not impossible to accord to the United States participation in the small imports of nitrate called for during the present season. Instead of admitting our rights but asking indulgence until some satisfactory means might be worked out of making possible American imports, the French authorities have very obviously resorted to the unfortunate tactics of building up an elaborate but flimsy argument in rebuttal of our representations.
The French Government alleges inter alia: that the system of nitrate control is not parallel to the normal quotas envisaged by the 1932 agreement where allocations are made on the basis of previous imports; that if there were a parallel we would not enjoy an allotment under a system which came into effect in May, 1931;44 that it cannot admit that the most-favored-nation provisions of paragraph A of the quota agreement may be invoked concerning nitrate; that the word “restrictions” in that paragraph likewise has no bearing on the nitrate situation since “restrictions” was understood by the French negotiators to mean such conditions affecting importation as the requirement of marks of origin, etc.; that the nitrate system constitutes a monopoly; that the French Government is under prior commitment to Germany with regard to imports of synthetic nitrate; that while American nitrate producers did not sign the cartel agreement they are believed to be bound by confidential understandings with producers of other countries and that the cartel with the support of American producers forced upon France the commitment with Germany by the imposition of unacceptable prices in the French market; and finally that the French Government cannot admit that American producers may according to convenience attempt to impose high prices, request the maintenance of a free market or claim protection under the quota [Page 247] agreement. The French note ends in a conciliatory manner but with no definite promises for the future.
Respectfully yours,
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- See Foreign Relations, 1931, vol. ii, pp. 258 ff.↩