660C.116/177
The Ambassador in Poland (Cudahy) to the Secretary of
State
No. 889
Warsaw, October 30, 1935.
[Received
November 15.]
Sir: With reference to my telegram No. 94,
October 29, 1935,18
I have the honor to enclose herewith a copy of a communication from
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the Ministry of
Foreign Affairs under date of October 28, 1935,21 with its two enclosures;
the Polish text and a translation into English, made at the Foreign
Office, of a memorandum in which the Polish Government discusses the
several matters which were presented for its consideration in the
Embassy’s note of June 5, 1935,22 a copy of which was
transmitted with despatch No. 726, June 5, 1935. There also is
enclosed a translation of the Ministry’s communication of October
28, 1935, and a translation prepared by the Embassy of the Polish
text of the memorandum which accompanied that communication.
[Here follows a summary of the memorandum from the Polish
Government.]
The paragraph which begins at the bottom of Page 7 in enclosure No.
323 to this despatch contains one ambiguity
and one misstatement of fact. When the Polish Government states that
compensation fees are voluntarily fixed at
various levels by autonomous economic organizations it seems to mean
that these fees are fixed by these organizations (such as the
Compensation Society) themselves rather than by the Government. The
only possible translation of the Polish word which is employed in
the sentence under reference is voluntarily.
The final sentence in the paragraph would be accurate and complete if
it were qualified by a statement similar to the one with which there
is concluded the paragraph on Page 8 which immediately follows it.
The sentence under reference beginning in the fourth line of Page 8
then would read somewhat as follows:
“Such fees, of a character similar to other fees collected by
various other countries during the period of crisis, are
imposed in the above-mentioned manner on certain commodities
regardless of their country of origin and the country from
which they arrive, provided the state of Poland’s balance of
trade with those countries is similar to the trade balance
existing between Poland and the United States.”
The status of the trade balance between Poland and a
given country determines, of course, the treatment that is accorded
in Poland to imports from that country.
On Page 3 of enclosure No. 3,24 there appears the statement that bilateral
agreements have become to a marked degree the main instrument of
economic collaboration between Poland and foreign states. Requested
by the Embassy to cite examples of the bilateral agreements which
the Polish Government had in mind when this paragraph of the
memorandum was drafted, Mr. Wiktor Podoski, Chief of the
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Anglo-Saxon Section of the
Foreign Office, stated that his Government had in mind such
bilateral agreements as its Tariff Protocol of June 30, 1934, with
Finland;25 the
Customs Agreement between Poland and the Soviet Union signed June
22, 1934 (transmitted with despatch No. 785, August 2, 1935,26); the Tariff
Protocol between Poland and Norway of January 8, 1935 (transmitted
with despatch No. 870, October 17, 193526); the Anglo-Polish Trade
Agreement of February 27, 193527 (transmitted with despatch No. 799, August 14,
1935,26 and the
subject of other despatches from this Embassy); and the
Polish-Canadian Trade Convention of July 3, 1935,28 which has not as
yet been published in Poland.
I am of the opinion that the Polish Government’s reply to our note of
June 5, 1935, is as satisfactory a statement as can be obtained. The
reply accepts in principle the thesis of the American Government,
pleads that Poland in self-defense has been compelled to resort to
certain restrictive measures, but stresses that these measures have
been drawn up with a view to causing as little interference as
possible with the free movement of trade. In denying that its
defensive restrictive measures are “in disaccord with” application
of the most-favored-nation clause the Polish Government is restating
an interpretation of the application of that clause to which it is
firmly committed.
The reference in my telegram No. 87, October 13, 1935,26 to the possible effect on
the Polish Government’s reply to our representations of the
appointment of General Górecki as Minister of Industry and Commerce
was made after Mr. Rose of my staff had been informed by Prince
Lubomirski of the Anglo-Saxon Section of the Foreign Office that his
Government’s reply to our note of June 5, 1935, then was being
drafted and was partially completed. The Embassy has subsequently
been informed by Mr. Podoski that the Polish Government’s note was
in fact only recently completed but that the memorandum which
contains the formal statement of its position was completed in
September last after several officers of the Ministry of Industry
and Commerce, among them Mr. Witold Wankowicz, former Commercial
Counselor of the Polish Embassy in Washington, had worked on it;
that the original of the memorandum was signed by Mr. Franciszek
Doleżal, Under Secretary of State in the Ministry of Industry and
Commerce; and that Mr. Henryk Floyar-Rajchman, Minister of Industry
and Commerce in the Sławek Cabinet, held it up for fully a month. As
a matter of fact, said Mr. Podoski, the memorandum was not released
until General Górecki took over that Ministry. It
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then was sent to the Foreign Office
without change. Mr. Podoski, who also seems to have had a part in
drafting the memorandum, expressed to the Embassy his hope and his
belief that the American Government would find it satisfactory.
Mr. Podoski added that preparation by the Foreign Office of an
English translation of the memorandum is a distinct innovation. He
said that there seemed to be no particular point in making a
translation from Polish into French when he understood that the
Embassy would have to put the French into English. He was unable to
say whether the Foreign Office plans to make it a practice to
transmit to the Embassy Polish texts accompanied by translations
into English.
With reference to despatch No. 750, July 1, 1935, I may add that the
Embassy was not invited by Mr. Doleżal or any other Polish official
to discuss further the treatment accorded in Poland to American
goods.
Respectfully yours,
[Enclosure—Memorandum—Translation]
The Polish Ministry for
Foreign Affairs to the American
Embassy
In reply to note No. 173 of the United States Embassy of June
5th, and following upon its own note of March 16th,
No.P.II.SZ.57/20/35, the Polish Government wishes to state that
it has given careful consideration to the views regarding the
general principles of international trade policies expressed in
the Embassy’s note under reference and has given its thought and
attention to the several problems mentioned therein.
The Polish Government in the first place has the honor to state
with satisfaction that the views of the two Governments are in
their main outlines in accord on the question of the main
principles which should form the basis of policy in
international trade.
The Polish Government has on several occasions given expression
to its views in this matter, both in the international forum and
in its measures in economic policy and autonomous legislation.
It has on several occasions expressed its entire readiness to
participate in international collaboration in the political and
economic field on principles analogous to those expressed in the
United States Embassy’s note of June 5th. As examples may serve
its participation in the International Economic Conference in
Geneva in 1927;30 in three sessions
of the International Conference concerning the suppression of
prohibitions and limitations of imports and exports in Geneva
and Paris in 1927–1929;31 further in the International
Conference concerning
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the status of foreigners held in Paris in 1929; in the
International Conference on the question of a customs truce, in
Geneva in 1930;32 in the
International Conference convened to deliberate upon the
question of the settlement of economic problems in the Danube
basin, in Geneva, Stresa, and Rome, 1931–1932;33 in
the World Economic and Monetary Conference in London in
1933;34 the Gold Bloc Conference in
193435 and in the Union of
Agricultural States of Central and North-Eastern Europe.
Moreover, during the last session of the Assembly of the League
of Nations, at the meeting of the Economic Committee, Professor
W. Zawadzki, at the time Polish Minister of Finance, presiding
over the Committee, speaking as Polish delegate, advanced well
known suggestions concerning the liberalization of international
commercial methods. His suggestions met with the approval of the
United States Government, which found expression in the message
of the Secretary of State, Mr. Cordell Hull, to the President of
the Economic Committee, Prof. Zawadzki.
The Polish Government has in general given its support to all
efforts to remove artificial restrictions which hamper commerce.
It has opposed, above all, currency restrictions which exercise
a completely paralyzing influence on trade. It has endeavored,
moreover, to create, wherever circumstances have permitted, a
state of affairs which would be as close as possible to a state
free of all restrictions concerning goods or currency. Numerous
failures attendant on the efforts to accomplish this by way of
multilateral agreements and understandings naturally focussed
the attention of the Polish Government in the first place on
international bilateral agreements which for this reason became
to a marked degree the main instrument of economic collaboration
between Poland and foreign states.
It seems in order here to mention that the highly protectionist
policy of recent years conducted by the United States, reflected
above all in the new Tariff Act of 1930,36 brought about an immediate and powerful reaction
among a whole series of states, and contributed to the general
increase of barriers placed by individual countries in the way
of international trade. The United States Tariff Act of 1930
introduced extremely high, in some cases prohibitive, tariff
rates, and gave furthermore to the President of the United
States the power to increase, in a large number of cases, the
already considerable tariff rates. The application by the United
States, in its discretion, of countervailing duties and
antidumping duties obviously is a vivid example of
discrimination, affecting Poland among others (matches, ammonium
sulphate).
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The recently apparent tendency of the United States to make its
foreign commercial policy more liberal, a policy which affected
first and foremost debtor countries and countries importing raw
materials from America, justifies the hope that it will soon be
possible to attempt in a more practical manner to loosen the
artificial bonds which at present fetter international trade
turnover.
Polish commercial agreements with foreign countries are in
principle based on the most favored nation clause which
determines Poland’s attitude towards the states with which it
has entered into treaties and commercial agreements.
This also is its attitude vis-à-vis the United States.
Numerous restrictions, however, concerning goods, currency,
emigration, and sanitary regulations, applied by various
countries to their commercial intercourse with other states,
have brought about the necessity for Poland, a deflationist
country with a stable currency and free of currency
restrictions, to have recourse to a defensive measure, viz.: a
system of prohibition on the import of goods from abroad.
This system possesses, however, the elasticity necessary to
permit it to adapt itself on the one hand to the conditions of
economic cooperation existing between individual states, and on
the other hand to eliminate by agreements and on the basis of
reciprocity, barriers placed in the way of international trade.
It aims at creating by means of bilateral agreements between
Poland and each country, a condition of affairs as close as
possible to a state of free exchange of goods, capital, and
people.
The methods adopted in particular circumstances within the system
thus outlined differ from one another in the natural course of
things. They are not, however, in disaccord with the basic
principle of applying the most favored nation clause to treaty
countries in those fields in which the clause is operative and
to the extent to which it is universally accepted. Neither does
this mean that some countries enjoy preferential treatment while
other countries are subject to unfavorable discrimination. On
the contrary, this creates a state of affairs in which, together
with the existence of an effective means of defense, there
remains the full possibility of applying to foreign countries
the policy mentioned in point 3 of the note of the United
States, namely a policy of respectful and friendly approach to
all countries to cooperate in establishing equality of trade
opportunity and treatment throughout the world.
The principle outlined in point 4 of the United States’ note,
that the commercial balance between two countries should not
constitute a basis for the application of various facilities in
their international commercial relations, would indeed be sound
were it not for the
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existence of numerous restrictions, monetary and other, but more
especially those on the circulation of capital and goods, which
form an obstacle to the free growth of international commercial
relations and constitute a hindrance to the normal development
of business. This is exemplified above all in the abnormal
structure of trade balances. The influence of such a state of
affairs profoundly affects the balances of payments and
therefore necessitates correction along the lines set forth
above. In particular, in regard to relations existing between
creditor and debtor states, the possibility given to the latter
of creating through the exchange of goods an opportunity of
executing their financial obligations would appear to be a
natural solution and a matter of primary importance.
Referring to point 7 and the subsequent paragraphs of the United
States Embassy’s note of June 5th, in which the Embassy requests
that it be informed in detail concerning the conditions under
which American products can be imported into Poland, the Polish
Government wishes to state that upon registration of import
licenses, minor fees are imposed by the autonomous economic
organizations on certain items of American imports into Poland,
these fees being imposed in their favor and within the scope of
their branch activities. The fees are voluntarily fixed by these
organizations at various levels. Such fees, of a character
similar to other fees collected by various other countries
during the period of crisis, are imposed in the above mentioned
manner on certain commodities regardless of their country of
origin and the country from which they arrive.
In the field of contingents Poland, having no contingent
agreement with the United States, nevertheless permits the
import of goods from the United States in accordance with
economic necessities, and under conditions identical to those
under which such licenses are issued for goods coming from third
countries with which the state of the exchange of goods is
similar to the one existing between Poland and the United
States.
The road toward the removal of the difficulties as well as the
barriers and obstacles which under such circumstances may arise
between two countries lies, in the opinion of the Polish
Government, in bilateral conversations between such states. The
best remedy seems to be an elucidation of the position as far as
the facts of the case are concerned, the setting forth of the
needs of each party, the review of the economic and political
possibilities which each party has at its disposition, and
finally the establishment of a basis for future collaboration by
means of bilateral agreements. Should, therefore, the United
States Government consider necessary, in addition to the
explanations contained in the present note, a further
elucidation of matters appertaining to the mutual exchange of
goods, and should the
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United States Government deem necessary the settlement of any of
these questions, the Polish Government would consider this to be
attainable through conversations between the two
Governments.
[Warsaw, October 28,
1935.]
