821.5151/289: Telegram

The Secretary of State to the Minister in Colombia (Dawson)

46. Your No. 83 of June 19.19 You may, in your discretion, observe to the appropriate officials of the Colombian Government that although this Government does not ask special consideration for American bidders if their prices are not competitive, it does ask that American exporters shall have the opportunity to compete on equal terms for business with other foreign nationals. In this case, it would seem that the lower prices quoted by the German firm are artificially made possible through the operation of special exchange agreements and restrictive exchange control systems which are not practiced by this country, either to favor its exporters, or against the trade of other countries. It is the Department’s belief that the system of exchange control and the restrictive exchange agreements which have grown out of them are responsible in a large degree for the continuance of the depression in world trade.

In addition, if it were the condition that the bids in this instance be made in Colombian pesos, as the Department understands from your despatch, then acceptance of the German bid, which would preferentially guarantee the bidder against exchange risks, would be discriminatory.

Incidents, such as the bid in question have created resentment among American exporters who feel that they are losing business and suffering discrimination as a result of the operation of special exchange agreements and restrictive exchange control systems from which their own Government abstains. The Department would like to have you present this point of view of the potentially injurious effects of these practices and their bearing on the American policy of liberal trade to the Colombian authorities when appropriate occasions are afforded.

  1. Not printed.