Memorandum by the Assistant Economic Adviser (Livesey)

Dr. Meyer called to inquire regarding the Treasury press release of June 4 regarding countervailing duties on certain imports from Germany.34

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He said the decision would practically stop trade with Germany. I told him that in correspondence this spring in Germany (the Embassy had not known of this correspondence) the German Government had said the same thing. The question had been very seriously considered here from all points of view and, as stated in the Treasury announcement, the Treasury decision was based on an opinion of the Attorney General.35 I had not seen this opinion and did not know what was in it. As to the Treasury decision, it listed certain commodities and said that official reports and other data in the files of the Treasury Department establish to its satisfaction that bounties and/or grants are paid and/or bestowed directly or indirectly on the export to the United States of these articles. So far the decision is notice that other articles are not subject to countervailing duties and presumably will not be, without thirty days’ notice of any subsequent decision.

Dr. Meyer said that nevertheless the decision would throw importers into uncertainty and practically stop trade. He said it was important to the Embassy to learn the extent of the decision, whether it extended to the bond and scrip procedure, registered marks and aski marks or only to some of them or to some only when used in combination with others. The bond and scrip procedure was perhaps more susceptible of attack as a bounty or grant than registered marks or aski marks. Germany got no great advantage from registered marks, which served merely to reduce German debt, and the use of which for exports yielded no foreign exchange to Germany—he thought that one of the articles listed in the Treasury decision (cotton and rayon gloves) was eligible only for registered mark assistance. He did not concede that any of the practices came within the spirit of the Act, which was directed against unfair trade. It might be that some of the procedures under some circumstances would not be within the effects of the decision. If so, it would be helpful to let the German Government, hard hit by the decision, know, and also to let importers know.

I told him that the Attorney General’s opinion might have dealt with broad questions of principle, either in general terms or with reference to the particular facts of the Treasury cases before him. I was not sure that it would be desirable or possible to evoke from the Treasury officials who are to be guided by the decision in its application to particular cases, any statement of general principle, nor what would be the Treasury policy as to publicity on such matters. Naturally there would be numerous inquiries concerning the decision. I thought the Embassy was well advised in making oral rather than formal inquiries at the present moment and I would endeavor to ascertain within the Department of State what the situation is.

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Dr. Meyer said he might have gone to Customs Commissioner Moyle, as he has frequently done on such matters, but Mr. Moyle has but recently returned from Europe. One of his assistants, Mr. Cart-wright? [sic], who had been very helpful in these matters, is ill. Mr. Johnson, head of the legal staff of the Bureau might not feel that he is authorized to discuss the decision.

I told Dr. Meyer I would put his request for information promptly before the Department and hoped to telephone him about it soon.

  1. The Treasury Department by its order (T. D. 48360) of June 4, 1936, gave notice that, pursuant to the provisions of section 303 of the Tariff Act of 1930, countervailing duties would be collected on certain goods from Germany after thirty days following publication of order (June 11, 1936).
  2. 38 Op. Atty. Gen. 489.