The Ambassador in Spain ( Bowers ) to the Secretary of State
[Received February 12.]
Sir: With reference to the Department’s cable No. 77, December 12, 5 p.m., 1935,18 I have the honor to enclose the copy and translation of a Note from the Foreign Office, dated January 25,19 which argues that the giving of exchange insurance only to those countries with whom Spain has a favorable trade balance does not constitute discrimination against the United States.
With reference to the present negotiations in Washington, the Note states:
“… if the commercial treaty, which is being concluded in Washington, is signed, the noticeable tariff reductions, which are given in the same in favor of some basic products of Spanish exportation, would permit that this exportation would increase so that it would have to react favorably in the normalization of the transfer of North American credits in Spain.”
In conclusion, the Note makes a suggestion regarding the possibility of establishing exchange insurance on an acceptable technical basis.