654.116 Lard/18
The Minister in Switzerland (Wilson) to the Secretary of
State
No. 4592
Bern, September 22, 1936.
[Received
September 29.]
Sir: I have the honor to refer to the
Department’s instruction No. 3660 of August 7, 1936, regarding the
measures taken by the Swiss Government in connection with the
importation of lard, and to the Legation’s despatch No. 4534, of August
19, 1936, with which was enclosed a copy of an informal letter to Dr.
Stucki, setting forth the Department’s point of view in the
premises.
The Legation has now received a reply from Dr. Stucki, dated September
19th, in which he sets forth at considerable length the attitude of the
Swiss Government in the matter.
While Dr. Stucki takes issue with the point of view expressed by the
Department as regards the legality of the measures adopted, it is felt
that the detailed explanations furnished by him as a result of the
Legation’s informal representations may be helpful to the Department in
determining its attitude in any review of the question which may become
necessary in the future.
There is also enclosed a copy of my acknowledgment18 of Dr. Stucki’s note in which
I stated that his explanations would be submitted
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to the Department of State for use in any
review it may care to make of the question.
Respectfully yours,
For the Minister:
Donald F.
Bigelow
Secretary of
Legation
[Enclosure—Translation]
The Delegate of the Swiss Federal Council for
Foreign Trade (Stucki) to the American
Chargé (Bigelow)
Bern, September 19, 1936.
Mr. Chargé d’Affaires: In your note of
August 19th last, you were good enough to call my attention to
certain measures taken by the Swiss Government with a view to
controlling the importation of lard. You added that the Department
of State considered these measures to be in violation of commitments
undertaken by the Swiss Government in the commercial agreement of
January 9, 1936, with respect (1) to the method employed in the
granting of import permits for lard and (2) the levying of an
elastic contingent allotment license fee for such imports.
After having conscientiously studied this matter, I have the honor to
reply as follows:
- 1.
- The importation of lard into Switzerland was restricted by
the decree of the Federal Council No. 33, of April 27, 1934,
concerning the limitation of imports. It is precisely
because of this fact that the American Government had
formulated, in its first list of desiderata for the
commercial negotiations, the request for the abolition of
the quota. Since the American Government has been aware
since 1934 of the existence of this restriction, it could
not invoke against it paragraph 2 of Article VII of the
agreement, which refers to new quotas.
- 2.
- The American authority who, according to your note, refers
to paragraph 2 of Article VII, as well as to the note ad 95
of Part B of the commercial agreement, does not seem to be
entirely familiar with the history of the stipulation
regarding lard and with the formal declarations made in this
regard by Switzerland. Although you may be aware of these
declarations and they must be known also to the competent
authorities at Washington, I desire to recall that in the
course of the negotiations the Swiss Delegation constantly
stressed the fact that, in view of the precarious situation
of Swiss agriculture and Switzerland’s domestic policy, the
Federal Council could not undertake a commitment for the
importation of even small quantities of lard in the near
future. It agreed to the inclusion in the agreement of the
stipulations relative to lard only on the insistence of the
American Delegation, which attached great importance to the
stipulation in question—if only for visual effect! In order
to avoid any future misunderstanding,
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the Swiss Government confirmed
in writing that the competent authorities could, until
further instructions, grant import permits for very limited
quantities only (note from the Swiss Legation at Washington
to Mr. Hull, Secretary of State, of January 9, 1936, which
Mr. Hull acknowledged the same day19).
- 3.
- In spite of this formal declaration, the federal
authorities have endeavored to devise means to be agreeable
to the Government of the United States. In a note of May
27th last20
addressed to your predecessor, Mr. Hawks, the Director of
the Division of Commerce took pleasure in bringing to his
attention the happy results of these efforts. If it has been
possible to achieve these results, it is due only to the
measures against which objection is raised in your
note.
- 4.
- According to that note, the American authorities seem to
consider that the practice of making the grant of import
permits dependent on Swiss exports of livestock is
inconsistent with the undertaking of the Federal Government.
I venture to reply that I am unable to share this view. This
is a condition imposed long before the conclusion of the
commercial agreement and which has not been abrogated by the
latter. It does not, furthermore, exist at present (see
paragraph 6 below).
- 5.
- The same applies to the “lard tax” or “license fee”
mentioned on page 2 of your note (see also paragraph 6
below). Contrary to the view expressed in your note, there
was no question of an import tax in the sense of the
provisions of Article 1 of the commercial agreement, but
simply of a contribution by which the importer of lard might
be relieved of the obligation to export, to any country,
livestock or livestock products, mentioned in paragraph 4
above. The body entrusted with the levying of this
contribution then undertook the exportation in lieu of the
importer of lard. The clearing of the domestic market
resulting from these exports made it possible to be more
liberal in the granting of import authorizations for
lard.
- 6.
- In the meantime, the method described in paragraphs 4 and
5 has been replaced by the centralization of lard
importation in a single office. There results therefore a
monopoly in fact in the sense of Article VIII of the
commercial agreement of January 9, 1936. This article
obligates Switzerland to give to the other country fair and
just treatment, in so far as concerns purchases made by the
office vested with the monopoly. It goes without saying that
the competent Swiss authorities will take pains to see that
this provision, as well as the stipulation under the number
95 of Part B of the commercial agreement relative to the
purchase from the United States of 90% of total lard
imports, shall be strictly observed by the office above
mentioned.
- 7.
- In summarizing the foregoing, I desire to point out once
again that the measures taken by the federal authorities are
not contrary to the commitments undertaken in the commercial
agreement. Furthermore, far from impeding the importation of
lard, they make possible purchases which, without them,
would be absolutely impossible—in view of our agricultural
situation and of our domestic policy—and
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which the American Government
could not expect in face of the Swiss declarations made
during the negotiations and confirmed in writing on the very
day the commercial agreement was signed.
The measures taken, it is true, are looked upon with dissatisfaction
by certain Swiss importers, who, in their thought of profit and
ignoring the declarations referred to above, see only their
immediate interests without taking into account the disastrous
effects which, in the circumstances described, the realization of
their desires would have on the importation of American lard.
I venture to hope that, in the light of the explanations you will
submit, the American Government will recognize the entire good faith
with which Switzerland has acted in this matter and the legality of
the measures taken from the point of view of the commercial
agreement, and particularly articles I, VII, and VIII. I trust that
it will appreciate furthermore that the interest of certain Swiss
importers of lard, opposed to the provisions in force, is absolutely
incompatible with the well-understood interest of American exporters
wishing to maintain and even increase their lard exports to
Switzerland.
Please accept [etc.]
