662.9131/25
The Chargé in Iran ( Merriam ) to the Secretary of State
[Received January 11, 1937.]
Sir: I have the honor to refer to the Legation’s despatch No. 737 of March 6, 1936, and to the Department’s instruction No. 233 of July 20, 1936, with reference to the apparent discrimination against United States trade with Iran which arises from Article 17 of the Irano-German Convention of October 30, 1935.
Communication of the Department’s views was delayed for a certain time, partly in view of the somewhat strained state of existing relations. It was thought that when the Irano-German Convention was published by the Iranian Government, it might be found that at the time of ratification alterations were made which would take into account the discrimination to which attention had already been called by communications from the British and a few other Legations. However, the Convention has not yet appeared in any official publication, and communication of our views for the reason mentioned can scarcely be postponed any longer.
A more recent consideration has been the new situation arising from the law of November 8, 1936, which made certain changes with regard to the issuance of export certificates and import permits, which were in effect favorable to American trade. The question arose whether sufficient practical discrimination remained to justify a communication.
An exchange of memoranda has recently taken place between the Legation and the Consulate for the purpose of clarifying this point, from which it would appear that while the more obvious price disadvantages incurred by American goods as compared with German goods seem to be largely offset in one way or another, the complicated procedure and the delays and deposits required with respect to American goods in connection with the necessity of obtaining import [Page 400] permits are still substantial. Accordingly, a communication in the sense of the Department’s instruction is being communicated to the Iranian Foreign Minister. A copy is enclosed herewith.
There are also enclosed herewith copies of the memoranda42 to which reference has been made.
According to the Commercial Secretary at the British Legation, the replies received to the communication of several Legations calling attention to the apparent discrimination arising from Article 17 are to the effect that there is no discrimination because Iran is prepared to enter into similar agreements with other countries. The British Legation referred the question of entering upon negotiations for a clearing convention to the Foreign Office. According to the same source, Czechoslovakia is definitely uninterested in such an agreement. Czech heavy industry is busy with armament orders, and if Iran does not wish to trade except on a compensation basis there are ample markets elsewhere.
Respectfully yours,
- Neither printed.↩