639.5131/17
The Minister in the Dominican Republic (Schoenfeld) to the Secretary of State
[Received October 6.]
Sir: Referring to the Legation’s despatch No. 3521 of September 18, 1936,4 in relation to the Franco-Dominican Trade Agreement signed in Santo Domingo on September 4, 1936,5 and the uncertainty in the mind of the General Receiver of Dominican Customs as to whether the most-favored-nation treatment would be applied to certain American products equivalent to those enumerated in the above Agreement, by virtue of the American-Dominican Modus Vivendi of 1924,6 I have the honor to report that the matter was submitted by the General Receiver to the Secretary of State for the Treasury for a ruling in a communication dated September 21, 1936,4 a copy and translation of which are enclosed. There is transmitted herewith a copy, with translation, of a communication, dated September 29, 1936,4 addressed to the General Receiver by the Secretary of State for the Treasury, which has also been supplied to this Legation through the courtesy of the Receivership, replying to the General Receiver’s inquiry and stating that the benefits granted by the Franco-Dominican Trade Agreement are applicable, solely and exclusively, to the factory (trade) marks enumerated in the Agreement, or, specifically, to those indicated in paragraphs II, III (bis), IV, V, VI and VTI of the Receivership’s Internal Revenue Circular No. 154 of September 15, 1936, the only two available copies of which are enclosed (For a translation of the substance and an analysis of this circular, see enclosure to despatch No. 3521 of September 18, 1936).4
Under the Dominican Government’s ruling, the following groups of American products will apparently be denied the most-favored-nation treatment provided for in the American-Dominican Modus Vivendi of 1924, in respect of reduction of or exemption from so-called internal revenue taxes or imposts levied on imported merchandise, when entering the Dominican Republic: (1) vermouths [Page 410] and aperitifs; (2) cognacs and armagnacs; (3) perfumes, extracts, perfumed essence, perfumed powders; toilet soaps, shaving soaps and perfumed soaps in all the forms manufactured; (4) toilet and bath water, lotions for the hair and other uses, vinegars and aromatic salts; (5) dentifrices in general (paste, powder or liquid); (6) so-called beauty products such as: creams, cosmetics, face paint, pencils, rouges, brilliantine, depilatory products, preparations for the nails, etc.; pomades for the hair; essential oils for the manufacture of perfumes, soap, etc.; (7) pharmaceutical specialties; (8) medicinal and mineral waters; (9) preserved food, confectionery, bonbons, chocolate in tablet form and preserved food stuffs of meat, fish and vegetables.
As indicated in the Legation’s despatch No. 3521 of September 18, 1936, the action reported on the part of the Dominican Government would appear to be a departure from the most-favored-nation treatment stipulated to the United States and would apparently violate the spirit of the American-Dominican Modus Vivendi of 1924. The denial of most-favored-nation treatment to certain American products imported into the Dominican Republic, in such apparent violation of the Modus Vivendi of 1924, may warrant immediate representations to the Dominican Government in advance of actual cases of discrimination against American products. In this relation, the Receivership informs the Legation orally that, since it would be extremely difficult to obtain reimbursement for taxes paid once they were assessed and collected, it would doubtless save considerable difficulty, if our Government intends to insist on most-favored-nation treatment for American goods, to make its position in this matter known promptly to the Dominican Government.
That the matter is of some urgency will be observed from the visit the Legation received today from Mr. George W. Mitchell, representing the Plough Sales Corporation of Memphis, Tennessee, exporters of certain pharmaceutical specialties, who called for the purpose of making an oral protest against what he termed “the violation of the American-Dominican Modus Vivendi of 1924 by the Dominican Government” through its action in denying most-favored-nation treatment to American products similar to those granted preferential treatment under the Franco–Dominican Trade Agreement. Mr. Mitchell said that his principals were going to make a trial shipment of pharmaceutical specialties to the Dominican Republic within the next ten days and, if their products were not accorded the same rates of internal revenue taxes and imposts as similar French articles, a formal protest against this alleged discrimination against American products would be made.
Respectfully yours,
Secretary of Legation