Foreign Relations of the United States Diplomatic Papers, 1936, The American Republics, Volume V

611.1731/147: Telegram

The Secretary of State to the Minister in Nicaragua (Lane)

Washington, February 7, 1936—2 p.m.

6. Your telegrams Nos. 6 and 7 of January 25, noon, and January 25, 3 p.m., respectively.

1. We agree with you that the proposed change is undesirable.

2. No comment necessary.

3. We prefer to retain clause cited, which merely establishes certain customs administrative requirements. Monetary or exchange policy is not within its scope.

4. Insertion agreed to but prefer “security” in place of “safety”.

5. There seems to be a confusion of ideas on this point. The proposed insertion would enable Nicaragua to impose a quota on any product in Schedule I as a substitute for regulation of imports by means of exchange control; hence it would tend to render the article valueless as a protection against quotas. Article IX does not require the abolition nor even the liberalization of exchange control; it provides only that the control be administered in a non-discriminatory manner.

6. No comment necessary.

7. Omission proposed would practically nullify the intent of this paragraph which is designed to cover cases where a country, by means of import licenses or permits restricts importations without announcing amount of global or country quotas. The 3-month minimum period is provided for to prevent abuses such as clandestine discrimination and failure to allow adequate time for the despatch of shipments. Nicaragua’s objection would seem to be irrelevant.

8. The Department agrees with your recommendation.

9. The Department is studying this situation and recommends that the Legation assemble data on which a decision can later be based.

10. The Spanish translation proposed by the Department is included in the Honduran agreement, hence the Department does not see why the English text cannot be more closely adhered to. It is difficult to specify limits for such fines since they often vary in accordance with the value of the shipment.

11a. The Trade Agreements Act¹⁴ provides that all agreements concluded pursuant to it must be subject to termination at the end of not more than 3 years from the date on which such agreements come into force.

11b. The proposed addition seems undesirable, but the Department will be glad to receive further information from Nicaragua as to the value it attaches to the proposed provision.

What is present Nicaraguan attitude toward a concession on sugar in the trade agreement?

Hull

14. Approved June 12, 1934; 48 Stat. 943.