The Ambassador in Peru (Dearing) to the Secretary of State
[Received January 28.]
Sir: I have the honor to acknowledge receipt of the Department’s telegram No. 4 of January 21, 7 p.m. requesting information by airmail regarding the discriminatory treatment resulting from the decree of January 8th, 1936, which was reported in the Embassy’s telegram No. 4 of January 14, 1936, 10  a.m. and in the Embassy’s airmail despatch No. 4372 of January 15, 1936.22
The Embassy has not heard of any direct evidence that the British Government urged discriminatory action in the negotiations to obtain the preferential treatment accorded in the decree referred to. However, in this connection, I desire to call particular attention to the Embassy’s telegram No. 6 of January 18, 1935,23 regarding the Foreign [Page 910] Minister’s warning that Peru would in all likelihood soon have to grant to Great Britain either advantageous quotas or tariff concessions, since Great Britain imports four times as much from Peru as she sells to Peru and Peru could not risk losing the British market upon which she is so dependent. The negotiations between Peru and Great Britain, which have been taking place in London, have been going on for over a year. Although the new Peruvian Customs Tariff had been ready for months, it was generally known that the enforcement of the new schedule was being delayed until the negotiations for the commercial agreement with Great Britain were concluded, as mentioned in the Embassy’s despatch No. 4184 of October 2, 1935,25 page 3. The new tariff schedule enters into effect on February 1, 1936 in accordance with a decree of January 8, 1936, as was reported in the Embassy’s despatch No. 4359 of January 10, 1936,26 with which a copy of the new tariff schedule was enclosed.
It is worthy of note that the two decrees mentioned in this despatch were issued on the same date and that the one giving preference to British textiles has not been printed or even mentioned in the local newspapers.
With regard to the second question in the Department’s telegram as to whether it is likely that the concessions accorded to Great Britain will be extended to the United States, in view of the Foreign Minister’s warning of January 18, 1935, mentioned above, there is no reason to believe that these special concessions will be extended to the United States. The prospects are just the reverse. From external evidence it is likely that England will maintain these preferential advantages in compensation for concessions to Peruvian exports to the British market.
In answer to the third question in the Department’s telegram copies of the text and a translation of the decree of January 8, 1936 were forwarded to the Department with the Embassy’s despatch No. 4372 of January 15, 1936.26
The long drawn out negotiations for the commercial agreement between Great Britain and Peru, which the Embassy has followed as far as the confidential nature of those negotiations have permitted, leads this Embassy to believe that England may be enabled to secure and maintain preferential treatment on a series of articles in the Peruvian market in exchange for assurance that an equitable part of the Peruvian sugar crop will be assured a more or less permanent outlet in the British Isles. The problem of marketing its sugar is paramount to Peru. In this connection the Department’s attention is called to the Embassy’s telegram No. 99 of August 28th, 10  [Page 911] p.m., 1935,27 and despatches Nos. 4176 of September 29, 1935, 4183 of October 2, 1935, 4184 of October 2, 1935, 4326 of December 20, 193528 and 4360 of January 10, 1936.29