The Minister in Uruguay ( Lay ) to the Secretary of State

No. 190

Sir: I have the honor to acknowledge the receipt of the Department’s Instruction No. 54 of February 12, 1936, concerning Uruguayan customs discrimination on certain American products, with which was enclosed a draft of a note for submission to the Foreign Office.

It is observed that this note embodies an implied protest against privileges granted by a recent treaty to Brazilian pine lumber over similar American lumber. In informal discussions with the Foreign Office, I have ascertained that local authorities interpret that treaty provision as coming within the category of privileges to limitrophe countries since it specifies “lumber from Brazil entering Uruguay by land or river ports”, specifically excepting imports through maritime ports. They hold that such privileges constitute recognized exceptions to the application of the most-favored-nation principle whether embodied in a treaty or followed as a simple principle of international commercial intercourse.

In view of the fact that the United States Government has maintained that limitrophe countries may in certain cases be accorded special treaties with third parties embodying the most-favored-nation clause, I believe that the case of the American Government might be weakened by the inclusion of the question of treatment of Brazilian pine with those others forming the basis of representations in the draft note. I therefore respectfully request that the elimination of that question be considered by the Department and that I be instructed accordingly.

With reference to the last paragraph of the Department’s instruction, I have to report that investigations are now being made concerning differences in valuation and market prices of Brazilian and American hardwoods, the results of which will be transmitted to the Department as soon as obtained.

Respectfully yours,

Julius G. Lay