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

No. 287

Sir: I have the honor to refer to my Despatch No. 269 of June 26, 1936 relating to customs discrimination against American goods entering [Page 950] Uruguay and to report a further development in connection with imports of sardines and tuna fish in oil into Uruguay.

On July 11, 1936 President Terra signed a decree, published in the Diario Oficial on July 27, 1936, granting equivalent treatment to imports of French sardines and tuna fish in oil. The following is the text of that decree:

“26–17436—It is hereby declared that sardines and tuna of French origin are entitled to the same benefits of customs treatment as is accorded the same merchandise of other origin, being included, therefore, in the exemption from payment of duties in gold.”

It will be observed that the decree does not mention the grounds for extending this privilege to French products. In view of the statements made to this Legation by the Foreign Office in paragraphs two and three of its note of June 23, 1936, a translation of which was forwarded as an enclosure to my Despatch No. 269, it appears that the Uruguayan Government holds that such privileges, arising from treaties, can be granted to third parties only through the granting of reciprocal or compensatory advantages by the third party to Uruguay.

I am unable to find any treaty provision between France and Uruguay which would justify the extension of this privilege to the former. It is possible that it is based on the secret provisions of one of the so-called “private banking arrangements” which the Department is aware exists between this and other countries.

In an effort to discover on what grounds this further privilege, adversely affecting American imports into Uruguay, is based, I have addressed a note to the Foreign Office and transmit as an enclosure hereto a copy thereof.

Respectfully yours,

Julius G. Lay

The American Minister ( Lay ) to the Uruguayan Minister for Foreign Affairs ( Espalter )

No. 70

Excellency: I have the honor to refer to Your Excellency’s note dated June 23, 1936 concerning preferential treatment accorded by Uruguay to sardines and tuna fish in oil from Spain, and to a decree signed on July 11, 1936 and published in the Diario Oficial on July 17, 1936 granting equality of treatment to such imports from France.

In this connection I desire to refer to certain statements made in the second and third paragraphs of Your Excellency’s note referred to previously, i. e. “The present customs procedure applied to this [Page 951] class of imports derives as is well known, from the commercial agreements signed with Brazil and with Spain. In both cases the contracting governments have granted each other reciprocal or compensatory advantages. For this reason, for the present at least, equality of treatment cannot be offered for similar United States products.”

Since it appears, therefore, that Your Excellency’s Government bases equality of treatment on the existence of treaty provisions to that effect, and since the decree of July 11, 1936 does not set forth the grounds on which the preferential treatment was extended to imports of sardines and tuna fish in oil from France, I respectfully request that Your Excellency inform this Legation of the treaty provision under which exemption from payment of the duties in gold was extended to such French products.

I avail myself [etc.]

Julius G. Lay