811.114 St. Pierre-Miquelon/460: Telegram

The Secretary of State to the Ambassador in France ( Bullitt )

85. Your 206, February 13, 6 p.m. We are glad that you have taken the matter up with Blum. In view of the past record of the Islands and the smuggling which has taken place even under the present decree, we believe it is not unreasonable to insist that the exportation of raw alcohol be prohibited or at least restricted. We would certainly regard any situation which might make possible the resumption of alcohol smuggling as a very serious matter.

In this connection the following message has been received from the Treasury Department:

“Secretary of the Treasury most vigorously protests any modification of present decree which would allow unrestricted importation and/or exportation of bulk alcohol (alcool de traite) at St. Pierre regardless of country of origin. Treasury calls attention to fact that by reason of prohibitive duties there is no legitimate market in this hemisphere which could be supplied with bulk alcohol from St. Pierre and that therefore any alcohol exported from St. Pierre is certain to be for smuggling trade. The Treasury gives it as its opinion that unless the French Government is willing to continue substantially the restrictions of the present decree prohibiting the exportation of all bulk alcohol from St. Pierre in vessels of less than 200 tons and prohibiting any exportation except under bond and landing-certificate provisions smuggling operations based upon St. Pierre are bound to be resumed. This will not only mean great loss of revenue to the United States but will necessitate the expense of a substantially increased enforcement effort.”

We wish you would convey the above message to Blum and inform him also that any resumption of smuggling operations from St. Pierre will completely nullify the favorable impressions created in this country by the action taken by the French Government which resulted in the promulgation of the present decree in May 1935.

Commander Thompson, Special Assistant to the Secretary of the Treasury, is sailing for Paris on Wednesday on another matter and you may wish to ask Blum to have final action postponed until you have had a chance to talk to Thompson, if you so desire.

For our information please telegraph whether the production and exportation of alcohol is a monopoly in France. What are the possibilities that bulk alcohol originating in France or French possessions might be imported into St. Pierre and freely exported thereafter?