811.114 St. Pierre-Miquelon/465: Telegram

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

97. Your telegrams Nos. 234, 235 and 238, last dated February 18, 6 p.m. Treasury Department advises they have no substantial objection [Page 306] to first three proposed decrees. Regarding fourth decree Treasury points out that bulk alcohol commonly smuggled into United States from Europe via St. Pierre and otherwise usually has a trade name such as “Hand Brand”, “Swan Brand”, et cetera. Treasury fears that this proposed limitation would therefore not prove effectual against resumption of smuggling. They urge that either present bonding system be continued with respect to all exports of bulk alcohol of whatever origin from St. Pierre or that the importation of bulk alcohol, even though having a trade name, be controlled through a quota system or an import tax. Treasury assumes that words “having a trade name” in your telegram No. 238 apply equally to “alcohol” and “alcoholic beverages”. Is this correct?

Treasury advises further that it is common gossip in the underworld in this country that smuggling operations based on St. Pierre will soon be resumed and urges that no loop-hole be left through which bulk alcohol could lawfully be exported from St. Pierre.

For Gunsaulus’ views see Department’s instruction No. 18, October 28, 1936,40 and telegram No. 453, November 10, noon.41 He also stated in commenting on your telegram No. 1194, December 4, 5 p.m.,:42

“Believe the suggested provision to prohibit the exportation of all alcohols should be included if possible even though present decree to that effect has not proved entirely satisfactory; failing that either quota system or import tax on French alcohols such as rums and cognacs should be of assistance provided French authorities exercise strict control. There is a possibility, of course, that an import tax might further antagonize the people and cause smuggling. The above is based upon the assumption that present decree continue in effect, that the importation of all foreign alcohols would be prohibited and that the French Government would strictly enforce all decrees relating to alcohol.”

We greatly appreciate the earnest efforts which the French Government is apparently making to meet our wishes, as well as your own indefatigable labors in this regard.