The Consul General at Warsaw ( Bevan ) to the Secretary of State
[Received July 27.]
Sir: I have the honor to refer to the memoranda from this Consulate General enclosed with the Embassy’s despatch No. 1504, February 13, 1937,40 in which it was stated that careful watch would be made for future infringements by the Polish authorities of the direct shipment clause of the American-Polish Treaty of Commerce dated June 15, 1931. In this connection, the Department will be interested in the enclosed photographs41 of import permits for American goods, all of which were issued after the Polish Foreign Office’s Note Verbale of February 9, 1937, disclaiming any intention to impose the direct shipment requirement, but all of which are nevertheless stamped with that requirement. As this office has previously maintained, despite [Page 548] the Foreign Office’s denials, the enclosures confirm a long-standing practice of the Ministry of Industry and Commerce, one moreover that the Foreign Office itself communicated to the Embassy by note verbale of October 23, 1933.42
The Consulate General has examined several other permits for American goods issued since February 9, 1937, and bearing the direct-shipment clause, but has either been unable to borrow them long enough for photographing or been refused permission to have them photographed.…
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With regard to the previously reported statement by an official of the Ministry of Industry and Commerce that import permits for shipments of small value would not be stamped with the direct shipment clause, an official of the section that actually issues the permits recently informed the Consulate General that permits for shipments of ordinary merchandise weighing less than 100 kilograms did not bear the clause in question. In this connection, the Consulate General recently examined an import permit for 15 kilograms of American leather which was not stamped with the clause.
The aspect of this entire matter that has most impressed this office is the unanimity with which importers other than of cotton regard the direct shipment clause with favor. Some even go so far as to oppose its abolition and in their cases the Consulate General has actually met with resistance in efforts to obtain information from them in the matter. One of their arguments is that it prevents inferior German goods from entering Poland under the guise of having been produced in the United States. All importers consulted in recent months have stated that they would ship direct whether the permit was so stamped or not, because the existing direct steamship facilities are adequate, besides being the cheapest in the end.
The second above-quoted official has informed the Consulate General that in practice permits are stamped with the clause because importers usually answer affirmatively the question in their applications as to whether they will ship direct or not, the latter consideration being confirmed by numerous importers in statements to this office. Still disregarding cotton, it may be added that the only requests to this office for the clause’s removal occurred a year or more ago and resulted from the failure of American exporters to comply with the Polish buyer’s specific instructions to ship direct.
With respect to raw cotton, that product is exempted from the requirement of an import permit. The quantity imported is regulated by autonomous quotas fixed by the Ministry of Industry and Commerce in consultation with the spinners, who are entrusted with the [Page 549] repartition of the quotas among themselves and clear their shipments on the basis of duty-reduction certificates issued by the Ministry of Finance. Although these certificates specify that in order to enjoy the reduced duty the cotton must enter Poland by sea, they do not preclude transshipment in any port outside the United States. This is the situation as gathered from importers and officials in recent months and confirmed today by a responsible official (Counsellor Rybicki) of the Ministry of Industry and Commerce.
In summary, therefore, it appears that American goods fall under two categories for the purpose in mind: (1) Raw cotton, national-defense goods and shipments of small value, and (2) all other articles. The first category may be transshipped at an intermediate port, while the second may not, although importers do not object thereto and either desire the requirement maintained or would ship direct in any case.