The Ambassador in Poland ( Biddle ) to the Secretary of State

No. 260

Sir: With reference to the Department’s instruction No. 19 of July 19, 1937 concerning the direct shipment requirement on American goods imported into Poland, I have the honor to report that the following information in the premises has been obtained through informal discussions with the competent officials of the Polish Foreign Office and discreet inquiries in other interested circles:

The Foreign Office definitely regards the application, with or without subsequent cancellation, by officials of the Ministry of Industry and Commerce of the direct shipment requirement on imports of American goods as in contradiction to the applicable provisions of the American-Polish Treaty of Friendship, Commerce and Consular Eights and has endeavored unsuccessfully to persuade the Ministry to abandon its practice of endorsing by a rubber stamp such a requirement on import permits covering American goods.
The Ministry of Industry and Commerce apparently bases its refusal to accept and act upon the Foreign Office’s views in the matter on the assertion that the policy and obligations of the Ministry necessitate the endorsement of the requirement on all import permits issued covering goods of American origin. It is understood that the Ministry was compelled some time ago “by heavy pressure from two sources” to apply informally the requirement to American imports. The two sources exercising the pressure are believed to be the Gdynia America Line and the Administration of the Port of Gdynia. Officials of the Ministry also allege to the Foreign Office that the provisions of Polish clearing and payment agreements with several other countries are such as to require in the protection of Polish Foreign exchange holdings the continuation of the practice in question. No explanation of the basis of this allegation is available to the Embassy beyond the statement that the complicated arrangements contained in such agreements make it necessary for the Ministry to apply the requirement. The Ministry insists to the Foreign Office that it can not in any circumstances forego its present policy of endorsing all permits when originally issued with the requirement.
The Ministry of Industry and Commerce, however, offers to and now follows the practice of removing the requirement from any permit issued covering American goods immediately upon the request for such action by the importer concerned. The Foreign Office was informed in October that the Ministry was “giving the necessary instructions to remove without any difficulties the requirement of direct shipment at every request of an importer of goods from the United States.” The Foreign Office and the Ministry of Industry and Commerce, while not in agreement with regard to the validity of the application in the first instance of the requirement, are of the opinion that the present practice avoids any real hardship or delay on American trade. In other words, if the question of the treaty provision is not raised formally, the present practice which the Ministry of Industry and Commerce insists to the Foreign Office is the only concession that it is in a position to make, would apparently operate to remove any burden or hardship that might be worked on American trade by the application of the requirement.

The Embassy has observed in two cases which came up during the course of the discussions that the requirement was removed upon the request of the importer. Both of these cases concerned the importation of sulphur from the United States. The Foreign Office, in connection with the practice now followed by the Ministry of Industry and Commerce, is now taking up strongly with that Ministry any case brought to its attention in which delay or difficulty is experienced in bringing about the cancellation of the requirement.

After a careful examination of the present situation, particularly with reference to the best interests of American export trade with Poland, I am of the opinion that the present practice of the Ministry of Industry and Commerce with respect to the cancellation of the direct shipment requirement should, from the American point of view, be given a trial for a sufficient period of time to determine whether American trade can, without suffering any hardship or delay, be carried on thereunder with Poland. The Embassy will continue to observe closely the operation of the practice and will inform the Department promptly of any changes in the situation as reported herein. It will, of course, endeavor to facilitate in every appropriate manner efforts of importers to obtain permits allowing them to import American goods by indirect as well as direct shipment. In the meantime, the Department should, in my opinion, give further consideration to this matter in connection with any conversations which may take place with respect to general matters affecting American-Polish trade.

Respectfully yours,

A. J. Drexel Biddle, Jr.