The Chargé in Belgium (Tuck) to the Secretary of State
[Received February 16.]
Sir: I have the honor to acknowledge the receipt of the Department’s telegram No. 4 of January 13, 1938, 8 p.m., referring to the Embassy’s despatch No. 101 of December 13, 1937.…
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With particular relation to the difficulties arising from the failure of the Belgian Government to observe the terms and spirit of the Trade Agreement as outlined in our despatch No. 101 of December 13, 1937, certain developments have recently occurred here which are of interest to report.
A few weeks ago, at the request of M. Leurquin, Assistant Director of the Section of Commercial Accords at the Foreign Office, I called upon him, accompanied by the Commercial Attaché.5 At this meeting M. Leurquin laid his cards frankly on the table. A report, he said, had reached the Foreign Office that it was Ambassador Gibson’s intention to formulate a serious complaint against the Belgian Government, on the grounds of its continued failure to observe the terms and spirit of the Trade Agreement. He was most anxious to avoid this contingency and asked if there was anything that he could do to remedy the situation. Realizing that M. Leurquin had probably, through the Belgian Embassy in Washington, got wind of the recommendations and suggestions embodied in the Embassy’s despatch No. 101 of December 13, 1937, I judged it advisable to reply with equal frankness. I briefly reviewed the difficulties which were becoming [Page 206]increasingly apparent in regard to the successful operation of the Trade Agreement and I reminded him that as a result of a démarche made by Ambassador Gibson to M. van Zeeland in September 1937 (when the latter was still Prime Minister), the Embassy had been glad to notice that there had been a distinct betterment of the situation. I added that this happy state of affairs had unfortunately not continued and that since the Cabinet crisis in October there had been evidence that the members of the Interministerial Committee were resuming their old tactics. I said that my Ambassador was as anxious as the Foreign Office to avoid the necessity of further representations but that, in view of the attitude assumed by certain members of the Interministerial Committee, and of the numerous complaints which the Embassy was again receiving with regard to the operation of the Trade Agreement, he had felt obliged to make certain definite recommendations to his Government. I hastened to assure M. Leurquin, however, that it was the Embassy’s belief that it had encountered at all times a sincere measure of good will on the part of Foreign Office officials and that the difficulty consequently did not seem to lie in his Department, but was to be found in the apparently uncontrolled action of certain ministerial officials who appeared either indifferent to the desirability of observing the spirit of the Trade Agreement or were inclined to ignore the representations which the Embassy had so frequently made. The Commercial Attaché cited briefly, as an example, the delay in issuing import licenses which had mitigated [militated?] against the successful importation of certain American commodities. M. Leurquin was frank in agreeing that the situation was far from satisfactory and requested that I submit to him specific cases regarding which we found grounds for complaint. This, I told him, I would be glad to do although he was reminded that most of these cases had been brought to the attention of his Government in the past.
On February 4, I called for the second time on M. Leurquin, again accompanied by the Commercial Attaché, and left with him a copy of the memorandum and annexes which formed the enclosures to the Embassy’s despatch No. 101 of December 13, 1937. M. Leurquin, who has constantly displayed a desire to be as helpful as he consistently can, then referred to the Royal Decree published in the Moniteur Belge of February 2, 1938, with regard to the creation of a Central Office for Quotas and Licenses which will be known as the “Office Central des Contingents et Licenses”. This Office will have control of the administration of all quotas and the issuance of import licenses which have heretofore been vested in the Ministries of Economic Affairs, Agriculture, Transport, and Marine, according to the articles or commodities involved. He pointed out that the Ministry of Foreign Affairs and Foreign Commerce had, in the past, attempted to exercise [Page 207]some supervision over all these various controls but that, in spite of their efforts, there had been considerable jealousy among all the officials of the various Ministries concerned and consequent lack of coordination in the administration of quotas. The new Office, which will be directed by M. Henri Marchant, will be established in the Ministry of Economic Affairs and will endeavor to remedy the unsatisfactory situation which has hitherto existed. Furthermore, in the course of 1938, the functions and personnel controlling the issuance of licenses and quotas will be gradually consolidated and assimilated into this new organization. M. Leurquin added that he would occupy the position of Secretary-General of the new organization. He felt that many of the difficulties which had been encountered in obtaining licenses would be done away with by the new order of things.
After further discussion of a general and specific character, it was agreed that after M. Leurquin had made a careful study of the items embodied in the memorandum, we would again meet to discuss these individually and at length. I may add that M. Leurquin’s attitude gave me every reason to believe that the Foreign Office was disposed to meet us more than half way. It was also apparent that Belgian officials appeared anxious to avoid a second démarche of the kind which Ambassador Gibson made to M. van Zeeland.
I feel, however, that it would be unduly optimistic to expect a more liberal régime as regards restrictions placed upon imports from the United States. While the new Office of Licenses and Quotas may serve its purpose in coordinating Government activities, it is doubtful whether, with M. Henri Marchant at its head, there is any very real chance for improvement in so far as American commodities are concerned. M. Marchant, who administered the License Bureau in the Ministry of Economic Affairs during past years, has proved on many occasions obstructive in the distribution of quotas under the terms of the United States–Belgian Trade Agreement.6 Furthermore, he has shown that he is in sympathy with the views expressed by an economist of the University of Louvain, who recently conducted a study of the quota system. This economist proposed to the Government that the eligibility of importers to receive licenses should not be contingent upon their having been importers over a base period, but that any importer, although not having been accorded licenses heretofore, should participate in the established quota to the extent of 10%. He also advocated that this 10% should be deducted from the quota allotted to established importers who had qualified as eligible by virtue of the fact that they imported during the base period. This theory, if put into practice, would mean the eventual elimination of the established [Page 208]importer, and such a “long division” of quotas would be equivalent to their suppression since it would sooner or later prove unprofitable to importers to deal in such small quantities. It was gratifying to learn that M. Leurquin’s personal views do not coincide with those of the Louvain economist.