841.4061 Motion Pictures/139: Telegram

The Ambassador in the United Kingdom (Kennedy) to the Secretary of State

340. Your 172, April 25, 8 p.m. I agree with your proposal to separate the motion picture question from the rest of the trade agreement items. I suggest that you might use the same formula as in the Czech agreement31 and negotiate an entirely separate instrument relating to films alone.

It is my opinion that it will be unwise as well as useless to attempt to persuade the British to alter existing legislation. However, under the Act considerable discretionary powers are left in the hands of the Board of Trade. These powers were fully described in enclosure to despatch No. 140 of April 4, 1938.32 If all these powers were exercised in favor of the American industry it would benefit greatly.

Hence, it is suggested that in any negotiations the list of variables be made the basis of the United States proposals. Of particular importance would be to secure assurances that the Board of Trade will take action (1) to prevent the renters’ quota from exceeding 20%, (2) to reduce reciprocity costs to a figure which would permit American producers to take advantage of the reciprocity provisions, (3) to remove the present limitation on the use of triple credit pictures; and that the Board of Trade will not take action with a view to (4) increasing the cost test and (5) putting into operation the viewing test.

I repeat that these are the most we could ask for under present conditions. Do not lose sight of the fact that when you come to some items in the trade agreement on which you cannot agree, some credit must be asked for in return for concessions we have already made on the films bill. I have already discussed this with Stanley.

  1. See pp. 223 ff.
  2. Not printed.