Office of the Historian

611.4131/1706a: Telegram

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

Washington, July 27, 1938—7 p.m.

395. Following is the text of a memorandum on lumber which I handed to the British Ambassador today.

[Here follows text of memorandum printed supra.]

You will recall that our proposal involved retaining the 50 percent reduction in our duty and excise tax on Canadian lumber as provided in the existing trade agreement,46 a reduction from 10 percent to 5 percent in the United Kingdom duty on Douglas fir and certain other American softwoods, and free entry on these American softwoods if and when the remainder of our excise tax on Canadian lumber is [Page 48] removed. In connection with this arrangement it was understood that the United Kingdom, in order to meet any objections the Baltic countries might have to the better treatment accorded our species of lumber as compared with theirs, would offer them a reduction on Baltic softwoods from 10 percent to 7½ percent. I told the Ambassador that the foregoing proposal seemed to be the only satisfactory solution of a difficult problem and urged that his Government carefully reconsider it. The Ambassador expressed surprise that I should suggest any measure inconsistent with the most-favored-nation principle. I replied that we are not doing so and called his attention to the fact that the object of what we are proposing is to free lumber from the uneconomic restrictions which have been imposed on it in the United States and the United Kingdom.

Grady47 mentioned over the telephone this morning that the United Kingdom authorities are disposed to accept any solution of the problem which is agreeable to the Canadians. The proposal outlined above not only is agreeable to the Canadians but according to our understanding is strongly advocated by them.

Hull
  1. For next of trade agreement between the United States and Canada, signed November 15, 1935, see Department of State Executive Agreement Series No. 91, or 49 Stat. 3960; for correspondence, see Foreign Relations, 1935, vol. ii, pp. 18 ff.↩
  2. Henry F. Grady, Chairman of the Committee for Reciprocity Information and Vice Chairman of the U.S. Tariff Commission.↩