611.5731/173½

Memorandum of Conversation, by Mr. Hugh S. Cumming, Jr., of the Division of European Affairs

Participants: Mr. Morgenstierne, the Norwegian Minister,
Mr. Sayre,2
Mr. Hugh S. Cumming, Jr., of the Division of European Affairs,
Mr. John C. Ross, of the Division of Trade Agreements.

The Norwegian Minister, Mr. Morgenstierne, called on Mr. Sayre by appointment at four o’clock this afternoon to discuss further certain matters in connection with a possible trade agreement between Norway and the United States, which he and Mr. Sayre had talked over informally last night.

Mr. Morgenstierne opened the conversation by saying that he had been very interested in what Mr. Sayre had said to him the previous evening and had prepared a telegram to his Government based on that conversation. He handed to Mr. Sayre his draft telegram which reads as follows, and asked Mr. Sayre if he would be good enough to indicate whether it correctly represented the tenor of the conversation:

“Assistant Secretary Sayre confirms that in the event of negotiations about a trade agreement it is the attitude of the Department of State that the tax and duty on whale oil should be reduced sufficiently to place whale oil on an equal footing with competing raw materials for the soap industry, giving due consideration to the special expenses connected with the necessary hardening process as regards whale oil.

“Mr. Sayre adds that the State Department adheres to its position as repeatedly stated that it is desirable that the American market be reopened for Norwegian whale oil, and that in the course of negotiations as referred to the tax and duty on whale oil should be reduced to such an extent,—if need be the maximum reduction authorized by [Page 620]the Trade Agreement Act3—, which can be shown to be necessary in order to accomplish this goal, viz. the reopening of the American market.”

Mr. Sayre read Mr. Morgenstierne’s telegram and then with respect to the first paragraph thereof referred to his conversation with Foreign Minister Koht (on October 28, 1937,)4 during which he had stated that it might be possible for this Government to reduce the duty and tax on whale oil in a trade agreement to an extent which would tend to bring that commodity into a competitive position with palm oil and tallow. In this connection, Mr. Sayre referred to the fact that the duty and tax on whale oil now amount to 3.8 cents per pound, while duty and tax on tallow amount to 3½ cents per pound, and the tax on palm oil (duty free) amounts to 3 cents per pound. Mr. Sayre also mentioned that he had said that in placing whale oil on a competitive basis with palm oil and tallow, insofar as duty and tax were concerned, consideration might also be given to the hydrogenation process to which whale oil must be subjected. Estimates of the cost of this process vary from ½ to 1 cent per pound.

With regard to the second paragraph in Mr. Morgenstierne’s draft telegram, Mr. Sayre stated that he had apparently been misunderstood by Mr. Morgenstierne, since of course it was not possible for this Government, either through the Trade Agreements Act or otherwise, to guarantee that the American market be reopened and kept open for Norwegian whale oil, regardless of price changes, etc., which might take place in the future.

Some conversation ensued, during which Mr. Sayre endeavored to explain again to Mr. Morgenstierne the restrictions which the Trade Agreements Act placed on trade agreement negotiations, and the impossibility of the State Department committing itself, in advance of actual negotiations, to a specific promise as to what concessions might be granted Norway.

Mr. Sayre then suggested to Mr. Morgenstierne that the following more nearly represented the position of the State Department, and that he would have no objection to Mr. Morgenstierne telegraphing it to his Government:

“Assistant Secretary Sayre confirms that in the event of trade agreement negotiations it is the attitude of the Department of State that the tax and duty on whale oil might be reduced within the limitations of the Trade Agreements Act sufficiently to place whale oil on an equal footing with palm oil and tallow, and that due consideration will be given to the special expenses connected with the necessary hardening process as regards whale oil.”

[Page 621]

Mr. Morgenstierne did not appear to be happy with the draft telegram as agreed to by Mr. Sayre, but said that he would study the matter and might take it up again in a day or so.

  1. Francis B. Sayre, Assistant Secretary of State.
  2. Act of June 12, 1934, 48 Stat. 943; extended by Joint Resolution of Congress, March 1, 1937, 50 Stat. 24.
  3. For memorandum of conversation, see Foreign Relations, 1937, vol. ii, p. 520.