611.5731/174½

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

Mr. Morgenstierne telephoned me this afternoon and said that he had been thinking over his conversation with Mr. Sayre yesterday afternoon. Upon reflection he had come to the conclusion that the draft telegram to Oslo which Mr. Sayre had approved was not very encouraging and would be disappointing to his Government. At some length he went over the old story of the injurious effect on Norway of our excise tax on whale oil. In particular he said that he wished that we would carefully consider substituting in the draft telegram above-mentioned the words “competing raw materials” for the words “palm oil and tallow”, and to the addition to the draft telegram of some revision of the second paragraph of the draft telegram as originally prepared by him and shown to Mr. Sayre. I told the Minister that we would be very glad to look into the matter for him.

I then repeated briefly what Mr. Sayre had said to the Minister yesterday regarding the limitations placed on us by the Trade Agreements Act and said that I was sure that he would understand why it was impossible for us prior to entering into negotiations for a trade agreement to indicate precisely and in explicit terms what concessions we would be able to grant Norway on whale oil or any other item in a possible agreement. I said that I thought we had already gone quite as far as we could in the statements made by Mr. Sayre to Dr. Koht last fall and in the final draft of the telegram approved by Mr. Sayre.

The Minister said that he thoroughly understood the limitations placed on us by the Trade Agreements Act but that he wished to recall to me that in the fall of 1935 we had gone much further than we seemed to be willing to go now and had in fact promised that if trade agreement negotiations should be undertaken we would be willing to give Norway the benefit of the maximum possible reduction in the duty and tax on whale oil.5 Since this is an old contention of the Minister’s, I did not feel it necessary to go into the matter at any great length. I did however say that while undoubtedly in the various conversations which have taken place during the past few years on the subject of whale oil, much had been said of the possible effect of reductions of [Page 622]various percentages, I was sure that no one had promised a reduction of any specific amount since there was no authority in law for any such promise in advance of actual negotiations, et cetera.

The Minister asked that we give careful consideration to what we might authorize him to say to his Government since he was afraid that in the absence of some encouraging words from us on whale oil his Government would not wish to proceed with trade agreement negotiations.