The Secretary of State to the Ambassador in France (Bullitt)
Sir: The Department has noted that foreign exchange control was established in the French colonies and mandated territories in Africa by a decree of September 9, 1939, which was published in the Journal Officiel of September 10, providing for the application to those areas of the provisions of the French decree-law of the same date prohibiting or regulating in time of war the export of capital, exchange operations and trading in gold. A series of regulations issued simultaneously in implementation of the decree appear to be in all essentials identical, mutatis mutandis, with the exchange control measures applying to France itself.[Page 929]
A supplementary French decree of September 9, 1939, relating to the payment of imports and exports, also published in the Journal Officiel of September 10, made provision under Article 8 for its application to the French colonies and mandated territories in Africa. Among those provisions was the stipulation that all imports of foreign merchandise shall be subject to the prior obtainment of a certificate attesting either that the delivery of foreign exchange necessary to effect payment had been authorized, or that, according to the importer’s declaration, no foreign exchange in payment was required. It appears, moreover, that an import license must accompany each such certificate; while in the case of exports, the foreign exchange received in full or partial payment must be sold to the Colonial Exchange Office within one month after receipt. If payment for exports is offered wholly or partially in French francs the exporters must undertake to accept in payment only foreign holdings in francs which the Colonial Exchange Office has authorized to be issued for the purchase of French products.
Article 9 of the same decree, however, specifically exempted from the control of the authorities all payments between France and the French colonies and mandates, in the following terms:
“Commercial settlements between the home country, Algeria, the colonies and African territories under mandate, as well as commercial settlements with Tunis and Morocco, will not be subject to the provisions of the present decree.
“The same will apply to commercial settlements with Syria and Lebanon as soon as provisions similar to those in the decree-law referred to above have been made applicable in Syria and Lebanon.”
According to a telegram from the American Consulate General at Beirut dated December 4, 1939, complete control over foreign exchange and over imports and exports was instituted in the States of the Levant under French mandate on December 3, 1939, products from France and French territories being exempted under the regulations.
These exemptions from the exchange control regulations, in the case of transactions between France and the French mandated territories of Togoland and the Cameroons, are obviously inconsistent with the provisions of Article 6 of the respective mandates for those territories, to the benefits of which the United States and its nationals are entitled under the terms of the American-French convention signed at Paris on February 13, 1925 .42 Paragraph two of Article 6, it will be recalled, states in part that “the Mandatory shall ensure to all nationals of States Members of the League of Nations, on the same footing as his own nationals, freedom of transit and navigation, and complete economic, commercial and industrial equality”.[Page 930]
The exemptions favoring French trade in the case of Syria and the Lebanon are clearly inconsistent with Article 11 of the Mandate, to the benefits of which the United States is entitled under the terms of the American-French Convention signed at Paris on April 4, 1924.43
Furthermore, the exchange restrictions and import regulations in general, in so far as they apply to those portions of French Equatorial Africa and the Cameroons lying within the specified region known as the Congo Basin, are clearly inconsistent with the provisions of the Convention signed at St. Germain-en-Laye on September 10, 1919,44 to which the Governments of both France and the United States are parties. Article 2 of that Convention provides that merchandise belonging to the nationals of the signatory powers shall have free access to the interior of that specified region in Africa, and that no differential treatment shall be imposed on such merchandise on importation or exportation. The import permit requirements and exchange control regulations which have been applied to the region in question, apparently without the consent of the signatory powers to the St. Germain Convention, not only seem to overlook the right of free access but to involve discriminatory treatment of American goods.
While the Department is not disposed to question the adoption of measures in the French colonies and mandated areas referred to above which may reasonably be considered necessary and consistent with the status of those territories and the obligations of the French Government as mandatory or responsible for the government thereof, it cannot overlook illegal and unwarranted interference with American treaty rights and it is unable to recognize either the necessity or justification for the administration of the exchange control and import license system in those territories in a manner to give preference to imports from French Empire sources, with a resultant discrimination against their trade with the United States.
This Government confidently expects that the French Government will recognize the right of American merchandise to enter the French colonies and mandated territories freely and without discriminatory treatment under the terms of the pertinent mandate conventions and the Congo Basin Convention, and, in view of the adverse effect which the regulations may be expected to have on American trade, that appropriate steps will be promptly taken to this end. You should seek an early opportunity to discuss these matters with the French authorities, leaving with them an aide-mémoire in the sense of the [Page 931]present instruction. You should make a general reservation with respect to American treaty rights covering trade relations with those French colonies and mandated areas to which the above-mentioned treaties apply. Please report by mail the results of your interview.
Very truly yours,