Memorandum by the Secretary of State to the President 1


Memorandum for the President

Subject: Reference of the Question of United States Treaty Rights in French Morocco to the International Court of Justice at The Hague

The ECA Appropriations Act prohibits the use of any of the ERP funds for aid to any country if, “in the opinion of the President”, a dependent area of that country is failing to comply with any treaty between the United States and such dependent area.

This amendment is directed at French Morocco and requires a final resolution of long-smoldering differences between us and the French as to the extent of United States treaty rights there. With [Page 1755] State Department and ECA approval, the French have decided to refer the issues to the International Court of Justice.

I recommend that you withhold an expression of opinion regarding compliance with the treaties, pending the Court’s decision. It is appropriate for you to await the Court’s decision before you express an opinion on the issues before it.

Attached hereto is a memorandum giving a summary of the background of this matter and a press release which will be issued by the Department, if you concur.

Dean Acheson
[Annex A]

Background Memorandum Prepared by the Office of the Legal Adviser


Background Memorandum Regarding Moroccan Treaty Problem

The French Government has advised us that it intends to submit to the International Court of Justice the question of the extent and interpretation of our treaty position in the French Zone of Morocco. United States treaty rights in Morocco stem from a series of treaties beginning with the treaty of 1836 with the Sultan. Under these treaties the United States has exercised the right of extraterritorial jurisdiction, and is entitled to most-favored-nation treatment for United States commerce and “economic liberty without any inequality”. In view of our treaty position, it has been customary for the French Protectorate Government of Morocco to obtain this Government’s assent before considering local laws or decrees as being applicable to American citizens.

In 1939, the French Protectorate Government, in line with similar measures taken in France at the outbreak of war, instituted through various decrees a system of exchange and import controls in French Morocco. At that time, the United States reserved its position on these controls and withheld its assent to their application to Americans. In 1944, however, we assented to the exchange controls but this did not cover import controls. The withholding of our assent to the latter permitted Americans, most of whom established themselves in the import and export business in Morocco following the end of World War II, with their eyes on the liberal treaty rights, to import more or less freely from the United States provided they did not ask the French Protectorate for an official allocation of dollars to pay for such imports. Americans doing business in French Morocco have illegally transferred their franc earnings to Tangier to exchange them for dollars. Some thirty-seven Americans who established themselves in [Page 1756] Morocco after the war (mostly American veterans) were thus able to do (according to their own figures) ten million dollars worth of business in 1948 alone. The French asserted that this situation was exerting pressure on the franc and exercised a strong attraction for dollars to move out of the hands of the French exchange control system. The French Protectorate Government, therefore, promulgated a decree on December 30, 1948, which had the effect of limiting those imports which do not require an official allocation of exchange to a list of essential items (this “free list” now includes twenty items), and subjected imports of these items to the requirement of an import license. Allocations of official dollars are, for the most part, made under a competitive bidding procedure in which Americans have an equal opportunity to participate. The controls apply to persons of all nationalities and to imports from all monetary zones with the exception of imports from the franc area (the French and Moroccan franc are freely interchangeable).

We have recognized the temporary necessity for these import controls since their purpose is consistent with the objectives of the ERP and they conform to France’s commitments in its ECA bilateral agreement to take all steps necessary to stabilize the economy of the franc area and so forth. On this basis it was decided that temporary assent to their application to Americans was necessary even though the controls conflicted with the full realization of our asserted treaty rights in Morocco.

At the same time we recognized that Americans in Morocco had legitimate complaints against certain aspects of the administration of French trade restrictions in Morocco and, accordingly, before assent was given to these controls, negotiations were conducted with the French for the purpose of eliminating these practices and for obtaining the best possible treatment for Americans consistent with ERP objectives. These negotiations resulted in an agreement incorporating certain concessions for Americans and establishing a joint consultative group to handle further complaints regarding administration of the controls. This group has effectively handled all matters brought to its attention. Since the inception of this agreement we have continued to seek the best possible treatment of Americans and to protect them against discrimination. Special investigations in the field have convinced us that there is now no ground to allege discrimination against Americans. If such should be discovered, adequate authority to deal with it would be found in the Connally amendment to the ERP law, which was specifically directed at discrimination.

The American businessmen concerned have refused to recognize that important controls are necessary in Morocco for balance of payments reasons and allege that the controls discriminate against them. They have consistently opposed this Government’s position on this matter. [Page 1757] Having failed to influence the Executive to change its position on this problem, they turned to Congress where their efforts culminated first in an enlargement of the Connally amendment and later in the passage of the following amendment to the ERP Appropriations Act:

“… Provided further, that after November 1, 1950, no funds herein appropriated shall be made available to any nation of which a dependent area fails, in the opinion of the President, to comply with any treaty to which the United States and such dependent area are parties.”

Full-fledged compliance with the treaties as interpreted by the sponsors of this amendment would require the French to lift import restrictions based on balance of payments requirements and to grant Americans in Morocco more favorable tax treatment than persons of other nationalities. Not only would it be inconsistent with our objectives in France in connection with ERP to ask the French to agree to such proposals, but the French would not be expected to concur.

The French have contended during all recent negotiations on this subject that some of the treaty rights on which the Americans in Morocco have been relying are nonexistent or have been lost through the operation of law or custom. As a matter of law, our position respecting these treaty rights is uncertain. Last year the French wanted to take the issues to the International Court of Justice. We urged them not to do so because we felt that more satisfactory results would be obtained through mutual concessions made as a result of direct negotiations. The French agreed. The Hickenlooper amendment, however, is clearly intended to prevent us from assenting to restrictions that are not fully consistent with the treaties as we have interpreted them in the past. The French have now decided to take the case to the International Court of Justice. In discussions held before this decision was made, we told them that if this step were taken, the President would probably not make a finding of noncompliance while the issues were pending in the Court.

The Legal Adviser’s Office of the Department of State has examined the question and has expressed the opinion that the President does not have to formulate an opinion on compliance while the case is pending before the Court.

[Annex B]

Draft Press Release Prepared in the Department of State

(Not to be released before application has been submitted to the International Court of Justice by the French Government and until cleared by the President.)

[Page 1758]

Yesterday, the French Government filed an application with the International Court of Justice at The Hague for adjudication of United States treaty rights in Morocco. This action has followed the passage, during the last session of Congress, of an amendment to the ERP Appropriation which provides that after November 1, 1950, none of the funds appropriated may be used for aid “to any nation of which a dependent area fails, in the opinion of the President, to comply with any treaty to which the United States and such dependent area are parties”. This amendment was adopted by Congress following complaints of a group of Americans, most of whom started business in Morocco after World War II, that trade restrictions imposed by the French Protectorate officials have, in violation of treaties between Morocco and the United States, limited their opportunity to carry on their businesses.

The treaty rights of the United States in Morocco are based on a number of treaties and conventions starting with the treaty of 1836 between the Sultan of Morocco and the United States. One of the rights which the United States has regarded these treaties as granting to Americans is exemption from the jurisdiction of any courts in Morocco other than United States Consular Courts. In recognition of this fact, it has long been the understanding of the United States Government that Moroccan laws and regulations are not applicable to Americans unless the assent of the United States Government is first obtained. The French Government has submitted for the United States assent a number of recent decrees promulgating, among other things, import licensing restrictions and certain taxes. The United States Government considered that without its formal assent, these decrees were not applicable to its ressortissants. The French pointed out that, aside from the question of our treaty rights, these recent laws and regulations were temporarily necessitated by post-war economic conditions. It was also pointed out that the import licensing and foreign exchange restrictions are required by the French undertakings in the Economic Cooperation Agreement with the United States wherein the French Government agreed to take steps to maintain the stability of its currency.

The French Government maintains that the United States treaty position in French Morocco is anachronistic, that certain of our treaty rights have ceased to exist, or have been superseded by later agreements and practices. In December of 1949 when negotiations with the French regarding the conditions of continuing United States assent to import regulations were meeting with difficulties, the French took [Page 1759] steps to bring the whole problem before the International Court of Justice. However, France and the United States were able to reach an agreement respecting the terms of our assent and therefore the French application was not actually submitted to the Court. The recent amendment to the Act appropriating ERP funds has presented the question whether United States assent can be continued on the terms previously agreed upon. The French Government has, therefore, again proposed that the entire matter be submitted to the International Court of Justice in order to determine just what treaty rights exist and whether or not there is compliance. The United States is committed to submit to the compulsory jurisdiction of the Court in cases of this type, and it is recognized that this is essentially an appropriate and democratic way of resolving the dispute. Accordingly, it is felt that a Court decision will provide the best means of establishing the rights of the interested parties. The French Government has agreed that the decision to take the case to the Court will not affect the position of Americans under the present agreement regarding the application of import controls to them in Morocco.

In view of the fact that these very questions are pending before the International Court of Justice, the President2 will not make a determination regarding compliance with our treaties until the decision of the Court has been received.

  1. The source text, signed by Acheson, bears the following handwritten notation in the margin: “Approved 10/27/50 Harry Truman.”
  2. The words “has announced that he” were deleted from the text at this point with the initials “H[arry] S. T[ruman].” handwritten in the margin.