Papers relating to the foreign relations of the United States, 1929, Volume II

611.5131/763

The Ambassador in France (Herrick) to the Secretary of State

Paris, March 7, 1929.
[Received March 16.]

No. 9400

Sir: With reference to my telegram No. 91 of this date,⁴ I have the honor to forward herewith in copy and translation a note dated March 6, received from the Foreign Office, containing a draft agreement relative to the verification by American administrative officials of declarations of value made by French exporters. This note is in reply to the note delivered by the Embassy to the Foreign Office on October 19, 1928, pursuant to the Department’s telegraphic instruction No. 361 of October 16, 1928.⁵

After examination of this new draft I feel that the French have made a serious effort to meet our views. This will, I think, become the more apparent when the present draft is carefully compared with the original French note of January 27, 1928, transmitted by my despatch No. 8272 of January 31, 1928.⁶ In the original note, paragraph 3a contemplates the production by the exporter of “bills of sale, contracts and correspondence relative to the transactions in question.” In the new draft, paragraph 3a merely states that the exporter may “make proof, before the official agents of the American consulates, of the sincerity and exactitude of his declaration.”

In conference with the competent official of the Foreign Office he made it quite clear that, although the Government could not put it down in black and white on account of the susceptibilities of French producers and merchants, it entirely realized the greatly added latitude for investigation by American agents which will become permissible under the provisions of this paragraph. It is interesting to note, incidentally, that this official likewise readily agreed with my observation that even if this additional latitude should be made possible, cases where investigation might prove embarrassing or irritating would be just as rare as, if not rarer than, in the past.

The paramount importance of paragraph 5 of the new draft will at once be apparent to the Department. My Foreign Office interlocutor felt and hoped that the formula adopted would prove acceptable to us inasmuch as the words “en principe” could only mean that the method would be carried out on the basis mentioned if possible, but that if intervening factors should render this basis impossible the agreement would not be violated. Translating the quoted words into English by the phrase “in principle,” I feel that the foregoing is not only a justifiable, but also the proper, construction, which, if approved by the Department, would seem in practice to attenuate to the last degree possible any obligation theoretically assumed by us under the terms of this paragraph.

The Department will note that the first paragraph of the French draft is similar to the first paragraph of its original note. The Foreign Office felt that our note of October 19 did not shut the door upon a renewed suggestion of this kind in view of the recognition embodied in the remainder of the draft that the proposed activities of the agents of the Treasury Department would not have the character of finality.

I am quite aware of the various interests at home which have to be brought into agreement if and after the Department is in accord with my views as hereinabove set forth. However, without in any way taking at their full face value all the things that I have been told here, I am still inclined to believe that the Foreign Office realizes the importance of straightening this matter out and concurs in our desire to do so, and that in pursuance thereof it has gone about as far as it can in getting the other French interests concerned to agree to this text, which certainly takes into account the points raised in our note of October 19, 1928. The interests to which I refer are not only, in primis, the French Ministries of Finance and Commerce, but above all M. Poincaré himself, who apparently is following this question closely.

I have [etc.]

Myron T. Herrick

[Enclosure—Translation]

The French Ministry for Foreign Affairs to the American Embassy

Paris, March 6, 1929.

The Ministry for Foreign Affairs has the honor to thank the Embassy of the United States for the Aide-Mémoire which it was good enough to hand to it on October 19th last concerning the verification of declarations of value made by French exporters.

The Government of the Republic has examined with great care the observations made by the Government of the United States in regard to the suggestions submitted in the French memorandum of January 27, 1928.

Anxious to reach a solution which takes into account the legitimate preoccupations of the two Governments, it has endeavored to elaborate a draft agreement which will meet, insofar as French legislation will permit, the views which the Embassy of the United States was good enough to present.

The Ministry for Foreign Affairs is pleased to hope that this draft will meet with the approval of the Government of the United States. It would be obliged if the Embassy would kindly transmit it to Washington and would be happy if it felt that it could support it with a favorable recommendation./.

[Subenclosure—Translation]

Draft Agreement Relative to the Verification by American Authorities of Declarations of Value Made by French Exporters

1. The delegates of the American administration (i.e. Treasury Department) would be connected with the American consular authorities to whom French exporters must apply for the visaing of their invoices, and would control, by making use of their knowledge of the market and their personal information, the sincerity and exactitude of these invoices and the documents which usually accompany them.

2. When there is doubt concerning the sincerity or the exactitude of these invoices or documents, the delegates of the American administration would proceed to their verification.

3. In such a case, the exporter would have the choice between the two following methods:

(a) Either he would agree to make proof before the official agents of the American consulate of the sincerity and exactitude of his declaration;

(b) or he would agree to submit his declaration to an expert accountant or to a technical expert, or to two experts: one an accountant and the other a technical expert. These experts, of French nationality, would be chosen by the American authorities from a list drawn up by the French Government.

4. In case the delegates of the American administration should not feel in a position to reach a decision on the proofs furnished by the exporter, one or the other party could have recourse to the second procedure, that is to say to expert valuation.

5. The verifications made by the procedure of expert valuation, while not imperatively binding the American customs authorities, should however, in principle, constitute the basis of the definitive valuation of disputable merchandise.

4. Not printed.
5. Foreign Relations, 1928, vol. ii, p. 827.
6. ibid., p. 820.