851.4061 Motion Pictures/64: Telegram
The Chargé in France (Armour) to the Secretary of State
[Received May 11—10:30 a.m.]
206. Department’s 138, May 7, 6 p.m., and 145, May 9, 5 p.m., and previous telegrams exchanged between Embassy and Department.
The American film interests have taken the definite position that they would pay nothing to the French film industry; that payments would be made only to French Government. As any payments thus made would increase the general revenue of the French Government, it might, as a result, without any earmarking assist situation of the French film industry by alleviation of taxes or other means. Would the Department regard this as an indirect bounty within terms of section 303 of Tariff Act? Our feeling here had been that this act which was designed for protection and advancement of American interests, would not be construed so as to be a hindrance to arriving at a settlement advantageous to American interests.
As the Department is aware, the difficulty so far has been to find any solution which would enable the French to abandon the application of the contingent principle, and so far the increase of customs duties has been the only proposal evolved. Informal negotiations have now reached point where French Film Commission feels that matter must be referred back to François-Poncet, whereupon presumably the French Government will study possibilities of the application of this principle of higher duties or taxes. Any suggestion to the French that the application of this principle would result in the creation of further difficulties for French films exported to the United States would seem, as matter of necessity, to imperil its already problematical adoption.
Of course I appreciate the Department’s point that the French Government must not agree to any solution under a misapprehension; I wish only to inquire whether application of section 303 of the Tariff Act, which Department suggests, is so probable that MacLean should inform François-Poncet with regard to it.
Will the Department please instruct me fully on this question, with specific reference to course which the Commercial Attaché is to follow?