681.003/158
The Ambassador in France (Straus) to the Secretary of State
No. 1645
Paris, February 19,
1935.
[Received February 28.]
Sir: Referring to the Department’s
telegraphic instruction No. 47 of February 9, 3 p.m., 1935, 1 have
the honor to transmit herewith a memorandum of a conversation which
took place on February 15 between a member of the Embassy staff and
a representative of the Ministry for Foreign Affairs with regard to
the specific points raised in the Department’s telegram and the
general subject of the French proposal for economic reforms in
Morocco. Although there has been
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no opportunity to revise the memorandum, it is
felt that it will prove fully self-explanatory concerning the
situation as it exists at present.
In order to complete the memorandum there is enclosed the text of the
pertinent portion46
of Sir John Simon’s note to the French Government reserving to Great
Britain all treaty rights but consenting by derogation therefrom to
the specific reforms under contemplation. Since this note was read
to the Embassy with the understanding that it had not yet been made
public, it would be appreciated if the text might be regarded as
confidential and the British Embassy should not be informed that we
are acquainted with its precise content.
Finally, I append a personal communication46 from M. Coursier of the
Ministry for Foreign Affairs, dated February 15 but not received
until the 19th, together with its enclosure, a memorandum concerning
the general way in which the projected quota system may be expected
to function. It may be observed that the Government of the United
States would be given an opportunity to submit observations directed
towards the framing of the quotas in such manner that their
functioning might be as advantageous as possible to American
commerce.
As indicated in the Embassy’s memorandum the French Government
recognizes that we have certain very definite treaty rights. It is
not attempting to discuss these rights nor to claim that there is
any legal obligation upon us to submit to alteration thereof. What
it asks is that quite aside from juridical considerations the
Government of the United States consent, entirely as a matter of
good will and while making full reservation with regard to its
treaty position, to certain reforms in the economic system of
Morocco which are deemed expedient to the normal development of
Morocco.
I think there can be no doubt in any of our minds that it is
unfortunate that, largely due to British insistence, a limited quota
system should be envisaged as part of the economic plan. The best
that can be said is that the French Government seems to be sincere
in its desire to adapt the system so far as possible to American
needs. If the Department should decide to accept in principle the
projected economic reforms, it would appear possible through
collaboration between French and American authorities to safeguard
American imports into Morocco under the quota system. It is evident
that the French authorities would welcome our observations on the
subject and the Diplomatic Agency at Tangier together with the
Consulate at Casablanca should be best fitted to advance pertinent
recommendations, should the negotiations reach that point.
It seems to me worthy of consideration what our position will be in
the event we do not consent to the reforms. Doubtless the reforms
will
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be put into effect
with or without approval since the other powers concerned are one by
one withdrawing their objections. We should then be left as we were
as concerns the Protectorate Treaty—a non-adhering power which could
only continue to lodge protests and which would be forced into the
invidious position of having been an obstacle to the reforms. I do
not pretend to advocate the modifications any more than I am
disposed to oppose them. It appears to me however that if they are
inevitable, we might as well accept them with good grace and obtain
credit for so doing, as well as secure a voice in the drafting of
the quotas.
In this connection it may be appropriate to state that latterly the
French Government has in several Franco-American commercial matters
afforded instances of that good will which we have long preached to
them is a prerequisite to better understanding. The most practical
means of demonstrating to the French authorities that liberal
gestures are worth while is to respond in kind. In consequence,
without passing on the merits of the Moroccan proposals, I recommend
that they be given at least sympathetic consideration.
Respectfully yours,
[Enclosure 1]
Memorandum by the Second Secretary of Embassy
in France (Williamson)
Paris, February 18,
1935.
On February 15 M. Coursier and M. Seydoux, representatives of the
Ministry for Foreign Affairs, called upon me at my request to
discuss at further length the French proposals for economic
reforms in Morocco. I handed them an aide-mémoire containing the observations included in
the Department’s telegraphic instruction No. 47 of February 9, 3
p.m. M. Coursier stated that he would prefer to regard the aide-mémoire as an informal memorandum
connected with the negotiations rather than as a communication
addressed to the Ministry for Foreign Affairs requiring an
official response. In this way he will be able to furnish the
Embassy with a personal reply which will not involve the two
Governments in a controversy over technical points.
M. Coursier stated that, as we were informed on the occasion of
our first meeting47 at the Foreign
Office, the French Government hopes that the United States
Government will not treat the French proposals from a juridical
standpoint. In other words, it is desired that the proposals be
considered outside of the framework of juridical rights.
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It is recognized that
the United States has its thesis concerning American treaty
rights and of course the French Government likewise has its
thesis with regard thereto but if we were to enter into a
protracted argument with regard to these rights no progress
would be made. The French Government therefore hopes that while
making any reservations which we may care to concerning our
treaty rights, we may as a friendly gesture give favorable
consideration to the French proposals entirely outside of our
juridical position, in so doing taking account of the
development in Morocco and the consequent need of a more
flexible economic system.
It was such a course as advocated above that the British
Government followed in accepting the French proposition. M.
Coursier read to me an official note from Sir John Simon in
reply to the French representations. The second part of the note
contains the text of the French proposal which was accepted by
the British, subject to certain modifications. In the preamble
of the note the British Government took care to state that it
was accepting the French project as a matter of friendship upon
the distinct understanding that British treaty rights were not
affected and that the acceptance only apply to the reforms at
present visualized. I attach hereto the pertinent portions of
the preamble to the British note48 in the belief that should our
Government ultimately give favorable consideration to the French
proposal, our juridical position may be conserved in much the
manner employed by the British Government.
With regard to paragraph (1) of the Department’s instruction No.
47, M. Coursier stated that we are of course entitled to our
thesis by which we maintain that the exchange of notes, and
particularly that of January 2, 1917, from the Secretary of
State to the French Ambassador in Washington,49 recognized only the French
Protectorate in Morocco and did not include adherence to
protective treaties or any modification to American treaty
rights. He expressed the belief, however, that such
considerations are not useful at this time since the French
Government is not insisting that it has the right under the
treaties to force us to accept the projected economic reforms,
its stand being that quite aside from treaty rights it is asking
us to consent to a much needed economic reform.
As to the second paragraph of the Department’s telegram,
concerning whether it is obligatory for the French Government to
consult us other than as a matter of courtesy with regard to the
proposed augmentation in the Moroccan tariff, the French, as
previously stated, would prefer to avoid a juridical argument.
Nevertheless, in order
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to respond to the Department’s request for an explanation, M.
Coursier sketched the situation as follows: Neither the American
treaty with Morocco51 nor the treaty of Algéciras contains any clause
fixing the tariff rates at the present 10%. The clause relative
to tariff rates is included in the British treaty and our right
to insist upon the status quo relative to
present tariff rates arises only in virtue of the
most-favored-nation clause of the American-Moroccan treaty. In
consequence, if the British Government now consents to permit
the augmentation of certain of the tariff rates it is not
logical to suppose that our most-favored-nation clause affords
us rights which the British Government no longer enjoys and of
which they have made express derogation.
The Embassy did not fail to stress at length the inequities of
the quota regime and it inquired if the French Government could
not abandon that portion of its program. M. Coursier replied
that personally he feels as we do about the quota system but
that the British Government had insisted on the inclusion of
certain quotas and that an agreement having been made on this
point with Great Britain, the French Government is not in a
position to abandon the six quotas envisaged. I then stated that
while the quotas in question might be to the advantage of
British trade, they were certainly badly chosen so far as
concerns our trade in that they hit some of our outstanding
exports, notably automobiles. I then read him excerpts from the
despatch of the American Consul52 at Casa Blanca, dated February 8,
enclosed with Mr. Blake’s despatch of February 9, 1935.53 In reading
him these excerpts I explained that if the quotas were not based
on favorable years for United States trade or if in certain
instances all products of a given nature were lumped under one
heading, United States trade would greatly suffer despite the
circumstance that the quotas are theoretically applied without
discrimination. It was further pointed out that if the quotas on
given general classifications of products were broken down into
separate tariff categories, the effect on American trade would
be largely dependent upon how fairly the customs nomenclature
corresponds with actual imports from the United States. Finally
it was pointed out that the customs statistics themselves were
oftentimes assembled in such way as not to give a fair picture
of American imports into Morocco and that if customs statistics
were taken as a basis for quotas, our trade would be strongly
prejudiced as regards many items such as, to take a single
example, batteries for automobiles.
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M. Coursier was much impressed with the exposé of the quota
system as given by Consul Hopper and he remarked that it was a
very able piece of work and threw an entirely new light on the
matter. He said that of course the projected quota system is not
in any sense aimed at American commerce and that therefore the
desire of the French Government is to make its application as
little onerous as possible to American interests. He thought
that in conjunction with the Embassy and the Diplomatic Agency
the quota system might be so worked out as to give due weight to
the preservation of the American position. I subsequently asked
M. Coursier, at the Ambassador’s request, to submit to the
Embassy a preliminary sketch54 showing just how the quotas will function, including the
manner in which the general classifications or chapters will be
broken down into separate categories if such is the intention of
the French Government. This he promised at once to do and after
the sketch is received the American authorities concerned will
be in a position to judge precisely how American trade will be
affected and what changes in the proposed quota system must be
recommended. M. Coursier expressed himself as desirous, in so
far as possible, of adapting the quota system to our
requirements.
With regard to page 3 of Consul Hopper’s report, item 2 under the
tariff reforms, M. Coursier stated that the constitution of the
Committee of Appeals had been radically altered in the agreement
with the British from the manner outlined by the Consul and that
it is thought the arrangement now envisaged is not only fair but
provides advantageous facilities for appeal which will do away
with the present autocratic handling of customs disputes by M.
Serra, whose wings are apparently to be clipped.
Finally, in answer to my inquiry, M. Coursier explained with
regard to the observations of Mr. Blake, contained in paragraphs
(1) and (2) on page 3 of his despatch of February 9, that while
quotas will be applied in the Spanish Zone and the Tangier Zone
as well as the French Zone in Morocco, three distinct systems
will be constituted so far as concerns licensing and customs
statistics. In consequence the percentages of the American
allocations applied in the French Zone will have no bearing
whatsoever in the Spanish Zone, for example, where the
allocations to individual countries will be made in conformity
with the trade statistics of that particular zone. Thus, if we
now have 90% of the automobile trade in the Spanish Zone, we
should continue to enjoy 90% under the Spanish Zone quota
system.
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[Enclosure 2—Translation]
Memorandum Regarding the Mode of Application
of the Quotas
[Paris,] February 15, 1935.
The group designation of merchandise to be placed under quota, as
it is given in the proposed customs reform for the Shereefian
Protectorate, is merely a general nomenclature indicating
divisions by chapters.
In the application, quotas would be fixed according to categories
of manufacture, according to the schedules given in the official
nomenclature of commercial statistics such as is published
yearly.
Quotas would be fixed separately for each zone and might include
similar or different types of merchandise, but they should be
established according to uniform rules, that is, in accordance
with statistics of the period chosen by common agreement.
Merchandise under quota might be shipped from one zone to
another, providing the importers shall have obtained licenses in
the manner provided for by the regulations.
Licenses would be granted for a period of six months within the
limits of the quota apportioned among the exporting countries in
proportion to their imports into Morocco of the merchandise
under consideration during the period from 1928 to 1933. The
Government of the Protectorate would have the power, in case of
necessity, of carrying over unused licenses from the first to
the second semester.
These rules, which form the basis of the quota system, are
susceptible of such modification as may be justified by the
suggestions or observations presented by the Powers concerned,
in so far as the suggestions do not run counter to the principle
of equality of treatment which characterizes the reform
contemplated by the Protectorate.