Foreign Relations of the United States, 1948, General; the United Nations, Volume I, Part 2

560.AL/3–1248: Telegram

The Chargé in the United Kingdom (Gallman) to the Secretary of State

secret   us urgent
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London, March 12, 1948—10 p. m.

1035. For Amb Douglas, Clayton, and Brown from Bliss; for Wilcox from Bliss, Upon receipt Havana’s 9 March 11,¹ considered it desirable convey to BOT officials substance second and following paragraphs beginning “only objection Holmes has raised” and ending “not even accept this”, with comments on urgency. BOT most grateful for clarification and after conversation with Havana by telephone state:

“Our information is that the Australian suggestion put forward by Phillips² in the working party on Tuesday March 9 was rejected by Bronz. We could accept it if US would.”

Action taken here and this reaction forwarded as of possible assistance to Havana negotiations on article 23.

Re section 9 during film negotiations³ I mentioned it in that connection and Wilson who had just come from Cabinet meeting on Charter said “don’t talk to me of section 9” from which infer that Cabinet gave him rough time on that question. Nevertheless Wilson and BOT have not mentioned it since Cripps’ proposal was turned down and apparently British have accepted our refusal consider it.

Tonight BOT unable assist further on timing except for effort clear article 23 at Havana and must await Cabinet decision Monday on Charter as whole. Ministers not available meantime. [Bliss.]

Gallman

1. Telegram 308 from Habana, March 11, p. 888.
2. J. G. Phillips, Representative of the Australian Treasury Department, employed by the Commonwealth Bank.
3. In order to conserve dollars the British Government, on August 6, 1947, imposed a 300% ad valorem duty on imported films. The valuation method resulted in a 75% tax on net earnings which would have otherwise been remitted abroad. American film makers were most concerned. On March 11, 1948, representatives: of the United States motion picture industry negotiated an agreement with the British Government which provided that the former rates of duty were to be restored; that $17 million of earnings per year for U.S. film showings would be remitted for two years; and that sterling uses of revenues in excess of remitted amounts would be permitted. The four year agreement was to be reviewed after 2 years, at which time conditions were to be set for the remaining two years.