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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa

France,   pp. 275-318 PDF (16.0 MB)

Page 280

We have noted from your 146, March 24, 6 p. mr.9 that Phillips stated
that he would, in consultation with his association, further consider
this question. We would be interested in knowing what views were
developed by Phillips' organization regarding this proposal and we
would be glad to receive any instructions on this point which you
might wish to give us. In this connection the Minister in our dis-
cussion yesterday indicated that if he found it impossible to work
out a system for the distribution of licenses satisfactory to both Gov-
ernments he might consider the possibility of establishing some form
of Government import monopoly.
  As regards the question of the license taxes the Minister made the
statement that when estimates are available as to the size and price
of the next French crop if these estimates should show that French
fruit would be sold at a price so low as to make it impossible for
American fruit to compete then he would do everything possible to
suspend again the license taxes on apples and pears. He stated,
however, that the estimates regarding the French crop would not be
available before late October and that therefore there could be no
question of suspending the license taxes before that time. He called
attention to the fact that apples and pears are the only commodities
on which the license taxes have not been restored to the level of
October 1, 1936.
  It is our considered opinion in which the Acting Commercial
Attache joins that the primary obstacle to the sale of American apples
and pears on the French market, is not the existing system of distribu-
tion of licenses but rather the wide spread between the cost of Amer-
ican fruit cleared in France and the cost of French fruit. For
instance last year American apples had to be sold in France at 75
to 80 francs a box against a price of approximately 65 francs for
comparable French apples. The trade now estimates that for the
coming season American apples will have to be sold at approximately
90 francs a box if the present charges are retained. It is likely that
the price of French apples will not be appreciably higher than last
year. In view of this situation it is obvious that there can be no
interest or profit in trafficking in licenses and therefore under present
conditions the license distribution system becomes only a secondary
obstacle to the sale of American fruit here.
  In considering the various factors which have brought about the
wide differential in the cost of American and French fruit, it is
evident that two successive devaluations of the franc have played an
important role. It would even seem doubtful whether with the
elimination of the license taxes we will be able to utilize fully our
quota for apples and pears during this coming season.
"Not printed.

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