648A.113/23

The Secretary of State to the Minister in the Union of South Africa (Totten)

No. 222

Sir: Reference is made to Consul General Linnell’s despatch No. 6, dated February 21, 1935,1 concerning a speech made by the South African Minister of Finance, in which reference is made to a proposed change in structure of the South African tariff. Although the Minister makes no reference to particular countries against whose products the highest tariffs would apply, Consul General Linnell and the South African press infer that one object of the proposed change would be to place South Africa in a better bargaining position with the United States, against which resentment appears to obtain because of the favorable trade balance enjoyed by it.

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I am naturally disturbed by the prospect of such steps being taken by the South African Government, particularly in view of the fact that the Government of the United States has already extended and proposes to extend to South Africa the benefits of the trade agreements with other countries. The policy adopted by the United States Government in its trade agreements program has been to extend these benefits to all countries which do not discriminate against American commerce. From our point of view, first degree discrimination consists of granting tariff and other concessions to third countries, conditionally or unconditionally, without extending them to the United States. We do not believe that any foreign Government could reasonably expect the continuance of our present policy should it so discriminate against us.

We do not hold with some governments that it is economically sound to attempt to bring about an even balance of trade with every country, but firmly believe that triangular or multiangular movement of goods and credits constitutes the healthiest trade condition. The United States has unfavorable trade balances with some countries, but does not because of this class those countries as offenders against world economy. We recognize that some countries can not absorb our products to the same extent that we need their raw or manufactured products.

You have doubtless received press releases from the Department which set forth the trade policy of the United States, but for your convenience I enclose four copies of a statement released on April 1, 1935.2 While it is presumed that the South African Minister at Washington has kept his Government informed and instructed regarding our policy, you may in your discretion informally convey to appropriate individuals the substance of this instruction and its enclosure.

Very truly yours,

For the Secretary of State:
Francis B. Sayre
  1. Not printed.
  2. Vol. i, p. 536.