be unjust, I believe, for the world to accuse us of "dollar imperialism" so long as the initiative for requesting aid under this new program must come from the nations themselves.

I shall be

Mr. Chairman, members of the House Foreign Affairs Committee, let me thank you again for this opportunity to place this statement in the record. glad to answer, as best I can, whatever questions you may have.

STATEMENT OF ROBERT E. RODES, WASHINGTON, D. C.

Mr. Chairman and members of the committee, my name is Robert Emmet Rodes. I represent the American Trade Association of Morocco, of which I am president, and the Morocco Post of the American Legion, of which I am commander. I am an importer and exporter, established in Casablanca, Morocco. I was demobilized there in 1946 with the grade of lieutenant colonel in the Engineer Corps. My last Army assignment was chief, north African section, Office of Strategic Services.

I appreciate the consideration that this committee showed me back in April when I testified in connection with the ECA authorization act. At that time I explained how a group of about 40 Americans who had settled in Morocco were being put out of business by Morocco's disregard for treaties guaranteeing us most-favored-nation treatment and open-door rights for our trade. The situation as it existed then has become considerably worse. In spite of the attention that it has received from Members of Congress and of the Senate, the Department of State seems powerless or unwilling to rectify it. It seems appropriate to bring it up at this time since Morocco is one of the areas that undoubtedly will be assisted by the program under consideration here.

The American group I represent went to Morocco with ideas of carrying out independent trade and development that would have been analogous to the development phases of the Point IV program. This seemed entirely logical because United States treaties with Morocco guarantee unrestricted imports of American goods into that country and unrestricted exports of Moroccan products. They have been blocked in every possible manner.

Last April I told this committee how Americans were abused in Moroccorefused gasoline and telephones although both were American gifts; charged illegal taxes and customs duties; refused the import of their own flags to celebrate our 1942 landings; how they had their businesses ruined by illegal embargoes and seizures and many other illegal and unfriendly acts.

This time it isn't necessary to repeat details. Assistant Secretary of State Ernest Gross recapitulates them in a statement found on page 10975 of the Congressional Record for August 4, 1949, as follows:

"Failure to allocate to Americans a reasonable amount of dollar exchange. The employment of delaying tactics in granting import licenses for goods which Americans needed for the maintenance of enterprises they were operating, and which they wished to import without an allocation of exchange by the protectorate exchange office; the assessment of customs duties on the basis of arbitrary valuations of imports; the assessment of consumption taxes to which this Government had not given assent; and other matters, such as the failure to install telephones, furnish adequate gasoline rations, etc."

Mr. Paul Hoffman concurs in this in his statement appearing on page 49 of the Senate Appropriations Committee hearings on the ECA appropriations bill, which reads as follows:

"The Department of State and ECA are aware that United States nationals in Morocco have a number of important legitimate grievances for which effective remedies should be found. The grievances include the inequitable administration of certain exchange-control regulations, discriminatory valuation of imports for customs purposes, the application to Americans of laws and regulations to which this Government has not given its assent, and a number of other problems of this character."

But the most important abuse is the embargo of American goods. Mr. Gross mentions this in a letter that Senator Saltonstall placed in the Congressional Record on page 10975 (August 4).

"Your constituent refers to the illegal holding of merchandise by the Moroccan authorities. Upon protest by the State Department the merchandise that was held illegally was released."

Now if the seizures were illegal it is because the embargo permitting them was illegal. The fact which Mr. Gross omits is that it took 5 months of protests to obtain release and that 3 weeks later the Department of State approved the

reestablishment of the illegal embargo which everyone in the Department of State admits is contrary to our treaties. This destroyed most American independent businesses and built up those of our French competitors that could command government favors.

I brought court action against the Department of State. The Secretary was restrained by Judge Goldsborough from continuing acceptance of this embargo and from "doing any other act which would in any way temporarily or permanently waive, relinquish, impair and/or extinguish the rights in Morocco guaranteed to citizens and commerce of the United States without first obtaining advice and consent of the Senate as required by the Constitution."

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The Secretary's reply which caused the order to be vacated was that the court was without authority over him and (part of Willard Thorp affidavit) —–— "If the plaintiff's petition is granted, there is no assurance that he would derive any benefit. If the United States Government is prevented by this court from granting its conditional assent there is no assurance that such regulations will not be enforced nonetheless, as was the case earlier this year." In other words, our Department of State suggests that it might as well permit United States citizens to be treated illegally as it is powerless to prevent it. If it cannot get legal treatment for its citizens from a friendly nation that it is subsidizing for an amount equal to half its normal budget, what earthly chance has it of gaining its objectives under less favorable circumstances?

The Department of State's attitude made court action necessary. We had been informed that certain remedies would be obtained before French proposals were considered. The proposals were accepted for 3 months without obtaining the remedies, but certain promises were made. When we gave the Department documentary proof that all the promises had been broken we assumed that its support of the French would cease. Mr. Thorp proposes to continue it in spite of the fact that all the abuses continue, that the program has not achieved its objective, and that it is carrying out what the official that started it claimed would "end competition by foreigners with Frenchmen" which he "always considered very vexing."

In view of this adamant position of Mr. Thorp, it was considered best to air the whole matter in court.

The attitude of the Department of State toward American citizens is indicated by their treatment last September 27. A meeting was held by Mr. Thorp on the Moroccan question. All the business interests present were unanimous in their bitter criticism of the proposals which were presented them for immediate comment. The proposals were classified as confidential, prohibiting publication. Evidence presented by the Department in court on October 4 showed that almost identical proposals were in the Department's possession on June 4.

Now I would like to connect Morocco with Point IV:

An article from Casablanca, by Demaree Bess, in the June 18 Saturday Evening Post, states that our ECA funds are aiding French colonial exploitation in north Africa, even in Morocco, an independent nation. Some excerpts are: "Frenchmen rule here notwithstanding that they number only 4 percent of the population of Morocco. According to American tradition, this type of

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colonial administration is contrary to our principles * * *

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"North Africa, then, has now reverted completely to French rule, and today its three districts are being administered once more like colonies, despite French efforts to conceal this fact. * * * Moslem nationalists * * point out that Frenchmen still retain for themselves the best jobs and a lion's share of the profits. * * The United States (formerly), however, .* * * refused to concede that the Sultan (of Morocco) was no longer ruler in his own country. * * * Into this curious situation our newly organized Economic Cooperation Administration now has suddenly thrown a monkey wrench. For generations our State Department has punctiliously differentiated between the French and the Sultan's governments. But now the ECA has nonchalantly lumped the two together in its European recovery program. Since no special provisions have been made for Morocco under ERP, the effect is that ECA's official recognition of French authority here is actively helping the French to consolidate their control.

"Morocco, under present French administration, has been unable to sell many of its products to any country except France, because the artificial exchange rate of Moroccan money has made Moroccan products too expensive for any except French markets * *

"Diehard Frenchmen are still worrying about the subversive doctrine expressed in the Atlantic Charter * *

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* * American policy here today, far from being 'anticolonial' serves as a powerful prop for French control of these north African territories. In theory, many Americans may still disapprove of the European colonial system. practice the United States Government is reenforcing it."

In

This confirms my observation. It seems that our principles and interests should discard the policy the article indicates. We should not back exploitation and absentee ownership. As far as I know it our policy about colonies is expressed in the Bill of Rights and the Atlantic Charter. It would seem logical to state this in the legislation you are considering.

On June 2, I wrote Mr. Willard Thorp the following letter, showing how all of our objectives can be obtained in Morrocco, without cost, by insisting on legal treatment for our citizens:

Mr. WILLARD THORP,

Assistant Secretary of State,

New State Building, Washington, D. C.

JUNE 2, 1949.

DEAR Mr. THORP: One point I neglected to stress this morning is that our treaty situation permits the achievement in Morocco of all our stated objectives for foreign trade and world economy. The assertion of our rights will divorce Moroccan and French exchange, making the former seek its real level. American investments in this "backward area" are perfectly protected. Treaties preclude confiscation, either admitted or in the guise of taxes. All litigation is before our own courts. Return on investments is assured by the right to unlimited export of their product. Unrestricted imports, also guaranteed by treaty, permit acquisition of equipment, supplies, and raw materials under the most favorable circumstances. Equal treatment allows enterprises to bring in American skilled personnel without visas or formalities.

It seems entirely logical to use Morocco to show the Eastern Hemisphere what our system can accomplish. Evidently people whose jobs, power, and profit depend on regimentation believe this. Their efforts to remove our foothold is far greater than justified by our present trade. In addition to demonstrating the soundness of the broader aspects of our economy, especially to the French Empire and the rest of Africa, Morrocco will permit unequivocal comparisons of our products, methods and skills with those of Europe. In the competitive situation that is rapidly developing this will be extremely important.

Freeing Moroccan economy will have the approval of almost the entire French and Moslem population.

Thanking you again for the attention you are giving this matter, I am Yours sincerely,

ROBERT EMMET RODES.

P.S. Attached is a copy of my testimony before the House Appropriations Committee.

I should like to read two excerpts from the report of State Department hearings:

Albert Mevi, of 30 Church Street, New York, told how he had tried to establish a chemical plant using Moroccan raw materials but had been prevented, first by a decree prohibiting foreign investments, which remained in force until rendered useless by another which prevented imports of supplies and equipment. Moroccan officials told him they might let him operate if he joined a cartel but positively would not permit him to compete freely.

Arthur Stanton, of the New York firm of Craig-Stanton & Co., told how his firm has spent $150,000 in developing a manganese mine. They now have 1,500 tons of high-grade ore ready for shipment but are told that they must ship it to France although treaties specifically prohibit this requirement. Meanwhile, Stanton claims, France is shipping ore to the United States, thus depriving Morocco of its dollar earnings.

Mevi's letter confirming this is here. I should appreciate your making it a part of your record.

The importance of two-way trade can't be overemphasized. It is my personal opinion that the most essential guaranty for an American enterprise operating abroad is the right to dispose of its product freely. That will permit our capital, skills, and equipment to enter the country and build up its national resources. If these resources are to be of real assistance to the country they can be exported for sound currencies. If they cannot be exported for sound currencies, I seriously doubt whether our country should encourage the enterprise producing them. Certainly if as a national policy we are to make up dollar shortages, we should

not be placed in a position of creating additional dollar shortages by our guaranties of enterprises that affect only the internal economy of the countries where they operate.

In Morocco an energetic, enterprising group of Americans, mostly veterans, have been trying, on their own, to establish the type of program we are subsidizing. They made progress but now are blocked by a predatory group of officials who refuse to recognize our treaty-guaranteed equality and a timid Foreign Service that will not act against those officials. The following amendments will prevent our subsidizing nations that violate our treaties and will not permit the Department of State to legalize their actions if they do:

"So long as any nation fails to comply with a treaty with the United States or permits one of its dependencies to do so, that nation and all of its dependencies shall be ineligible for assistance hereunder.

"Rights of the United States and its nationals granted by treaties with governments controlling areas eligible for assistance hereunder will not be altered, waived, or relinquished without renegotiation, and ratification as required by the Constitution."

A JOINT STATEMENT BY MOROCCO POST, No. 1, AMERICAN LEGION, AND AMERICAN TRADE ASSOCIATION OF MOROCCO

From 1836 until 1949 United States products could enter Morocco without restriction because of open-door and most-favored-nation guaranties in treaties with Morocco ratified in 1836, 1880, and 1906. The last two were signed also by France. In addition to assuring unrestricted commerce with Morocco, they prohibited the latter from levying more than 122 percent import duty, and limited taxes.

In July 1947 French officials began to disregard tax and custom provisions of treaties. Monopolies that came into power during the Vichy regime, and others established with more recent political support, have been strengthened and enriched, especially since ECA funds were placed at the disposal of the finance director.

In December 1948 the French finance director of Morocco passed a decree prohibiting most imports from the United States and drastically limiting those still permitted. He stated as one purpose the ending of competition by foreigners with Frenchmen. Americans in business in Morocco warned the Department of State of an apparent intention to make exceptions under the decree in pursuit of this purpose.

The Governor General, the entire elected Assembly of Morocco, the press, and both French and Moorish chambers of commerce protested this decree as a backward step in their progress toward normalcy.

The United States Department of State, at the insistence of American citizens, also protested it as a violation of our treaties, although it expressed a sympathetic attitude toward the restrictions as a move to help Morocco conserve dollars. In spite of protests, the decree was enforced unilaterally and American goods were seized and held for 5 months.

The Department agreed on March 24 that it would consider acceptance of the decree only after release of American goods, reimbursement of customs duties and taxes collected in excess of treaty provisions, and the ending of all discrimination against Americans. It also would observe French performance during a trial period before considering acceptance of the decree, to assure the foregoing, rather than to be guided by French promises.

On May 23 the illegally held merchandise was released. None of the other promised remedies was obtained. Nevertheless, the decree was accepted on June 10 for a period of 3 months. The Department's excuse for its defeat was "heavy French pressure."

Representatives of Americans in Morocco have given proof that illegal exceptions to the decree are being made as they predicted and are increasing drains on French dollars, also that discrimination against Americans continues. Several have already been forced out of business. Nevertheless, the acceptance by the State Department was extended until October 10, 1949.

This means that independent Americans in Morocco have been prevented from engaging in their normal treaty-guaranteed businesses for more than 9 months of 1949. Five months of this period was because of unilateral action by Moroccan authorities. The remainder has been with State Department acquiescence.

REMARKS ON APPLICATION OF MOROCCAN DECREE OF DECEMBER 30, 1948, TO UNITED STATES TRADE

The officially stated objective was to conserve dollars. The decree was applied in January 1949. United States exports to Morocco were 20.6 million dollars in the first half of 1949, against 13.6 million dollars for the last half of 1948, 28 million dollars for the entire year of 1948.

Automobiles were the principal "luxury" criticized among United States exports to Morocco. The decree absolutely prohibits them. United States exports of automobiles rose from $1,692,000 in the last half of 1948 to $1,752,000 in the first half of 1949. The Department of State has photostatic proof of authorization of imports of 70 passenger cars for resale, also of official refusals to allow American veterans either to import farm Jeeps for resale or to import a single car for personal use "because the law of December 30, 1948, prohibits these transactions."

Treaties between the United States and Morocco, ratified by France, and between the United States, France, and Morocco state that the United States will have most-favored-nation treatment and open door for her trade and "may buy and sell all sorts of merchandise but such as are prohibited to the other Christian nations." An example of how this is being ignored is that our textile exports to Morocco were $3,500,000 in 1948. They are now averaging $50,000 a month because of the decree. Meanwhile, the Moroccan market is flooded with imports from France, whose rights are identical with ours, and from Switzerland, Czechoslovakia, Poland, Hungary, and other nations who have no rights in Morocco.

This decree was applied while all other trade was being liberalized. Wage restrictions, most rent restrictions, and gasoline rationing have been abandoned. Trade in coffee, sugar, and tea, controlled by political favorites of the Moroccan administration, has been liberalized. Dollar imports are at a peak, but the increases are in products controlled by selected importers.

Only independent American trade has been restricted-"to end competition by foreigners with Frenchmen."

Exports of Moroccan products, also guaranteed by treaties, are similarly prohibited.

The trade guaranteed by our treaties would lead to free economy in Morocco, activated by American initiative, energy, skills, and capital. Our stated objectives-practical exchange rates, balanced trade, acquisition of strategic raw materials, and development of backward areas with private American capitalcan all be obtained by restoration of our treaties, which may not be waived legally except with Senate consent.

STATE DEPARTMENT HEARINGS ON MOROCCO-FRENCH PROPOSALS FOR CONTINUED SUPPRESSION OF INDEPENDENT AMERICAN BUSINESS

French proposals to set aside United States treaties in Morocco are part of a calculated campaign to end American competition, according to representatives of United States business interests who testified at a hearing held by the State Department on September 27. The meeting was presided over by Willard L. Thorp. Assistant Secretary of State. Thomas Wilson, of the Department of Commerce, and other State and Commerce Department officials, were in attendance. The American businessmen told of wholesale discrimination in favor of French political favorites in Morocco and of anti-American acts which included seizure of 50 percent of certain imports as well as high customs levies and special taxes imposed in violation of treaties which prescribe maximum duties of 121⁄2 percent.

Although treaties signed by both France and Morocco guarantee us an open door to Moroccan trade and most-favored-nation treatment, it was pointed out, our imports and exports are subject to embargoes and rigid controls which are not applied to other nations and the real purpose of which is to channel all profits to favored French interests. The free competition which existed in Morocco in 1948 limited imports to commercially sound products. Businesses run by independent Americans accustomed to meeting competition prospered, while those which depended on Government favors were losing power. With the suppression of free economy in January 1949, the criterion for imports again became Government choice instead of economic demand. This choice is exer