No. 1. We have been for many years importers of tartaric raw materials such as argols and wine lees from the wine-producing countries of the Mediterranean and amongst them from Morocco. During the war I was stationed in Algiers by our Government, first with the FEA then with several other agencies which took over the preclusive buying under the direction of the Combined Food Board. I spent considerable time in French Morocco and became convinced that this is one of the outstanding backward areas worth developing. As an official of the United States Government, I wrote several memoranda to Mr. Leo Crowley and officials in the State Department on this very subject from abroad in 1944 and 1945. It is not a new problem with me. No. 2. In order to develop this backward area for the purpose of producing more and better tartaric raw materials, I went to Casablanca in August 1948 to establish our firm and start operations on the spot. At the same time we are interested in establishing a new patented, and greatly improved method for refining vegetable oils, particularly peanut and olive oils. Tartaric raw materials and vegetable oils were highly critical during the last war and in the event of new difficulties, the strategic value of such installations to the United States of America would be considerable if not indispensable. No. 3. The reception by the French authorities in Rabat has been most negative. First no foreign investments were permitted during my original visit in August 1948. This restriction was changed with the new Dahir which you propose to accept. Instead of restricting capital investments, the import-license system has been established which makes free imports into Morocco impossible. I was informed in Rabat that if we were prepared to adhere to the rules and regulations of the vegetable oil cartel we might, perhaps, be able to bring in our equipment under special license. Morally and actually we cannot operate as an American firm under a cartel system, as you well know in the State Department; therefore, the Dahir which you propose to accept in order to help French economy makes our operations in French Morocco impossible until free trade is reestablished. Personally we feel very strongly that if this Dahir is accepted even on a temporary basis controlled economy will be in French Morocco to stay and American business interests, strategic interests, and political interests will be very greatly endangered. In closing I repeat that the reasons given by the French for the Dahir hide the real purpose, namely, the elimination of the American competition and the perpetuation of French cartels to the detriment of American interests. We hope that you can see your way clear to abandon your present position and to reject the proposed Dahir without reservation, thereby not only protecting the American businessman in Morocco but benefiting the United States as a whole, economically, politically, and most of all strategically. The backward area development will then also benefit metropolitan France, although French Morocco is only a protectorate and not their colony, yet. Very truly yours, TARTARIC RAW MATERIALS, INC., P. S.-The very guaranties proposed by the administration to safeguard private investments abroad for the development of backward areas exist in French Morocco. The acceptance of the Dahir would destroy the very prerequisites without which private or government investments are impossible in foreign countries and for which we would have to negotiate in all countries except French Morocco provided the Dahir is rejected. Mr. GEORGE MCGHEE Assistant Secretary of State, NEW YORK, N. Y., August 28, 1949. New State Building, Washington, D. C. DEAR MR. MCGHEE: I was sorry that you were unable to keep our appointment for 4 o'clock yesterday. While I had an interesting discussion with Mr. James Moose, he was unable to tell me the actual situation as regards the American rights in Morocco. As I have remarked and written repeatedly, is seems reasonable that I should have the same facilities for practical comment on actions proposed by the Department, involving interests that I represent, that are accorded to the Frenchmen who oppose me. This discussion should take place before the Department enters into any commitment. While I have talked to various officials and staff members in the Department, there has never been an exchange of ideas about commercial and economic phases of the Moroccan question. As an example, I have written numerous letters in connection with the Moroccan decree which you accepted on June 10. Three weeks later (July 1) I received a letter advising that acceptance had been given and indicating that it replied to my letters of April 9, 12, 13, 15, and 29. May 12, June 2, and June 9. This is due to the attitude of your Commercial Policy Division. It is my opinion that having taken an economically and legally unsound stand that division seeks to cover up rather than rectify its mistake. As an example take the statement: "On March 11, 1948, the protectorate authorities issued a decree waiving the licensing requirement for imports which could be financed by importers with their own funds held abroad. The removal of this requirement greatly stimulated a flow of goods, a large portion of which were the luxury type." I showed Mr. Moose Department of Commerce figures as follows: United States exports to French Morocco, 1947 and 1948, by quarters (f. o. b. value, in current United States dollars) The discussion also covered legality of acceptance by your Department of Moroccan Laws contrary to our treaties. Material on this subject, inserted in the Congressional Record on August 23, had been brought to Mr. Moose's attention. The last pertinent legislative instruction was in the ratification of the General Act of Morocco, bears the following language (U. S. Statutes at Large 19507, vol· 34, pt. 3, p. 2946): "The Government of the United States of America, having no political interest in Morocco and no desire or purpose having animated it to take part in this conference other than to secure for all peoples the widest equality of trade and privilege in Morocco * * * " The Senate ratification also added: "That as a part of this act of ratification the Senate understands that the participation of the United States in the Algiciras Conference and in the formulation and adoption of the general act and protocol which resulted therefrom was with the sole purpose of preserving and increasing its commerce in Morocco, the protection as to life, liberty, and property of its citizens * * * "" In the series of negotiations and correspondence started in 1912 concerning proposed recognition of the French protectorate, France was informed repeatedly that we could not waive our rights in Morocco without consent of the Senate. This was made entirely clear in Secretary Lansing's note of January 2, 1917, in which the protectorate was recognized by a simple State Department note. This Explained that consideration of altering our rights would have to take place later, as it would require Senate action and the Senate was too busy to undertake it. Both France and the Department of State know that there is no possibility of persuading the Senate, at full hearings, to give up our rights in Morocco. After 30 years of refusal, this subterfuge is being accepted with our ERP generosity as an excuse. All Americans and Moors in Morocco and the entire French population, with the exception of a few who profit with the controlling clique, agree to this. Mr. Moose was reminded of matters that should be remedied before further discussions with Moroccan authorities about American rights. These include conditions that the Department agreed should be accepted as a prerequisite to consideration of the protectorate's decree. Its opinion changed after being subjected to what the Department terms "heavy French pressure." These terms were reimbursement of all duties and taxes levied in excess of treaty rates and elimination of discrimination. Decision was to be after performance-not to be based on promises. The Department agreed to consider removal of openly anti-American officials. Certainly an official who has boasted publicly that he is opposed to Americans and intends to end their activities in Morocco should not be given additional powers by American consent, nor should he retain control of ECA funds. Retention of this man and his clique destroys American prestige and intensifies the opinion both of Europeans and natives that we are either weak or gullible or both. An agreement which requires an American to belong to the ex-Vichy syndicates (groupement) is inacceptable. We have been repeatedly assured by the Department of State that these syndicates are illegal in Morocco, that we need not join them or deal with them. None of the foregoing matters have been remedied. I showed Mr. Moose that Morocco's commercial deficit, $15,000,000 before the war, reached $100,000,000 (37,000,000,000 francs) in 1948. This was in spite of the fact that the country gained economically during the war and now is producing twice what she produced in 1938. The 100,000,000 deficit is largely financed by United States taxpayers who contribute a determinable $50,000,000 directly or through France and an indeterminate amount in goods that lose their identity while passing through France. It is certain that a return to the system of using only what her exports pay would benefit Moroccan economy and save the United States and France approximately $100,000,000. It is realized that Morocco had a $20,000,000 direct deficit last year with the United States. The sale of sardines alone would cover this if commerce in Morocco were freed. (Dollar figures for 1948 in this letter are based on the average practical rate, $1 equals 350 francs.) I explained that the freeing of commerce would not necessarily lead to a separation of Moroccan and French funds although everyone in Morocco considers that this separation is desirable. The liberalization of Moroccan economy in 1948 was accompanied by a 25 percent decrease in imports from the United States and by generally improved economic conditions, without separation of the two currencies. I demonstrated France's bad faith in claiming that the restrictions on American imports were to help franc balances. Independent Americans in Morocco did about $10,000,000 worth of business in 1948. Most of this was eliminated by the decree under discussion. More than $3,000,000 of it was ordinary cotton textiles. On the other hand, sugar and tea represented $15,000,000. Trade in those products, monopolies of powerful syndicates, was liberalized while trade in those usually dealt in by Americans was stopped. If France were in good faith in her statement that she wishes to protect her currency she would put identical restrictions on all products entering Morocco. Swiss watches, Czech beach sandals, Russian caviar and French champagne, brandy, pâté de foie gras, all have world values in dollars. These and other "miscellaneous manufactured articles" like jewelry and $500 evening gowns, consumed in Morocco, amount to $30,000,000 in annual value-three times the American business the French finance clique seeks to destroy. These are the real luxuries that ECA had in mind when it printed, "The competing attraction of inflation-fed demand in the French areas diverts goods which might otherwise have found foreign markets." Certain articles like chewing gum and candy have been singled out for comment, even on the Senate floor. Department of Commerce figures show that we shipped $246,000 worth of these in the second half of 1948. These articles are bought principally by 8,000,000 Moors, whose religion prohibits smoking. They amounted to less than the value of United States cigarettes imported by the politically backed tobacco monopoly, whose customers are approximately 700,000 Europeans. You have been informed repeatedly, with supporting quotations from speeches and editorials, that everyone in Morocco except a few profiteers and the Communist minority wish free economy in Morocco. The anti-American clique controlling Moroccan finances are blaming us for the current increase in regimentation, so that our meddling is deeply resented by those who normally think well of us. I hope you will give this matter a very thorough review that will include examination and appraisal of all of the material that has been conscientiously presented to you but consistently ignored by your Commercial Policy Division. I am sure that if you will do this you will come to the conclusion that from the points of view of sound economics, legality, and justice, our rights in Morocco should be maintained to the letter. Yours sincerely, ROBERT EMMET RODES. The CHAIRMAN. The committee will stand adjourned until Tuesday morning next at 10 o'clock, at which time the committee will meet in executive session. (The following statements were subsequently submitted for inclusion in the record:) AMERICAN FARM BUREAU FEDERATION, Hon. JOHN KEE, Chairman, Committee on Foreign Affairs, House of Representatives, Washington, D. C. DEAR CHAIRMAN KEE: The American Farm Bureau Federation has consistently supported international cooperation to bring about world reconstruction and recovery. We believe the principle expressed in H. R. 5615, "to promote the economic development of underdeveloped areas," is sound and will bring closer to realization this long-established principle which the American Farm Bureau Federation supports. I quote the following excerpts from the resolution on International Trade, adopted at the 1948 annual meeting of the American Farm Bureau Federation: "We should cooperate with other countries in encouraging the industrialization and development of underdeveloped nations. We believe that the International Bank for Reconstruction should render financial assistance wherever practical, especially to productive undertakings which cannot be financed by private enterprise. We also urge international cooperation to encourage private international investments in useful projects and the development of sound standards for safeguarding such investments." H. R. 5615 would authorize the United States to cooperate with other governments, international agencies, and with private agencies to promote the development of economically underdeveloped areas of the world by participating in programs "for interchange of technical knowledge and skills which contribute to the balance and integrated development of the economic resources and productive capacities of economically underdeveloped areas." This assistance would include, but need not be limited to, economic, engineering, medical, educational, and fiscal surveys, demonstration, training, and similar projects. Some fear has been expressed that we might develop these underdeveloped areas throughout the world and that they would become competitors with the United States for world markets. However, if due consideration is given to maintaining a proper balance between agricultural and industrial development in these countries, we believe this danger can be averted. In fact, it is possible that such a program will assist agriculture in developing sound long-time agricultural export outlets. Agriculture will be prosperous if the other parts of economy are prosperous. This program should facilitate and encourage the maximum participation of private enterprise and private investment. To this end, countries where programs of economic development are needed should take the necessary steps to encourage the use of private capital and utilization of technical assistance available in that country. Proposed projects should be carefully screened in order to select and concentrate the efforts upon those which offer the greatest promise of productive results. In order for the program to be effective and to develop long-lasting results, a prerequisite to such international assistance must be maximum self-help by the country to be aided. It should be a cooperative undertaking in which each country contributes the maximum toward promoting the programs, not only within its own boundaries but also internationally. A constructive, well-planned program to develop the resources of the underdeveloped areas to expand the trade and raise the standards of living and purchasing power will be one of the most effective means of preventing the spread of communism in these areas. Poverty and misery make fertile ground in which to plant the communistic doctrine. We believe a permanent-type program, such as that envisaged in H. R. 5615, will be far more effective in the long run than some of the temporary measures we have found so necessary during this postwar readjustment period. In the agricultural field, we believe that one of the most effective contributions the United States could make would be to assist other countries in developing a well-organized and well-trained agricultural extension service, made adaptable to each individual country. The extension type of approach tends to get at one of the basic weaknesses of many of these countries; namely, the lack of applied education. To the extent that intergovernmental participation is required, an effort should be made to coordinate this through the United Nations and its various specialized agencies so as to avoid duplication and conflicting programs. We therefore strongly favor the objectives of the program embodied in H. R. 5615, and urge that Congress authorize the participation of the United States with other nations in the development and carrying out of the program for economic development of underdeveloped areas. We respectfully request that this letter be made a part of the hearings now being conducted by the House Com mittee on Foreign Affairs. DEAR MR. CHAIRMAN: I enclose a statement on the President's Point IV which we would like to have made part of the hearings on this proposal. Yours sincerely, [Press release] BENJAMIN C. MARSH, ECONOMIST WARNE REPORTS ON 2 MONTHS' SURVEY OF EUROPE Dr. Colston E. Warne, economics professor at Amherst College, president, Consumers' Union, and vice president, People's Lobby, Inc., in an article in the October Bulletin of the Lobby, states, after a 2 months' survey in Europe: "It was obvious that a showdown battle is at hand between Catholic and non-Catholic political forces." Dr. Warne, who led a party in Europe this summer, as for several years, visited Holland, Belgium, Germany, Austria, Czechoslovakia, Italy, Switzerland, and France. His findings include: "More than ever before there is widespread acknowledgement that the $5,000,000,000 annual American expenditure for European recovery is proving only a palliative. "More than ever before, one became aware of the presence of Catholic power in the trade-unions and in the parliaments, and of the close linkage between foreign policy and the political aspirations of the Vatican. "With western Germany open for the first time to the tourist, one had an opportunity to observe at first hand the indecisive struggle which is going on over that crucial area and the manner in which American taxpayers are subsidizing the western Reich by a billion dollars a year in an effort to sustain the area as a bulwark against eastern Europe. "More than in preceding years one was able to observe the strides which are being made toward the unification of western Europe. "Even though knowledge of the Russian possession of the atom bomb was lacking last summer, there appeared in western Europe little enthusiasm over the Atlantic Pact. Europeans could understand and appreciate Marshall aid. They can, however, also appreciate the implications of being the front-line troops of a third world war, and hence are far more reserved in opinion concerning the merits of the plan than American newspapers would lead us to anticipate. "The Dutch situation appeared to bear a great resemblance to the British. Holland has had an immense military burden in Indonesia and no longer receives a heavy subsidy from foreign investments. There appeared little optimism on the part of the Dutch that they could reach the requisite self-sufficiency by the terminal date of the Marshall plan. |