811.114 St. Pierre, Miquelon/151
Memorandum by the Assistant Chief of the Division of Western European Affairs (Hickerson)
Mr. Garreau-Dombasle17 came in to see me yesterday and stated that he had in the last few days been talking with Mr. Graves18 of the Treasury Department respecting a possible modification of the proposed bottling regulations of the Treasury Department; he said that Mr. Graves intimated to him that the Treasury Department would probably be able to alter these regulations in the sense desired by the French Government if the French Government would take effective steps to prevent the use of St. Pierre-et-Miquelon as a smuggling base. Mr. Garreau-Dombasle said that his Ambassador had been very much impressed with the logic of our note of November 9, last, on this subject and that he had forwarded this note to the foreign office with a recommendation that the French Government, in its own interest as well as in an endeavor to help us, take steps to prevent smuggling from these French islands.
Mr. Garreau-Dombasle said that he would appreciate it very much if I could give him some suggestions of action which they could take to bring about the desired end. I replied that numerous possible steps would undoubtedly occur to the Colonial Ministry, and that I was somewhat reluctant to advance suggestions on the subject; I went on to say that since, however, he had in an informal way requested me to, I was glad to mention the following steps which might very well be taken. I stated that it seemed to me that a most obvious solution would be to establish some correlation between imports and domestic consumption in these islands. I pointed out that at the present time there is such a low import duty on liquors and alcohol [the latter constituting almost the whole of the present problem],19 the practice is to pay the duty on importations brought in with the full intention of transshipping them to smuggling vessels destined to the United States. I went on to say that he knew, very well, our views on the quota system, and that I would be the last person to suggest any extension of their quotas, but that in the present case it might very well occur to them that a quota on alcohol for-the islands of St. Pierre-et-Miquelon would be the most practicable solution. I added that there was, I understood, practically no demand in the islands for alcohol for local use. I went on to say that it would also be particularly helpful if the French [Page 404] Government could make arrangements with the local authorities in St. Pierre-et-Miquelon whereby the latter would refuse to permit certain vessels from clearing with cargoes of liquor or alcohol; I added that our Treasury Department keeps an up-to-date list of vessels known to be engaging in the smuggling trade and that we would be glad to furnish the Embassy currently with copies of this list.
Mr. Garreau-Dombasle said that Mr. Graves had mentioned to him the desirability of landing certificates showing that cargoes had been legally landed in a foreign country. I told him that the requirement of such certificates would be helpful but, in my opinion, less so than the steps which I had outlined above. Mr. Garreau-Dombasle thanked me and said that he would send a report on this to his Government, making it clear that the suggestions had been made informally at his own request.
As an illustration of the extent to which the traffic in alcohol is adversely affecting the interest of foreign legitimate producers I called Garreau-Dombasle’s attention to a recent press article about the illicit manufacture and counterfeiting of French cognac labels in the United States. This article stated that the representative of a French cognac firm purchased a bottle of what appeared to be his company’s product in each of three hundred liquor stores in the United States and upon analysis found that over half of these products were spurious.