of your future deliveries, tonnage sent to these named markets must be taken into account. I will make this clear to Mr. Outwater. 3. Paragraph 6, last sentence. I take this to mean that no Agreement must be made to control the amount of material sent by other countries to the United States. You will see that under this sentence material is specifically excluded if it is sold in the United States other than for export', (i. e., for home consumption), and again if it is 'sold for export to the United States' i. e. exports from Cartel countries or Great Britain. You will remember how insistent the Americans were that nothing should be done officially which would constitute restriction of imports to America and this is the clause that the State Lawyers insist on including to make sure that the Law is observed on this point." A la demande d'explications de M. Meyer du 16 mars, Mr. Elliot a répondu comme suit: "The 'Export Trade Act' referred to is the Webb-Ponerene Act, which can, we understand, be obtained at any American Consulate. This Act, in essence, permits American Companies to join together Law, which prohibits them from banding together on Home Trade. Therefore, Clause 6 in the Agreement with the Americans means that the United States and its dependencies-the Philippines, Hawaii, Alaska and Porto Rico-are not to be regarded as Export Markets, but are all classed together as the United States of America. This means under the Sherman Law, that no restriction is placed on sales in the United States or in its Dependencies. As you know, of course, we shall be having a verbal Agreement with the Americans to restrict Imports to the United States, and, therefore, the Dependencies as mentioned above also come under this restriction, and the calculations will be made accordingly. This explains why these Dependencies appear to be free in I. R. M. A. As regards Panama and Cuba, which are reserved areas in I. R. M. A., these are not actual Dependencies of the United States, and for the purposes of our General Agreement they may, therefore, be regarded as coming into the same category as any other Export market. Si nous nous reportons à l' "Export Trade Act" du 10 avril 1918, "an Act to promote Export Trade and for other purposes," nous lisons en effet: "Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the words 'export trade' for the purpose of Export Trade, as opposed to the Sherman Law wherever used in this Act mean solely trade or commerce in goods, wares, or merchandise exported, or in the course of being exported from the United States or any Territory thereof to any foreign nation; but the words 'export trade' shall not be deemed to include the production, manufacture, or selling for consumption or for resale, within the United States or any Territory thereof, of such goods, wares, or merchandise, or any act in the course of such production, manufacture, or selling for consumption or resale."1 Voir en annexe les commentaires des juristes à cet 'Act'.' On comprend, è la lumière de ces commentaires, pourquoi le contrat IRMA n'a pas cité les Dépendances des Etats-Unis pour les marchés protégés, cela aurait pu être interprété comme une restriction des importations dans les EtatsUnit et leurs Dépendances, contraire aux lois. Le Stahlwerks-Verband dit d'ailleurs à ce sujet : "In dem letzten Entwurf des IRMA-Abkommens vom 16.9.36 wurden als amerikanischer 'home market' ausser dem Gebiet der Vereinigten Staaten noch die Philippinen, die Hawai-Inseln, Alaska und Porto Rico angesehen. Allerdings ist dies aus den bekannten Gründen nicht verbrieft worden. En IRMA, pourtant, on a reconnu Cuba et Panama comme ‘marchés réservés.' Ceci n'est pas contraire aux dispositions antitrust et de l'Export Trade Act, puisque ces pays ne sont pas des territoires ou dépendances des Etats-Unis. EXHIBIT S-89A EXPORT TRADE Export Trade is defined in the Act (Section 1) as "solely trade or commerce in goods, wares, or merchandise exported, or in the course of being exported from the United States or any Territory thereof to any foreign nation. 1 See exhibit S-89A, infra, pp. 180-182. "That the words trade within the United States wherever used in this act mean trade or commerce among the several States or in any Territory of the United States, or in the District of Columbia, or between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or between the District of Columbia and any State or States." The definition is further limited by the provision that "export trade" shall not be deemed to include the production, manufacture or selling for consumption or for resale, within the United States or any Territory thereof, of such goods, wares, or merchandise, or any Act in the course of such production, manufacture, or selling for consumption or for resale. Export has been defined as the transportation of goods from this to a foreign country. Another country as the intended designation of the goods appears to be essential to the idea of exportation. The Act definitely excludes production within the United States, manufacture within the United States and celling for consumption or resale within the United States or its territories. TERRITORY AND INSULAR POSSESSIONS Territory may be defined as a portion of the country subject to and belonging to the United States which is not within the boundary of any State or of the District of Columbia. The importation of goods, wares or mechandise is not contemplated by the law, which modifies only the Sherman Act and the Clayton Act. The Wilson Tariff of 1894 as amended in 1913 declares illegal, with certain restrictions, every combination engaged in importing into the U. S. (Sections 73, 76 and 77). The debates in Congress show a decided intent to limit the law solely to export trade. From the debates it would appear also that Congress intended the law to apply to formation of selling agencies only. As expressed by Representative Webb (Congressional Record, June 13, 1911, and August 31, 1916), “It is not intended to be a manufacturing association. A manufacturing association cannot form one of these organisations because the language is this: "But the words "export trade" shall not be deemed to include the production, manufacture, or selling for consumption within the United States or any Territory thereof". The Bill is confined to export business, and such selling agency cannot be a producing corporation, only a buying and selling agency in export trade. The selling agency could not manufacture the raw materials because the bill forbids such agencies or corporations to produce anything." Trade within the United States when used in the Act is defined in paragraph 2 of section 1, as "trade or commerce among the several States or in any Territory of the United States, or in the district of Columbia, or between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or between the District of Columbia, and any State or States. The Status of various Territories therefore becomes important and may be summarized as follows: Puerto Rico.-Its status has been defined: "So it appears from every authority that can be cited, that Puerto Rico is substantially a territory of the United States, over which all the general laws of Congress properly applicable to territories, and not in terms locally inapplicable, are in full force and effect." (Peck 8. S. Co. v. N. Y. & P. R. S. S. Co., 2 P. R. Fed. 109). This case decided that the Sherman Anti-Trust Act was in effect in Puerto Rico. It follows, therefore, that the Export Trade Act, which amends the Sherman Act, is in force in Puerto Rico. Webb Law associations may, therefore, be formed in Puerto Rico but such associations may not export to Puerto Rico. Hawaii. Incorporated into the U. S. as "Territory of Hawaii" by Act of Congress of April 30, 1900. Webb Law associations may, therefore, be organized in Hawaii, but such associations may not export from other ports of the United States to Hawaii. Alaska.-Organized as an incorporated Territory of the United States under Act of Congress of August 24, 1912. Webb Law associations have, therefore, the same status there as in Puerto Rico, and Hawaii. Philippine Islands.-The Philippine Act of August 29, 1916, provides "The statutory laws of the United States, hereafter enacted shall not apply to the Philippine Islands except whenever so specifically provided." In absence of any authority to the contrary it would seem that the Exports Trade Act does not apply and that Webb Law Associations may not be organized in the Philippines. They are, however, possessions of the U. S. and Webb Law associations may not export to them from the ports of the United States. The Federal Trade Commission in its annual report of 1918 states: "It is apparent under the law that the provisions of the Sherman Law and Section 7 of the Clayton Law remain applicable as to all combinations which are not organized solely for the business of exporting to foreign nations. The business of exporting to the Philippine Islands, to Puerto Rico, or to Hawaii, seems clearly to be domestic and not foreign trade, and the provisions of the Sherman Law and Section 7 of the Clayton Law seem to continue in force as to any Association or export corporation which engages in such business." Furthermore, the Solicitor of the Department of Commerce in a ruling published in Commerce Reports, August 30, 1918, states that "in my opinion the Act of April 10, 1918, (Webb Act) does not apply to associations whose business may be confined to within the United States and its territorial possessions, such as the Philippines, Puerto Rico, Hawaii and Alaska." EXHIBIT S-90 BRITISH IRON AND STEEL FEDERATION AMERICA The American Representatives, Mr. Bash and Mr. Mundle, arrived in England two weeks ago, and have had three meetings with Mr. Elliot on the subject of the U. S. A. participating in the Cartel Agreement. The following is the general basis on which the Americans are prepared to negotiate: 1. The Americans cannot accept rigid export quotas based on their performance in 1934. They are, however, prepared to accept them as basis quotas if a reasonable margin is allowed up to which they may exceed without penalty, assuming they are able to do so within the normal price regulation, and without being required to quote protective prices: should their deliveries fall below the basis quotas normal compensation would be payable to them. By "protective prices" it is understood that the Americans would observe such price differentials as may normally be agreed, but that they would not be asked to afford protection, as provided for in the EIA/UK agreement, in order to adjust the statistical position between Groups. 2. Since the preponderating American share of Canadian Imports on a number of products might, in the event of a real recovery in Canada, altogether swamp their general quotas, they require liberty to exceed their basis quotas through sales in that market without any upper limit, thus providing the margin allowed for in (1) above. 3. In view of their expectation that the products of wide Strip Mills, which at present exist only in America, will tend to displace a number of other forms of steel products, and will create many new demands, a reasonable margin must be provided in their products to enable them to meet this anticipated demand without penalty. The details which the Americans propose are as follows: A. SEMIS, HOOP AND STRIP, WIRE RODS As shown on the attached Schedule the American 1934 basis quotas are: Semis Hoops & Tube Strip- Wire Rods They suggest liberty to exceed without penalty up to: Semis Hoops & Tube Strip1. Wire Rods. 3.5% 22.7% 12.0% 7% 15% 17% 1 A special provision is required for Canada under which the Americans supply the total Canadian Imports of Skelp (Tube Strip) except for 5,000 tons per annum. A separate arrangement will be made within this category for baling and barrel hoops, based on 1934 quotas with some latitude for the Americans, who ask for suggestions from the British Group. They suggest liberty to exceed their plate quota up to 8% without penalty. On Joists and Merchant Bars they require liberty to exceed by sales in the Canadian market without upper limit as long as their sales in markets other than Canada do not exceed the 1934 basis quota. C. SHEETS The American 1934 basis quotas are approximately: Black Galvanized They suggest liberty to exceed without penalty up to: Black Galvanized 14% 15% 19% 18% The Americans find it impossible to obtain figures of defective Skelp, Sheet Bars, Bar Slabs, and such other material as Plate cuttings, Bar and Structural ends, etc., since their Trade Returns class all this material as "Scrap." They suggest, therefore that these items should be completely excluded from the Agreement. The Americans also make the reservation that no penalty shall be applicable to them if they go into excess as a result of other groups being unable to deliver under the agreement. 17/2/37. EXHIBIT S-90A Steel exports in 1934-E. I. A. to markets other than cartel countries and U. K. and U. S. A. and U. K. to all markets EXHIBIT S-90B Steel exports for the 12 months ending 31.7.1936-E. I. A. to markets other than cartel countries and U. K. and U. S. A. and U. K. to all markets Steel exports-Annual rate based on 5 months August to December 1936-E. I. A. to markets other than cartel countries and U. K.-U. S. A. and U. K. to all markets |