862.48/126: Telegram
The Commissioner at Berlin (Dresel) to the Secretary of State
[Received (April 9?) 9:27 a.m.]
291. For your information and to be transmitted to Norman Davis of the Treasury Department, and Julius Barnes, United States Grain Director. Taylor advises me as the result of consultations with the appropriate ministers that the food program up to the next harvest is as follows:
Germany intends to cover her requirements in meats and dairy products by purchases from the surrounding neutral nations and has several credit negotiations to this end under way. Unless especial offers of credits are to be made by American packers she will place no further orders until autumn. Bread grain requirement until the new crop is only 200,000 tons of wheat. C.i.f. offerings from Argentina are being accepted in small amounts but not to exceed 100,000 tons in all. This low figure is a statistical surprise because our crop figure of 9,000,000 tons bread grains is correct. The 200,000 tons is believed to be sufficient to maintain present ration until September 1st. Recent developments have increased prospects of domestic stocks. The Kapp fiasco, which had all the landowners behind it, has taken the temper and resistance out of the large and small landowners and they are not in a position to resist requisition. [Page 280] The Socialists and combined labor unions have made it a stipulation that a proper requisition shall now be applied, and this is in process of execution. It therefore seems that a more drastic requisition will be made than ever before, which has the effect of reducing import requirements and also of diminishing illicit trading. This small amount of wheat the German Government would like to purchase from the United States either through credits, or when advised that these were improbable, through use of Liberty bonds or other securities and values in the hands of our Enemy Property Custodian. It is believed that recent London resolution gives them this right so far as Reparation Commission is concerned but the formal authorization will still be required in our country. Are you able to exchange wheat for Liberty bonds? The denominated amount would have to leave New York by June 1st. Believe that German Government should be informed through American Commission, Berlin, and German financial agent through Logan, in Paris, for the purpose of consultation with Shipping and Reparation Commissions as promptly as possible.