662.11173 Barley/42: Telegram

The Secretary of State to the Chargé in Germany (Poole)

[Paraphrase]

111. Reference your 215 of October 23, 10 a.m., and your 217 of October 24, 1 p.m. You will remember that the Department’s 99, October 6, 6 p.m., instructed you in discussions with German Foreign Office to make it clear that this Government, without being apprised fully of sound scientific and technical grounds for German Government’s taking action, would view either an absolute embargo or temporary restrictions as a serious matter.

Although deferred for the present, the threatened embargo is understood still to remain as a definite possibility. The German Government’s adoption of such a drastic measure before the investigation under way in Germany has been completed and its results communicated to this Government would appear, in view of the Department’s information as below outlined, to be arbitrary and unjustified.

The German Government so far has submitted no evidence to this Government to establish that American grade 2 barley has been the cause of hog sickness in Germany, though such sickness after the feeding of barley can scarcely be doubted. It is important, on the other hand, to note that the Department of Agriculture here, wishing to determine scientific causes of this reported sickness of hogs in Germany and following imposition of the present German restrictions, promptly instituted a series of rigorous tests, feeding, chemical, and bacteriological, of American barley for export. Samples of barley of the grade 2 variety, destined for shipment to Germany and other countries from United States Atlantic seaboard ports, has been used for the purpose of these tests. Results have thus far been purely negative in these tests. Particularly the feeding tests show no ill effects whatsoever to hogs after feeding on grade 2 barley.

Imposition of an absolute embargo might, without well-established scientific findings of recognized authority, lend color to belief held in various quarters that German Government’s action is more influenced by financial and economic factors which developed in connection with barley imported into Germany than by scientific considerations. However, the German Government’s natural desire to protect [Page 916]German agriculture by taking all appropriate measures is appreciated. Available information here as to financial and economic phases of situation tends to support the view mentioned above and is as follows:

(1)
Many German importers, especially at Bremen, apparently made heavy contracts for barley shipments when prices earlier this year were high. These contracts became onerous to them, it seems, following the subsequent drop in barley market. German importers have endeavored in various ways, according to indications here, to escape contractual obligations. They have hoped, it has been suggested furthermore, that a means might be found through imposition of either an embargo or restrictions to allow them to escape from contracts. It has also been suggested in this connection that the taking up unconditionally of shipping documents by Hamburg importers, unlike the attitude of Bremen importers, perhaps is due to their obligations being less onerous than those of Bremen importers.
(2)
Department is informed that, despite American grade 2 barley being allegedly noxious in character, importers in Germany, Holland, and elsewhere in Europe are continuing to offer to purchase American grade 2 barley for shipment from North Atlantic ports at current lower market prices.
(3)
According to further information received, rejected American barley is being purchased at prices only slightly under the current market in Bremen and elsewhere, nor has any ill effect from use and consumption of such barley been reported in Germany.
(4)
Moreover, Department learns that dealers in West Germany have even protested to the German Government against imposition of any restrictions as unbearable to the West German trade. As reported, these dealers are not encumbered by contracts assumed by many other importers, especially in Bremen it seems, at earlier high prices, and consequently they are able to buy at favorable prices now. Thus protest was made about October 1 by the Dortmund Corn Exchange, on behalf of Dortmund, Duisburg, Essen, and Paderborn exchanges, and by the Society of Corn Traders in the Rhineland and in Westphalia and by the Society of Wholesale Corndealers in Muenster.

The above statements in numbered paragraphs are based on what are thought to be reliable data furnished by responsible American exporters to Department of Agriculture and to this Department. However, you should carefully verify them and cable a report as to whether these statements are confirmed by your own information.

Representations in the sense of this telegram are not now desired, but you may wish in informal conversations with German Foreign Office to keep the above considerations in mind. Should an emergency arise, however, in which in your judgment immediate action is required, such representations as you deem appropriate, based on this telegram, are authorized, unless the information herein contained is, you have reason to believe, incorrect.

Kellogg