Memorandum by the Assistant Secretary of State (Rogers)

During a conversation with Dr. Leitner of the German Embassy on other matters this morning, I said I wanted to see the Ambassador on the matter of the preference treaties if he could conveniently stop in. The Ambassador has been ill, is very weak, and was just leaving for the West, so Dr. Leitner called in his behalf.

I recited the substance of the first two paragraphs of our number 26, March 18, to Berlin, stating that we had never given any expression in regard to the German preference treaties with Rumania and Hungary; that we felt that our affirmative consent was required before these preference arrangements should be put into effect as distinguished from mere acquiescence or silence; that as the treaties had not been put into effect at the time originally contemplated, we assumed they had been dropped because of objections from others or changes in the German policy; that we had just heard that they were now proposed to be put into effect; that they must not interpret our silence as being approval. I said we were clear that while there might have to be some reconstruction of the tariff difficulties in Eastern Europe, we felt that the principle of our treaties with Germany should be maintained; that we had there an agricultural market which was of importance; that the basic principle of our most-favored-nation treaty policy ought not to be abandoned in [Page 341] the case of the stronger nations of Europe and that we were not inclined to see it abandoned.

I said the purpose of my informal communication today was not to file a protest, but rather to inform the Embassy here that we had already said to the American Embassy in Berlin that they should not let our failure to file a formal protest be interpreted as approval or acquiescence.

Dr. Leitner expressed great surprise and some polite indignation. He said that he did not know whether the treaties were about to be put into effect or not, but he had been advised by his Government that Argentina, Russia, India, and Turkey had objected and that all these objections had been adjusted. He did not know how they had been adjusted when I asked him, but said he understood that Argentina, having failed to object to French preferences, felt herself in no position to object to the German preferences. I said we would take the same position with French preferences that we took with German ones.

I asked Dr. Leitner whether the preferences given to Hungary and Austria had been granted to India and the others, and he said he did not know what adjustment had been made with them. He said Russia had withdrawn her disapproval and given an affirmative consent, but beyond knowing that the Argentine relation had something to do with the Argentine-French situation he knew nothing of the adjustments. He said that in view of our long delay and failure to express ourselves that Germany had assumed we would not protest and he wanted to know if this was a protest. I said we thought an affirmative assent was required; that I was not for the moment protesting, but that I was warning him that we did not expect to vary our policy with Germany and that until we consented we thought the preference treaties were improper in view of our mutual obligations.

Dr. Leitner pleaded briefly that the treaties were intended to be relief for the Eastern European states; that relief was necessary and that we ought not to stand in the way. I said we appreciated that some relief was necessary for Northeastern [sic] Europe, but that this did not seem to be any comprehensive or substantial solution of the problem in any case. He said then, all we can say is that we ask you to withdraw your protest and consent to the treaties. I said this is the first time you have asked us anything as distinguished from simply conveying information. Do you want now to ask for consent? He said no; he would withdraw that statement and ask his Ambassador what steps should be taken. He said he would notify his Government at once. He asked if this meant closing off discussion of [Page 342] the question. I said no; that we would be very glad to discuss it with him at any time but it was intended to convey a general attitude and policy not because we had been asked to express one, but because we felt that in spite of our silence they were planning to act. He asked what had occasioned this notification and I said it was the fact that for the first time we learned that Germany was planning to put the preference treaties into effect, contrary to our previous understanding of the course of events.

Dr. Leitner mentioned pending purchases of wheat by the German Government and said this indicated an intention to maintain Germany as a market for our agricultural products. He hinted without saying that this policy might affect their plans to purchase wheat.

J[ames] G[rafton] R[ogers]