The Ambassador in Germany (Sackett) to the Secretary of State
[Received May 23—4:15 p.m.]
99. Your 54, May 21, 2 p.m. As Embassy had made it clear to Foreign Office in the informal conversation (see my telegram of March 8, No. 51) that the Department of State had not acquiesced in proposed arrangements whereby cereals from Rumania and Hungary would be granted preference by Germany and, as in your telegram 26, March 18, 4 p.m., you stated that you were representing your point of view to the German Ambassador, I thought it preferable to await further developments before duplicating here your démarche in Washington.
This morning Dr. Wiehl of the Foreign Office confidentially showed Wiley the telegram received by the Foreign Office from the German Embassy in Washington following Mr. Rogers’ conversation of March 21. The telegram stated that Mr. Rogers had made it clear that the American Government had not acquiesced in the proposed preferential arrangements but that his representations were not in the nature of a protest. Wiehl explained that the procedure adopted by the German Government towards all countries concerned had been shaped in order to overcome technical obstacles (the advice of the Senate) which it was expected might be encountered with the American Government, as the Executive might find it difficult if not impossible to consent explicitly to an abrogation of treaty rights. The Foreign Office therefore entertained the hope that the absence of a protest from the American Government would enable the German Government to conclude the arrangements without embarrassing or offending the American Government. The German Government assumed that diminished interest in forcing grain exports from America would incline the American Government to a benevolent point of view especially as the arrangements specified that Rumanian and Hungarian grain exports to Germany would not exceed the average of recent years and that their acreage would not be increased.
At present the situation was, according to Wiehl, in substance as follows: The German Government was expecting in the near future an acceptance from the Hungarian Government of the proposed preferential arrangement for wheat imports. Negotiations with Rumania have been held up because of Rumania’s hesitation under French pressure. Rumania objected to the proposed 2-year period as being excessive. The German Government then suggested a 1-year period. However, as the French preferential arrangement with [Page 345] Rumania is to run for at least 3 years the Rumanian Chargé d’Affaires has just been informed that the German Government now expects the Rumanian Government to accept the 2-year period without further objection. The German Government is expecting a reply from the Rumanian Government in the very near future. A protest from the American Government would upset the entire scheme which has been in preparation since last year and according to Dr. Wiehl is not only of considerable economic importance to Germany but of great political significance as well and the proposed arrangements with Rumania and Hungary, he privately explained, constituted the keystone of German opposition to the Tardieu Plan for the Danubian states. For the preferential project to go askew on the eve of Lausanne73 would place the German Government in a most serious dilemma. He therefore expressed the fervent hope that the American Government would refrain from any official protest which might result in handing over “the Danubian and Balkan states to the lure of French gold” to offset which Germany could only offer the consumptive capacity of her domestic market.
As from Wiehl’s remarks it was clear that the German Government have proceeded in this matter on the basis of a supposed tacit understanding with the American Government it was informally explained to him this morning that the State Department’s refusal to acquiesce in the proposed arrangements does not preclude us from a formal protest. Wiehl replied that the German Embassy would be telegraphically instructed to take the matter up anew with the Department.
In my opinion the political significance to the preferential arrangements was not exaggerated by Wiehl. These agreements constitute one of the foremost points in German foreign policy. A formal protest of the American Government now might be interpreted by the German Government as unduly retarded and as putting Germany in an extremely difficult position.