Foreign Relations of the United States, Diplomatic Papers, 1933, General, Volume I

550.S1/911

The Consul at Geneva (Gilbert) to the Secretary of State

No. 602 Political

Geneva, May 24, 1933.
[Received June 7.]

Sir: I have the honor to state that there has recently been privately made available to me by the Polish Delegation in Geneva an “Aide-Mémoire Relative to the Attitude of the Agricultural Countries of Central and Eastern Europe at the World Monetary and Economic Conference”.²⁸ An English translation of this document, prepared in the Consulate, is transmitted as an enclosure to this despatch.

This aide-mémoire, I am informed by the Polish Delegation, has been prepared by the “Committee of Enquiry” of the so-called “Agrarian Bloc” of Central and Eastern European states and is destined to serve as a basis of discussion at a forthcoming conference of these states to take place in Bucarest commencing June 4, 1933.²⁹ The aide-mémoire has naturally been communicated to the governments concerned, but has not been given to the press. It is expected that at this Bucarest conference the interests of the countries constituting the agrarian bloc will be reviewed and an attempt made to concert their action as far as possible at the forthcoming London Conference.

It will be observed that, for the most part, this document constitutes an elaborate and detailed commentary upon the annotated agenda prepared by the Preparatory Commission of Experts for the Monetary and Economic Conference. It would appear that this study may therefore be regarded as at least indicative of the policy which may be followed by these states in London on certain phases of the questions there under consideration—subject, of course, to such modifications as may be made as a result of the meeting in Bucharest. I have thus felt that it would be of such value to the Department and to the American Delegation to have this material before them, as to warrant its translation and transmission, even at the risk of its having already been made available to the Department from other sources.

Respectfully yours,

Prentiss B. Gilbert

[Enclosure—Extract—Translation]

Aide-Mémoire Relative to the Attitude of the Agricultural Countries of Central and Eastern Europe at the World Monetary and Economic Conference

The aim of this report is to set forth the principal theses that the agricultural states of Central and Eastern Europe should support at the World Monetary and Economic Conference. As the “Annotated Agenda” prepared by the Preparatory Commission of Experts will serve as a point of departure for the work of the Conference, the authors of this Aide-Mémoire have limited themselves, in their comment, to emphasizing the questions presenting a particular importance for the agricultural countries. This method has appeared to be justified by the fact that the report, while making every effort to be objective, contains certain ideas contrary to the interests of the agricultural countries or is limited to formulating, without taking any definite position, theses which are opposed to these interests, particularly concerning such delicate questions as protective tariffs in industrial countries, derogations from the most-favored-nation clause, etc.

Under these conditions, it is evident that the Conference of Bucharest must necessarily define the agricultural point of view, with reference both to the chapter on the causes of the present crisis as well as in those which treat of the means of combating it.

. . . . . . . . . . . . . .

In summarizing the ideas set forth above, a general statement should first be made:

All of the financial and economic problems touched upon by the report of the experts must be approached and settled simultaneously, as there exists a close interdependence among them. The failure of efforts which have been made to the present on the international terrain can be explained by the fact that the problems have been approached singly in such a manner that the positive solutions offered were favorable to one group of countries and unfavorable to another and the countries harmed tried to defeat what was contrary to their interests. Only an action attacking at the same time all of the problems will finally assure to each country advantages such as will not put them in a position of having to oppose certain fragmentary solutions which would be unfavorable to them.

It is while insisting upon the capital importance of this general declaration that we propose the following premises for the Bucharest Conference:

(1) The settlement of inter-governmental debts is indispensable and should result in a reduction of charges both insofar as interest and capital are concerned.

(2) The freedom of the foreign exchange market and of the circulation of capital should be re-established as rapidly as possible. But the abolition of restrictive measures will only become possible for the states where they are in force if all of the conditions assuring stability are realized.

In those cases where exchange restrictions must be maintained for a certain [period?], they should in no way affect payments resulting from commercial exchanges.

(3) The policy of the central banks of the agricultural countries, while being based upon the principles established in this matter by the experts of the Gold Delegation, should have the flexibility demanded by the seasonal character of agricultural production.

(4) Monetary stability, an essential condition of all sound economic relations, should be maintained or reestablished as soon as possible. The agricultural countries categorically favor each country taking the necessary measures for diminishing budget deficits and practicing a sound credit policy.

(5) The efforts made by states in the national sense should be supported by an international action. It is indispensable that the monetary normalization fund, advocated by the Stresa Conference,³⁰ be realized as soon as possible and under such a form as to assure an immediate and real support for the central banks of the agricultural countries.

(6) An essential principle for the determination of relations between debtor and creditor states should be that “the policy followed by creditor countries should finally place the debtor countries in a position to pay off their obligations by means of goods or services”.

(7) The agricultural states vigorously support the following declaration of the experts: “In the case of certain countries which are heavily indebted abroad, more especially on short terms, a solution of the debt problem is necessary before their governments will be in a position to modify existing monetary policy.”

(8) The solution of the problem of the settlement of foreign debts in the cases where this settlement is necessary, is to be found in collaboration to this end between the debtors and creditors concerned.

In accepting the principle of individual settlement in each case, it will however be convenient, to facilitate the negotiations, to draw up a project of procedure for negotiations between creditors and debtors.

(9) In view of the necessity of a resumption of the normal movement of capital, any project for an international financial institution which could really contribute something should be supported by the agricultural countries.

(10) It seems opportune that the project for public works drawn up by the agricultural countries under the auspices of the League be re-examined by the countries concerned and that the agrarian bloc announce itself in agreement for certain projects tending to facilitate the commercial exchanges between the agricultural countries of Central and Eastern Europe.

(11) It is of primary importance that the agricultural countries of Central and Eastern Europe come to an agreement as to the attitude to adopt regarding the question of an abolition of prohibitions now existing on international exchanges—and notably that they express the hope of seeing this question settled at the International Economic Conference by means of an international convention for the abolition of import prohibitions and restrictions, a convention which would embrace at the same time the question of sanitary and veterinary prohibitions as well as those of certain problems particularly important for the agricultural countries in the field of indirect protectionism (milling restrictions for example).

(12) In view of the eventuality of a discussion on the international plane of the tariff problem in its entirety, the Bucharest Conference should draw up a plan of action which would be of a nature to protect particularly the interests of the agricultural countries and which would aim especially at the lowering of duties imposed in Western Europe upon the exportation of agricultural products.

(13) With reference to the problems of commercial policy which will probably be discussed at the international conference, the agricultural countries of Central and Eastern Europe should encourage the conclusion of an international agreement which would settle the question of the most-favored-nation clause. They should besides make their position known vis-à-vis a project for an eventual international agreement upon the permanent derogation to the most-favored-nation clause in favor of multilateral accords concluded under the auspices of the League of Nations.

(14) The agricultural states should concentrate all their efforts in order to safeguard the results of the Stresa Conference with respect to a preferential regime and to have them sanctioned by the World Economic Conference. They should also come to an agreement as to the position to take on the subject of a preferential regime in its entirety, including the question of its eventual extension to products which up to the present have not been included in the regime.

(15) Any effort for the reorganization of the international market of the principal products exported by the agricultural countries is in principle favorable to them and should be supported by them.

28. The Polish Ambassador to the United States had handed a copy of this pamphlet to the Secretary of State on May 16 (550.S1 Washington/500).
29. Composed of representatives from Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, and Yugoslavia, the Conference met June 4–6, 1933. Present as observers were representatives of Estonia, Greece, Latvia, and Turkey. For proceedings of the Conferences, see Conference des Represent ants des Gouvernements des États Agricoles de l’Europe Centrale et Orientate, Bucarest, juin 1983 (Bucarest, 1933).
30. Held September 5–20, 1932; see Report by the Stresa Conference for the Economic Restoration of Central and Eastern Europe, submitted to the Commission of Enquiry for European Union [Geneva, 1932].