561.311F1/159: Telegram
The Chairman of the American Delegation to the Monetary and Economic Conference (Hull) to the Acting Secretary of State
[Received July 19—12:35 p.m.]
153. For Wallace from Morgenthau. Agreed July 18th with Danubian countries on export quota for first year of 54,000,000 bushels and 50,000,000 for second year. Former was compromise between our demand for 50,000,000 and their demand for 57,000,000. Yugoslav and Bulgarian representatives stated they would have to get approval of Governments. At conclusion Rumanian raised question of preferential treatment for Danubian wheat in European markets and stated in principle Danubian States could not renounce preference for first year and at end of year would examine position to see if price had risen sufficiently to compensate for renouncing preference for second year. Preferential treaties now in effect would continue. They also wished to reserve right to enter into regional agreements which might involve preference on wheat. Argentina is much opposed to preferential treatment of Danubian wheat.
If this question of preferences becomes a leading one I would recommend more conclusive instructions as to what position we should take. I would recommend on condition that the Danubian countries cooperate otherwise in the achievement of a general agreement the United States accept the idea of preferences to be extended solely for the period of the agreement and for strictly limited quantities of wheat (the quantities to be no greater than the normal export of Danubian wheat to the respective importing countries). Our safeguard would be in the agreement on the part of the Danubian countries as regards their total export quota. We would not agree to preferences unless the Danubian States in return were willing to make further concessions as regards total export quotas.
Meeting was then held with Russians obviously anxious to participate in general arrangement but claimed they had very large crop this year possibly equal to 1930 and would need much higher quota than 25,000,000. Would doubtless compromise on intermediate figure but wanted to know possibility of receiving collateral loan for 2 or 3 years on around 25 to 50 million bushels in order to hold back that narrow margin exportable surplus above quota.
Subsequently another meeting was held with the importing countries at which representatives of France, Italy, Great Britain and Germany expressed their desire to cooperate. They indicated their willingness to reduce tariffs as prices should rise. All were of the opinion, however, that some time would be required to consider the details.
[Page 815]The original committee of overseas exporters now augmented by Danubian States, Russia and all importing countries begin meeting this morning under chairmanship of Morgenthau. [Morgenthau.]