The Consul General at Berlin (Messersmith) to the Secretary of State

No. 1273

Sir: I have the honor to refer to my strictly confidential despatches Nos. 1233 of April 11, 1933 and 1243 of April 18, 1933, with reference to the interference with the treaty rights of American firms in Germany.…

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In addition to the conversations which I had had with Staatssekretaer Bang and Ministerial Director Dr. Posse set forth in the despatches Nos. 1233 and 1243, I had had the opportunity to discuss this matter with Dr. Bang later at a luncheon given by Dr. Schacht in the Reichsbank, and Dr. Bang assured me that everything was being done; but he could give no definite assurances as to what actual action was being taken. As the patience of these firms was becoming exhausted and as it was obvious that the longer this situation was allowed to continue the worse it would become and the more difficult it would be for the Government to correct it, I felt it desirable that the matter should be brought to the attention of Minister Goering who, if he so wished, could see that the proper orders were issued by the Party.

I therefore called on Staatssekretaer Milch who is the head of the Aviation Ministry and who is one of the men really enjoying the confidence of Minister Goering and in whose opinion he really has confidence, on the afternoon of April 28. I placed the whole situation before him and Dr. Milch immediately realized the importance of it and the necessity for action by the Party. He dictated a memorandum to Minister [Page 427] Goering in my presence, in which he stated in very direct and plain language to the Minister that he felt sure he would wish to take the necessary measures at once to have the Party organization informed that interference with American firms must be stopped. Dr. Milch assured me that Minister Goering realized that the treaty obligations of Germany in every respect must be kept and that he wished them kept and would see that they were respected. He thanked me for the way in which this had been handled and expressed real appreciation of it and stated that enough mistakes had been made in connection with the Jewish question so that the Government and leaders of the Party were anxious to avoid further mistakes. He assured me that the necessary steps would be taken by the Party to have this interference with American firms stopped. A memorandum covering the conversation with Dr. Milch is transmitted herewith70 and certain parts will probably be found of special interest.

The Consulate General is not able to state how rapidly the necessary action will be taken by the Party to stop this interference with American firms, or how far it will go; but we now have the official assurances of the German Government that certain action would be equivalent to treaty violation and that it has not come from the Government, and we have what I believe is a real declaration by a responsible member of the Party that such action would be treaty violation which they wish to avoid and that the necessary steps will be taken. The Consulate General will keep in close touch with the situation and if it is not evident that the necessary action is being taken by the Party and that the interference with American firms stops, I am of the opinion that we should not exercise further patience but should inform the Department that the time has arrived for it to make representations of the strongest character through the Embassy to the German Government. I believe that the course followed up to the present has been the best one in every way to achieve the protection of our interests and I still believe that direct representations can be avoided.

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There is much reason to believe that among the many matters discussed between Prime Minister Mussolini and his advisers and Minister Goering during the latter’s visit to Rome, was this interference in private business of all kinds by the Party leadership and by individual Party members in Germany. This I am informed, had been brought strongly to the attention of the Italian Government by its representatives in Berlin who saw in it grave dangers not only to German business, but also to the future of the National Socialist Party. It is at least interesting in this connection that following the return of Minister Goering from [Page 428] Rome a decided change has been apparent in this matter. Up to that time Party leaders, groups of S.A. men, or in some cases a single S.A. man had placed Kommissars in businesses and this had been going on without direct interference from the central Party leadership and if not approved by it, was at least tolerated. If appearances can be judged since April 25, active and energetic steps are to be taken to see that no more Kommissars are placed in businesses except under the instructions of the liaison staff of the Party in Berlin, and all unauthorized Kommissars are to be removed.

The interference with American business firms in Germany has come, I believe it may be said in every single case, from German competitors who wish to use the opportunity of the accession of the Party to power to get business which they have not been able to secure in any other way. This is apparent in practically every single case which has come to the attention of the Consulate General and is particularly clear in the case of the German picture companies which are trying to exclude the American companies from this business. There is reason to believe that the highest leaders of the Party now realize that the Party cannot make the business difficulties and the competitive weakness of every firm in Germany which seeks to use the Party, its own business. There are indications, as set forth in this despatch and in the appended memorandum, that this question of interference with American firms is gradually reaching a satisfactory solution; but this cannot blind one to the fact that the spirit of Germany is now so highly nationalistic in every way that foreign firms or foreign owned German firms will have a harder road to travel in Germany than heretofore.

Respectfully yours,

George S. Messersmith
  1. Not printed.