862.504/350: Telegram

The Secretary of State to the Ambassador in Germany (Dodd)

114. Embassy’s despatches No. 20, July 24, No. 120, September 1,4 and No. 130, September 7, 1933. Article 8, Treaty of 1923, provides in effect that merchandise of each contracting party within the territory of the other shall receive same treatment as native merchandise in respect to bounties.

By Section 2 of Law promulgated June 2, reduction in taxes is allowed purchasers in Germany on basis of their purchasing equipment of German manufacture. This amounts to a bounty in respect to merchandise of German manufacture. Reduction in taxes is not granted to purchasers in Germany on basis of their purchasing equipment manufactured in the [Page 468] United States. A bounty in respect to merchandise manufactured in the United States is withheld.

In granting bounty in respect to native merchandise and in withholding bounty in respect to merchandise manufactured in United States, German Government is discriminating against merchandise of American manufacture in respect to a bounty contrary to the terms of Article 8.

It is declared in the first sentence of Article 7 of the Treaty that there shall be freedom of commerce and navigation between the two countries.

Freedom of commerce can not exist and purpose of Treaty can not be accomplished in the face of legislation having the design and effect of the law promulgated June 2.

Communicate foregoing to German Foreign Office and urge immediate and effective removal of discrimination against American trade.

Hull
  1. Despatch No. 120 not printed.