662.116/1163: Telegram
The Ambassador in Germany (Dodd) to the Secretary of State
[Received September 30—10:40 a.m.]
153. Department’s 119, September 28, 5 p.m. I fully realize the far reaching principles involved in this case and that is why the Embassy has taken it over and urgently asked for instructions.
In the absence of Neurath19 I last night took up the question with Bülow20 to whom I feel sure the question would have been referred in any event.
Bülow flatly rejected our contention that a failure to give us a proportional prune quota would constitute a contravention of paragraphs 2 and 4 of article 7 of our commercial treaty. In fact he showed no disposition to attempt to work out some reasonable solution of the problem but said categorically that his Government could not consider modifying its position on this prune quota.
On the broader aspects of the question, unfortunately, Bülow was in effect equally impervious. While he did say that the institution of this prune quota did not necessarily mean that Germany intended to adopt a series of absolute, as distinguished from proportional, quotas he asserted that there was nothing in the terms of our commercial treaty obliging Germany if she should adopt a quota to make it proportional rather than absolute; his Government took the view that its obligations under the treaty were fulfilled by granting a nation with most-favored-nation treaty rights the same absolute quota as might be granted to a third party.
Bülow further stated that this was the first time that any government having a treaty with Germany similar to ours had contested the right of Germany to adopt an absolute rather than a proportional quota. This assertion can I believe be specifically challenged.
Bülow added that like other countries Germany now was obliged to adopt a hand to mouth economic policy which she would have to maintain at least until the dollar and pound should be stabilized and in the meantime she could give no commitments as to her quota policy.
[Page 482]Altogether I regret to report that Bülow gave every appearance of having a completely closed mind on this subject and his attitude would indicate that we likewise can scarcely expect favorable action with respect to our representations as to the violation of article 8 of our commercial treaty (see Department’s 114, September 21, 6 p.m.).21
I must record my belief that desired results from the German Government will only be attained through fear of retaliatory measures rather than by argument no matter how seasoned and forceful.
The note which the Embassy has been requested to send to the Foreign Office (see my 148, September 2 [22], 5 p.m.) is merely a formal administrative designation of the customs offices in Hamburg and Bremen through which the 8,000–ton quota automatically available to us should be cleared. Would it not be advisable for the Embassy now to send this note as a mere matter of immediate practical assistance to American prune exporters; if Department desires note could be amplified to recite the reservations of our rights and our claim in principle to a higher proportional quota.
Further report by mail.