862.51/4066: Telegram
The Ambassador in Germany (Dodd) to the Secretary of State
[Received June 19—3:15 p.m.]
113. I delivered message contained in your 74, June 16, 3 p.m., to State Secretary von Buelow yesterday as Minister for Foreign Affairs could not see me till this morning which would have been late in view of announced publicity.
I strongly emphasized importance of principle of no discrimination as between creditors. State Secretary indicated that endeavor would be made to arrange for additional payments to different creditors on the understanding that they should take more German exports. Such agreements he held would not entail discrimination as it would be open to any creditor country to make similar arrangements. He cited with approval recent editorial of New York Times in favor of reasonable treatment and against reprisals.
In the matter of lard imports (see Department’s 68, May 28, 8 p.m.55) the question of discriminatory treatment is also deeply involved. I have spoken with Foreign Minister and with Minister of Economics in regard thereto. Both of these expressed ignorance of this particular case and complained of the difficulties with which they are faced in such matters by reason of extreme nationalism of radical elements in the Government. They seemed to look for solution in [Page 366] agreement with Washington to increase German exports to the United States claiming that in the absence of such agreement the policy of those who wished to make Germany economically self-sufficient would prevail. I replied by indicating probable reluctance of Washington to negotiate new agreements when existing ones were disregarded.
As far as the reply to my written communication left with the Minister for Foreign Affairs is concerned, in which the current American and Danish lard quotas were specifically contrasted, no answer yet received. Representative of Foreign Office began by stating orally to Commercial Attaché that larger amounts could be imported if payment accepted in untransferable marks. This it was pointed out was illegal. Next a note was sent analyzing American lard quota and claiming in general terms that other countries were similarly restricted. Latest interview at the Foreign Office revealed disposition to protract examination of Danish figures submitted by the Embassy and to claim that purchases by monopolies are exempt from most-favored-nation clause. Commercial Attaché learns that these purchases by monopolies will soon be applied to oil, lumber and tobacco. He further ascertained that instructions have been given [?] Ministry of Economics to raw-material importers committees to develop intensive propaganda in Pacific and Southern States towards creating sentiment for purchase German-manufactured goods specifically iron and steel.
Foregoing attitude is due to desperate exchange situation but idea also seems to prevail that pressure placed upon American imports will compel negotiation of more favorable agreement.
It is difficult to recommend any effective line of action to counteract this policy. Continued protests to Government officials show little hope of results. Action taken with a view to stimulating reaction of German pride such as denunciation of commercial treaties or extensive publicity might strengthen hand of more reasonable elements here but not enough to effect immediately useful results. Abrogation treaty would hardly suit us.56 Publicity would enlighten public at home but would also create additional unproductive bad feeling.
Bad crops, expected failure of German self-sufficiency program in fats, textiles and oil, expected shortage of raw materials, may in a few months develop more accommodating spirit.