611.6231/408
Memorandum by the Secretary of State
The German Ambassador called and renewed his inquiry and his earnest request in regard to early negotiations between our two governments to agree upon a reciprocity trade arrangement. The Ambassador offered nothing especially new in support of his request, which he renewed with much urgency, except that economic conditions were extreme and it was correspondingly important and urgent that the two nations should take some step in the direction of increased trade with each other; that this would not only offer encouragement, but it would lead to additional steps at an earlier stage than would otherwise be possible.
I replied that for some time I and my associates have been giving steady attention to the question of our trade relations with such countries as Germany, England, Canada, France and others; that we are and have been examining every phase of the financial and trade relationships between ourselves and these other countries, including Germany; that of course we are as desirous as any country of the speediest possible restoration of the international trade that has been strangled during past years by excessive restrictions; but that thus far we have not reached a stage where we have been in a position to take up negotiations with such countries as Germany and the others I have just named. I stated that southern and central and western Europe are on a steady decline economically; that their ever-narrowing quota, clearing house, and other artificial, arbitrary, and shortsighted devices are choking what little trade and finance between those countries still remain; that the United States would have little to gain to abandon its program, which contemplates an ever-broadening movement extending to a steadily increasing number of countries, for the restoration of international trade and general economic rehabilitation and fall in behind the continental countries of Europe [Page 444] and other parts of the world in the pursuit of their present hopelessly unsound and shortsighted and suicidal economic policies; that some important country must proclaim and keep alive the broad and sound commercial and general economic policies through the operation of which alone improved business and industrial and trade relations can be brought about; and that for the United States to abandon all other methods of restoring trade and finance with other countries, except such clearing house and even balances of trade methods between each two countries having business with each other, would be both unwise and hopeless so far as pursuing a course calculated to improve these economic conditions was concerned.
I did not undertake to make any commitment as to just when actual negotiations could be taken up by the Government of the United States with that of Germany. I classed Germany with England, Canada, and France in this respect. The Ambassador did not undertake to give me any definite points, suggestions, or details showing where it would be specially to the advantage of the United States to undertake further trade arrangements with Germany, either by intimating that they would meet payments involved or that they would at any particular time be prepared to meet any part of existing indebtedness due the American Government and American nationals. I called attention to the fact that Germany has today the highest level of wholesale prices of any country in the world and that of course was undertaking to maintain a 40 cent mark which Americans would be obliged to buy in order to pay for German goods, notwithstanding the par value of the mark of 24.8 cents. I concluded with the statement that whenever this Government did see its way clear to proceed with conversations with such governments as Germany, England, Canada, etc., we would be prompt to so advise the officials of each of those governments.