611.6231/518: Telegram

The Chargé in Germany (White) to the Secretary of State

10. State Secretary Posse, ranking next Schacht97 in Ministry of Economics, has ruled that a proposed 100,000 mark barter transaction whereby Burroughs adding machines and parts should be traded for German dolls, toys and small hardware destined for Kresge stores, plus 30 percent additional German shipments payable in dollar exchange, could only be allowed if four times value of American products were taken in German wares on the ground that Burroughs products are not raw materials but finished goods.

Informed that Schacht himself, while he makes it a rule not to discuss such matters with agents of foreign firms, would be willing to do so with representatives of the United States Government. American firms interested would like Embassy to approach him. Such action would however appear at variance with Department’s telegram 132, November 24, 3 p.m.;98 any plea of discrimination against American goods would be met by statement that advantages accorded other countries are based on trade agreements; it is logical to suppose that if Germans are indifferent to loss of fresh orders for their own goods [Page 439] they will not be moved by other arguments. On the other hand as their negative attitude may in part be attributable to keen desire for trade treaty with the United States—exclusion of competing article believed not to be involved—it might perhaps be useful to profit by the occasion to inform Schacht of the figures elaborated in the analysis of our 1932 trade with Germany made by the Tariff Commission99 under Costigan Resolution1 and to be found in very confidential memorandum attached to instruction number 316, November 26.2

Please instruct.

  1. Dr. Hjalmar Schacht, Minister of Economics.
  2. Not printed. This telegraphic instruction stated: “We doubt the advisability of the Embassy making inquiry of the German Foreign Office for list of goods subject to barter together with particular ratios.” (662.116 Autos/16)
  3. U.S. Tariff Commission, An Analysis of the Trade between Germany and the United States, March 1934.
  4. Congressional Record, vol. 76, pt. 3, p. 2754.
  5. Not printed.