611.5431/127a: Telegram

The Secretary of State to the Minister in Switzerland (Wilson)

10. With respect to Stucki’s question about the difficulty of reaching a trade agreement with the United States on account of the uncertainty of future value of the dollar, it should be noted that the same, or perhaps greater, uncertainty prevails with respect to the future value of the currencies of gold standard countries. Realizing this fact, it is our thought that there would be contained in the agreement a provision that in the event of any wide variation in the rate of exchange between the currencies of the United States and of the foreign country, the Government of either country, if it considers the variation so substantial as to prejudice the industries or commerce of the country, shall be free to propose negotiations for the modification of the trade agreement, or to terminate it in its entirety on 30 days’ notice. The thought is that should the depreciation of the other currency prove to be moderate, presumably there would be no need for renegotiation or for termination of the agreement.

Hull