662.7431/28
The Minister in Bulgaria (Sterling) to the Secretary of State
[Received July 7.]
Sir: I have the honor to refer to the Department’s circular telegram of June 17, 4 p.m., and my reply of June 19, 1 p.m.,8 and to submit [Page 492] the following supplementary information concerning the visit of Dr. Schacht to Bulgaria.
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If the concrete results of the visit were not important, there is no doubt that it caused a considerable stir in view of the general uneasiness due to the increasing concentration of Bulgarian trade in Germany. This tension was aggravated by a series of remarks of a political nature made by Dr. Schacht in the course of his interviews and speeches. Some of them are hard to explain, unless, as has been suggested, he did not attach much significance to the Sofia visit, and was in a state of pleasant relaxation—he made almost affectionate references to attachments made with Bulgaria during the war when he served with the provisioning board—after the more trying negotiations in Belgrade and Athens. Especially resented was the attitude that Bulgaria was in effect a German colony, and that this country should so direct its productive energies as to supply the goods which will be most useful in the event of war, Bulgaria naturally to be allied with Germany. His principal speech, as summarized in the press, had received the generous attention of the censor, and was too disjointed to give any clear view of his thought. As reported by persons present, his thesis seems to have been that Bulgaria is historically and economically complementary to Germany; that the economic doctrines of Germany would best serve Bulgaria; and that Bulgaria should supply herself with industrial equipment from Germany, continue the satisfactory progress in the production of vegetable oils and other technical crops, and make another effort to exploit what mineral resources are available, all against future political developments in this part of Europe. In developing the theme of German economic doctrines he pointed out the risks to be incurred from contact with countries with weak and depreciated currencies—specifically the United States!—to which he joined a warning against confidence in, or expectation of support from, the League of Nations.
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Officials of the National Bank, the Ministry of Finance and the Export Institute have followed with interest the development of the American policy of trade agreements, and agree with it in principle. They would like, of course, to be set free from the clearing agreements which restrict their export trade, but do not see their way clear to remove the earlier evil, the foreign exchange restrictions. They hold that the volume of trade between the United States and Bulgaria is so small, amounting to only 1.2 percent of Bulgarian commerce in 1935, that adherence to the American policy would be disastrous unless Central European countries can be induced to join the movement.
Respectfully yours,
- Latter not printed.↩