The German Ambassador (Luther) to the Under Secretary of State (Phillips)
Mr. Under Secretary of State: By order of my Government, I have the honor to inform Your Excellency of the following, with reference to my note of July 25, 1936:
The German Government has taken measures to the effect that neither the use of the scrip and bond procedure will be permitted nor will the payment of a public or private premium or subsidy or the use of other German currency than Reichsmarks freely convertible into foreign currency or Reichsmarks freely utilizable in Germany be allowed in connection with the direct or indirect exportation of dutiable goods from Germany to the United States of America, in so far as such exportation takes place or may take place on the basis of agreements which were concluded on or after August 3, 1936.
After the explanations of Mr. Brinkmann, Director of the Reich Bank, it appeared advisable to the German Government to eliminate the uncertainty created by the decision of the Treasury Department of the United States of America of June 4 (T. D. 48360) by a comprehensive measure for the whole field of German exportation to the United States of America. However, this will result in another sharp decline in German exports to the United States of America. This decline will not be without an automatic reaction on imports from the United States of America into Germany. The German Government deplores this additional unfavorable development of the trade between the two countries. It has not desired this development, as is evidenced by the trade statistics for the last three or four years. If a further decline in the trade between the two countries has, as it appears, become unavoidable, this is to be attributed only to the latest decisions of the Government of the United States of America.
The German Government herewith repeats its protest against the ruling mentioned, made by the note of June 15, 1936.