The Minister in Austria ( Messersmith ) to the Secretary of State

No. 995

Sir: I have the honor to refer to my confidential despatch No. 949, of November 6, 1936,3 in which I reported a conversation which I had with the Secretary of State for Foreign Affairs, Dr. Schmidt, and in which conversation he expressed the opinion that the time might have arrived when the Austrian Government could consider taking the initiative in opening conversations with our Government for the conclusion of a trade agreement under our Trade Agreements Program. In this despatch I expressed doubt as to whether Austria was yet in a position to undertake such conversations with us, and ventured the opinion that this matter was one in which we for the present should not take the initiative. I went into my reasons for this opinion in considerable detail.

The trade relations between the United States and Austria have been developing during the last few years in a satisfactory manner. Our exports to Austria have slowly, but steadily increased, and Austria’s exports to the United States have increased. The development of our [Page 6] trade with Austria has been an index of the better internal situation in Austria. There have, however, been some minor discriminations against American goods which I deemed it advisable to bring to the attention of the Foreign Office, as I considered that this movement, if not stopped, might create unfavorable background for the eventual negotiation of a trade agreement. I therefore called at the Foreign Office on December 11th and had a long conversation with Dr. Wildner, of the Economic Section, and brought to his attention certain developments, principally with regard to apples, moving picture films, roadside gasoline pumps, and rice. I have covered my conversations with Dr. Wildner about these matters in my despatch No. 994 of December 16, 1936, with respect to rice, and No. 987 of December 11, 1936, on motion picture films.4 These despatches may be found of interest in connection with this one.

During the course of my conversation with Dr. Wildner the question of Austria undertaking conversations with our Government for the conclusion of a trade agreement arose. I said that I had discussed this matter with the Secretary of State for Foreign Affairs some weeks before. Dr. Wildner said that he was very much interested in our Trade Agreements Program, but expressed the opinion that the time was not yet ripe for Austria to initiate conversations on this subject. The situation in Central and Southeastern Europe, he said, was still too unsettled.

I had an appointment, after seeing Dr. Wildner, to see the Secretary of State for Foreign Affairs, Dr. Schmidt, in order to leave with him copies of the President’s and of the Secretary’s speeches at the Buenos Aires Conference.5 I took occasion to tell the Secretary that I had just had a long conversation with Dr. Wildner on certain minor discriminations against American trade, and mentioned that Dr. Wildner had also taken up the question of a trade agreement. Dr. Schmidt replied that he regretted that the circumstances were not such yet as to make it advisable for Austria to take the initiative in this matter. I said that I quite appreciated this situation, but hoped that the time would soon arrive when such conversations could be initiated. I believe from what Dr. Schmidt and Dr. Wildner told me there will be no initiative by the Austrian Government for the present.

As this question of a trade agreement was raised by both Dr. Schmidt and Dr. Wildner, and as the conversations took place on the eve of the negotiations with Germany for a new Austro-German trade agreement, I thought it desirable to take this opportunity to give both of them further information concerning our Trade Agreements Program. [Page 7] I am transmitting herewith a memorandum covering my conversations with Dr. Schmidt and with Dr. Wildner,6 which, I believe, the Department will find of interest. Both of them have expressed a very keen interest in our Trade Agreements Program, and are, I believe, now quite fully informed with respect to its objects. I have the definite feeling that both of them would like to see Austria initiate conversations leading to such an agreement with us, but realize that until Austria’s relationships with some of her neighbors are cleared up, the negotiation of a trade agreement with us would be very difficult.

. . . . . . . . . . . . . .

Respectfully yours,

George S. Messersmith
  1. Not printed.
  2. Neither printed.
  3. For texts of speeches, see Department of State, Press Releases, December 5, 1936, pp. 423 and 432.
  4. Not printed.