Office of the Historian

600.0031 World Program/123: Telegram

The Acting Secretary of State to the Ambassador in Germany (Dodd)

Washington, May 25, 1937—4 p.m.

51. Your 111, May 21, 10 a.m. Dr. Schacht has apparently received a most inaccurate report of our discussions with the Brazilians. These discussions have naturally taken place since the time is approaching when consideration may be given to the question of reopening negotiations with respect to the Brazilian-American Trade Agreement.25

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1.
The Brazilian Government has been informed that this Government in no way wishes to seek a limitation of German-Brazilian trade so long as it is based on the regular lines of economic interchange and does not subject the trade of other countries such as United States to exceptional and uneconomic competition. On the contrary it welcomes the expansion of Brazilian commerce with other countries on a sound basis and accordingly hopes that Brazil will endeavor to conclude a trade agreement with Germany based on liberal principles.
2.
Extraordinary competition from German goods has resulted in displacement of American trade even in lines where American products have proven themselves able to hold the field against all ordinary competition. Therefore it was suggested to Brazil that in any commercial agreement into which it should enter it should seek to discourage subsidized imports, particularly in those lines which are customarily supplied to Brazil by other countries.
3.
No threat of the character conveyed in your communication was made (Department assumes that the reference to our purchases of “copper” was intended to be purchases of “coffee”).

The Department believes you should correct Dr. Schacht’s impression.

The impact of such bilateral arrangements as Germany has compelled other countries to enter as the price of entry into the German market presents a difficult problem of adjustment for American commercial policy.

Welles
  1. For text of Agreement signed February 2, 1935, see Department of State Executive Agreement Series No. 82, or 59 Stat. 3838; for correspondence regarding negotiation of the Agreement, see Foreign Relations, 1935, vol. iv, pp. 300 ff.↩