611.6231/1044: Telegram
The Ambassador in Germany ( Wilson ) to the Secretary of State
[Received 8:50 p.m.]
387. State Secretary Brinkmann, who under Goering is active head of the Economics Ministry, will deliver Wednesday evening, August 17, the address before the American Chamber of Commerce in Berlin which was the subject of my letter to the Secretary of June 28.83
I am informed by the Chamber that the initiative for the meeting came from Brinkmann himself who suggested that it would be timely for him to address the Chamber in favor of better trade relations and if possible a trade agreement between Germany and the United States.
Advance copies in translation of the address have been furnished to the American correspondents. The following is a résumé of the principal features of the address which I feel may be regarded as a considered answer from the German Government to our presentation of economic relationships. It is of course requested that this be kept confidential until August 17 about 10:00 o’clock p.m. Berlin time.
Admitting that an important cause of the decline of German-American trade is the general deterioration in world trade Brinkmann states that German-American relations are burdened by other circumstances “which can be characterized as a result of misunderstandings which still have to be cleared up.”
He then proceeds to set forth the following four “misunderstandings” entertained in the United States with regard to German trade and other policies:
1. “Americans feel that the German policy of debt regulation discriminates against them.”
He asserts that no one has greater interest than the Germans in meeting contractual services on German loans since “we know that many of the subscribers to the loans were actuated by the laudable motive of helping us.” There are however he says “always times in the lives of nations when facts are harder than the good will which tries to overcome them. For the fact that it was no fault of ours that [Page 423] we became poor in foreign exchange is today probably uncontestable. The insanity of political tributes robbed us not only of a very sizeable foreign exchange reserve but also contributed to the complete collapse of German business. It was absolutely necessary for us to use every means available including foreign exchange control to eliminate mass unemployment. The existence of the nation was at stake. However, despite our great lack of foreign exchange we could not bring ourselves to stop the transfer of our debt service completely; but we saw ourselves forced to make the extent of this transfer dependent upon the concessions which our partners were willing to grant us in the field of trade. We have many times endeavored to persuade the United States in the interest of the debt service to open her markets to a greater degree to German goods. For in the long run people will come to realize that a state which wishes to collect interest and amortization must give its debtors an opportunity of earning such interest and amortization. If a state does not wish to do this it has only the choice either of postponing its claim for an indefinite period or of reducing the amount of its claim. Therefore I should like to express the hope that the United States will in the future give this viewpoint more consideration and that in the end a solution will be found along the lines I have mentioned that will permit an improvement also in the service of our debt to the United States.”
2. “A further misunderstanding of our situation and of our aims is the following reproach: ‘the Germans with the aid of a very complicated procedure are conducting a policy of dumping on the world market.’”
“If one regards as dumping a very simple procedure which indeed aims at the maintenance of competitive ability but nevertheless also endeavors to maintain world market prices and if possible even to increase them then I do not know how all those methods are to be characterized which, without any consideration of the situation of the world market, have cheapened exports of a country from one day to the other 20, 30 or even more per cent in the terms of another currency. Of course, we realize that the purpose of the United States in devaluing the dollar was not to secure for itself price advantages on the world market but was undertaken merely for internal economic reasons; nevertheless, it cannot be denied that this devaluation hurt our sales chances on the world market considerably. And if in addition to these difficulties German goods exported to the United States are subject to high special compensatory tariffs which to be sure were canceled again some months later and to anti-dumping tariffs it is hard to escape the impression that the main reason for the imposition of these tariffs not to be found in the sphere of economics.”
On our side, in any case, there was never any intention of conducting any sort of dumping policy through our price adjustment measures which were forced upon us by the devaluations of other countries. On the contrary we have always respected the world market prices as far as possible and moreover believe that we have considered American creditor interests since the possibility for the realization of blocked balances in Germany was increased.”
3. “Americans see a discrimination in the German trade policy as based on Schacht’s ‘new plan.’
The situation in which German business found itself before the introduction of the new plan was extremely serious. Current foreign [Page 424] exchange receipts were by no means sufficient to pay for even the most urgent requirements for foreign raw materials and the increase in the arrears in foreign commodity debts was becoming more and more threatening. A continuation of this would have meant giving up our economic right of self-determination. Moreover, it was in our mind a simple matter of commercial fairness no longer to import goods when the prospects for payment within a definite time did not exist.
Not a whim but the most bitter need forced us to direct our trade relations more towards the principle of bilateralism. Whoever was ready to accept our goods in payment did not have to worry about the sale of his raw materials.”
“Therefore we thought we were justified in believing that the American Government, like the governments of other countries, would be willing to give greater consideration to the principle of bilateralism in trade with Germany, a hope in which we were unfortunately disappointed. On the contrary, Germany appeared on the ‘black list’ of the American Department of State, which, after the recent disappearance of Australia, it now adorns in lovely grandeur. However, since recent American trade policy has been characterized by a remarkable elasticity as expressed, for example, in the recognition of the foreign exchange control system of Brazil, and more recently of Italy, we would like to express the hope that this welcome departure from rigid dogma will also benefit future German-American trade discussions. The only technical difficulty for a new modus vivendi might be seen in the determination of the ‘representative period’ which would have to form the basis for the setting of the foreign exchange quotas for imports. However, with good will it should not be difficult to come to an agreement here.”
4. “Among the arguments used against us one special argument must be mentioned which, though not of an economic nature, is nevertheless a strong influence in international economic relations. One often hears the following: ‘reject the German “Weltanschauung”.’
This, we cannot and do not wish to prevent, for we have stated [very clearly and]85 very often that National Socialism is not an article for export and that we do not wish to force understanding for our Weltanschauung upon anybody. We have only the desire to be left alone to solve our own problems just as we on our side are ready to respect at all times and without reservation the national forms of life of other countries.”
Brinkmann then refers to the complementary character of the two economies and “German potential purchasing power for American commodities.” He recalled that Assistant Secretary Sayre recently “stated that in 1927 Germany bought from the United States of America 2¾ million bales of cotton, but in 1937, barely ¾ of a million bales.”
“[As regards]85 cotton, Germany is undergoing a process of adjustments, for, if she cannot buy American cotton, she must buy other countries.
“I want to point out that before the war by far the largest part of American cotton exports went to Bremen, that is to say, not only the [Page 425] needs of France, but also the requirements of the border states and of the eastern and southeastern countries went there. In my opinion it would be very unfortunate, looking at the situation not only from present circumstances but casting a glance into the future, if the position formerly held by Germany as a buyer of American goods, a position which Germany would willingly resume, should not only suffer through the unsatisfactory relations between the two countries but even disappear entirely.”
“I want to make the statement right now that Germany, because of its position as fabricator of textile goods, could easily buy 3 to 4 million bales of cotton from the United States each year, surely a quantity which should mean something to the American cotton producer.”
“Germany can also purchase not only metals and finished products, but other things, goods of which the United States has an over abundance. Think only of the amounts of wheat, lard, canned meat and fruit we can buy, if reasonable trade relations can be established between the two countries. I am not at all worried in the long run about liquidating these imports through German exports, for so huge a market as that of the United States can take a few hundred million marks worth of German imports without any difficulty. To be sure, it will be necessary to prepare the technical procedure but with good will on both sides this can be done, and can be done quickly.”
He asserts that size and stability of German import demand for American products would “be of excellent service in surmounting internal American difficulties as expressed especially in the unemployment problem.”
In conclusion he states: “We are filled with a sincere desire” that a German-American economic understanding “come about as soon as possible” and he called for the cooperation of the Chamber to this end, closing with the following statement.
“For in carrying on foreign trade, we are building, as President Roosevelt so pertinently expressed it, an ever securer foundation for economic well being and are strengthening at the same time the foundation of enduring world peace, which is so essential to the continued progress of civilization and to the well being of the people of every land.”
Please convey appropriate portions of the foregoing to Agricultural Attaché Steere now on leave in Washington. Also please repeat pertinent portion to Treasury from Heath.
- Not found in Department files.↩
- Corrected on basis of text of speech in translation forwarded by the Ambassador in Germany in his despatch No. 302, August 20; received September 2.↩
- Corrected on basis of text of speech in translation forwarded by the Ambassador in Germany in his despatch No. 302, August 20; received September 2.↩