611.6231/1094
The Ambassador in Germany (Wilson) to the Assistant Secretary of State
(Sayre)
[Extracts]
Berlin, November 10, 1938.
[Received
November 26.]
Dear Frank: I am writing to you as the
Assistant Secretary of State in charge of trade agreements and
economic matters, but I am writing you personally because the matter
which I have to present is brought to me in a personal and informal
method.
Dr. Rudolf Brinkmann is what is known here as Secretary of State for
the Economics Ministry, which would be the equivalent with us of
Under Secretary of Commerce. Actually he is the executive head of a
huge Ministry, which closely regulates and directs not only the
greater part of business and industrial activity in the Reich but
German foreign debts and foreign exchange as well.…
. . . . . . . . . . . . . .
I have gone somewhat at length into the man’s character and thoughts
because he has submitted a suggestion to us. I haven’t the faintest
idea as to whether we can regard the suggestion as practicable. In
its present form it is frankly a trade balancing device based on a
currency not having free international circulation. Indeed, if I
read aright the present temper of the United States, it would be
difficult for any grounds to be found by which German-American trade
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could be encouraged.
Hence perhaps all speculation along these lines is premature. Of
this, however, the Department will be better judge that I can be.
Nevertheless, Brinkmann is the influence in German economic life
which is the most friendly to us and should be kept this way by all
means in our power. I would say that at the present time, with
Schacht’s partial retirement, he is probably the strongest single
influence towards liberal economic development and organization in
the Reich. I might add that he has also endeavored to use his
position toward putting the brakes on the economic despoliation of
the German Jews and that with his Minister, Funk, he is trying to
work out some solution whereby at least refugees from race policy
can transfer with them some substantial part of their holdings. In
fact his outspoken disapproval of racial persecution in social
gatherings has caused some apprehension among his friends lest it
should imperil his position.
Thus whatever the fate of his suggestion, I hope that an answer can
be given him which is friendly and interested in tone, and which
will encourage him to continue to devote his real ingenuity
eventually to finding a ground we could consider perhaps as a common
one for our two systems.
Brinkmann emphasizes that his suggestion is a purely personal one. He
states definitely that he has not spoken to Göring about it. It is
in the nature of an exploratory adventure. He asks that it be kept
confidential since he has not even mentioned his idea of an
“American Mark” to the Reicksbank, which eventually would have to be
consulted.
The suggestion takes the form of two letters to me, dated
respectively October 31 and November 5. (I suggest that the latter
be read first, as it is perhaps of more general character).
Brinkmann himself suggested, after sending me his first letter, that
this be withheld until he could supplement it with some further
thoughts.
. . . . . . . . . . . . . .
With warm regards [etc.]
[Enclosure 1—Translation]
The State Secretary, German Ministry of
National Economy (Brinkmann), to the American Ambassador (Wilson)
Berlin, October 31, 1938.
Dear Mr. Wilson: Referring to our
conversation, I am sending you herewith the brief memorandum I
mentioned, which contains my personal ideas with regard to
stimulating German-American trade by
[Page 429]
creating an America-Mark. I would
appreciate it if you would let me know if you consider it
advisable to forward it to Mr. Hull in a suitable, non-official
form. At the same time I would request that he be told that this
is not a proposal of the German Government but involves my
personal ideas.
With best regards [etc.]
[Subenclosure—Translation]
Memorandum
I.
The international economic crisis affected trade between Germany
and the United States with particular severity. While the United
States still exported in the amount of approximately 1.8 billion
reichsmarks to Germany in 1929, exports in 1937 barely reached
approximately 300 million RM. Germany was one of America’s best
customers for agricultural products. The decline in American
exports to Germany therefore contributed substantially to the
difficulty in marketing American agrarian products. On the other
hand, Germany is interested in importing American agrarian
products, although she is able to import agrarian products from
other countries, e. g. from the Balkan countries, if they cannot
be imported from America. Moreover, the industrial products of
both countries complement each other in various respects, so
that it would be possible along this line also to expand
German-American trade. In view of this situation it would seem
to be in the interest of both countries to restore the normal
volume of trade between the United States and Germany as nearly
as possible.
II.
The chief difficulty in the way of such normalization of American
trade is the discrepancy between the level of American and
German prices. This is a result of the unilateral devaluation of
the dollar. Germany has been trying to compensate for the
devaluation of the dollar by adopting means of promoting
exports. At the request of the American Government, this
procedure was stopped. Another means of bridging the
difficulties would be to consider the creation of a so-called
America-Mark. In principle, this would mean that in trade with
Germany the dollar would be computed at its former parity, i. e.
at 4.20 RM.
III.
If the America-Mark were introduced, the technical transaction of
trade between the two countries would be along the following
lines:
[Page 430]
- 1.
- When exporting to Germany American exporters continue
to invoice in dollars at normal prices. The German
importers convert the amount in dollars at the rate of
4.20 RM and pay the resulting reichsmark amount into a
German bank account in favor of the American
exporters.
- 2.
- The reichsmark credit balance created in this way can
be used, as a matter of principle, for purchases of any
German goods at normal German prices; that is to say,
there would be no selective classification of German
goods.
- 3.
- The reichsmark credit balance (America-Mark) can be
sold to other American interested parties by the
American exporters, in which case the rate of 4.20 RM
for the dollar would be used as a basis.
- 4.
- Assurances would be given that any interested American
(firm) or German (firm) can participate in the
procedure.
IV.
The arrangement described above would mean a step in the
direction of a freer mode of international trade. The
restrictions to trade created by foreign exchange control would
be considerably relaxed. From this angle, the above proposal
might be regarded as a step in support of America’s efforts to
reestablish free international trade.
[Enclosure 2—Translation]
The State Secretary, German Ministry of
National Economy (Brinkman), to the American Ambassador (Wilson)
Berlin, November 5, 1938.
Dear Mr. Wilson: In addition to the
memorandum which I sent you containing my personal ideas
concerning the introduction of an America-Mark, I would like to
state the following:
- 1)
- The introduction of the America-Mark is to be regarded
merely as a transitional measure. In my opinion the
ultimate solution should necessarily be the complete
reestablishment of free trade, with deliveries of goods
being paid for on both sides in free foreign
exchange.
- 2)
- Since any German goods whatever could be purchased at
any time with the America-Mark, the latter would furnish
the American exporter a guarantee that his export claims
in Germany would not freeze up. By means of technical
arrangements, provision would be made to the end that
German importers would purchase only such amounts of
American goods as can be paid for in the America-Marks
resulting from American purchases of goods.
- 3)
- No funds whatever for facilitating exports would be
used for goods purchased with the America-Mark in
Germany. Thus the
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request of the American Government
that subsidies be abolished in connection with German
exports to the United States would be fully-complied
with.
- 4)
- Among other things, wheat, lard and, to a certain
extent, fruit would be purchased with America-Marks. In
this way the excessive supply of agricultural products
on the American market would be considerably reduced by
the introduction of the America-Mark.
With kind regards [etc.]
