611.6331/165
The Department of State to the German Embassy
The Secretary of State acknowledges the receipt of the communication of the German Ambassador dated April 14, 1938, requesting that the instructions issued to the Treasury Department by the President April 6 to remove the word “Austria” from Section 2 of the President’s letter of March 15, 1938, regarding the application of the tariff concessions [Page 504] in the trade agreement concluded with Czechoslovakia be changed to bring it about that the country of Austria is left on the list of those countries enjoying the tariff concessions of the Trade Agreements Act until such time as the German Government notifies the Government of the United States of the time at which the German tariff and exchange regulations will be extended to Austria. The Ambassador’s communication has received careful consideration.
The letter of the President to the Secretary of the Treasury dated April 6 to which the Ambassador refers as published in the American newspapers on April 7, 1938, has since been published in printed Treasury Decisions issued April 14, 1938, with Treasury Decision 49502. This action was taken pursuant to the provisions of the Trade Agreements Act of June 12, 1934, as extended by joint resolution of Congress, approved March 1, 1937, and amends Treasury Decision 49458 published in printed Treasury Decisions issued March 24, 1938. The most pertinent provision of the Trade Agreements Act reads as follows:
“The proclaimed duties and other import restrictions shall apply to articles the growth, produce, or manufacture of all foreign countries, whether imported directly, or indirectly: Provided, That the President may suspend the application to articles the growth, produce, or manufacture of any country because of its discriminatory treatment of American commerce or because of other acts or policies which in his opinion tend to defeat the purposes set forth in this section; and the proclaimed duties and other import restrictions shall be in effect from and after such time as is specified in the proclamation.”
On March 14, 1938, the German Ambassador, under instructions of his Government, notified the Government of the United States80 of the Reich law of March 13, 1938, concerning the union of Austria with the German Reich, which provided in part that “Austria is a State of the German Reich”. On March 17, 1938, the Minister of the Republic of Austria informed the Department of State81 that Austria had ceased to exist as an independent nation and had been incorporated in the German Reich. On April 5 the State Department notified other Departments of the United States Government that for all practical purposes the disappearance of the Republic of Austria as an independent State and its incorporation in the territory of the German Government must be accepted as a fact, and on April 6 the American Ambassador to Germany informed the German Government82 in the same sense and stated that consideration was being given by the Government of the United States to the adjustments in its practices [Page 505] and procedure in various regards which would be necessitated by the change of status of Austria. It is in this relation that the President’s letter of April 6 directed the elimination of Austria from the list of countries to the products of which the duties proclaimed on March 15, 1938, in connection with the Trade Agreement signed on March 7, 1938, with Czechoslovakia, and all other duties theretofore proclaimed in connection with trade agreements (other than the trade agreement with Cuba signed on August 24, 1934,83 and the trade agreement with Nicaragua signed on March 11, 193684) signed under the authority of the Trade Agreements Act shall be applied.
In view of the above-stated facts regarding the incorporation of Austria into the German Reich, the Government of the United States does not regard as conclusive on, or even as pertinent to, the execution of the Trade Agreements Act the extent to which German tariff and exchange regulations have been extended to Austria. It may be remarked, however, that prior to the action taken on April 6, it had been reported to the United States Government that by a law published on April 1, 1938, the Austrian Minister of Finance was authorized to reduce or abolish customs rates on German products entering Austria from other German territory and such reductions would not be applicable to third countries, while Austrian products have been admitted to other German territory duty-free by decree effective March 28. The Austrian Ministry of Finance had also published on March 25, 1938, a notice that the State Government had issued a foreign exchange decree which assimilates the principles of already existing Austrian regulations to the German foreign exchange regulations. It was announced that the foreign exchange office in Vienna would allot foreign exchange for payment of all imports legally contracted before March 18. It was also announced that Austrian foreign trade figures for February and thereafter would not be published but would be incorporated in and considered a part of German trade figures. It was evident that Austrian trade and payment regulations were being progressively assimilated to the Reich regulations and the effects were immediately felt on American trade.
The action taken under Treasury Decision 49502 was a necessary practical adjustment to the change of status of Austria, in a situation where action was important for the information and guidance of persons engaged in trade between Austria and the United States. The Decision provides the customary period of notice, and is not effective until May 6, 1938.
- Communication not printed, but see memorandum by the Under Secretary of State of conversation with the German Ambassador, March 14, vol. i, p. 442.↩
- See telegram No. 27, March 19, 3 p.m., to the Ambassador in Germany, vol. i, p. 456.↩
- See telegram No. 34, April 5, 6 p.m., to the Ambassador in Germany, vol. i, p. 473.↩
- Foreign Relations, 1934, vol. v, p. 169; for correspondence, see ibid., pp. 108 ff.↩
- Department of State Executive Agreement Series No. 95, or 50 Stat. 1413; for correspondence, see Foreign Relations, 1936, vol. v, pp. 782 ff.↩