611.5731/209

Memorandum of Conversation, by Mr. Hugh S. Cumming, Jr., of the Division of European Affairs

Participants: Mr. Wilhelm Munthe de Morgenstierne, The Minister of Norway,
Mr. Sayre, Assistant Secretary of State,
Mr. Bryn, First Secretary of the Norwegian Legation,
Mr. Cumming, Division of European Affairs.

At Mr. Sayre’s request Mr. Morgenstierne called this afternoon at three o’clock to receive the Department’s reply to the informal proposal [Page 633]which the Minister had made last fall for the exchange of Norwegian whale oil for surplus American wheat. The Minister brought with him the newly appointed Secretary of the Legation for the purpose of introducing him to Mr. Sayre.

Mr. Sayre referred to the Minister’s proposal (which the Minister interpellated to explain was actually the proposal of Mr. Hans Bull) and said that careful study had been given to it by the Department. The conclusion had been reached, however, that since it was essentially a barter transaction it did not seem appropriate for this Government, or at least for the Department of State, to lend any aid to the furtherance of the transaction. Although there was of course and could be no objection on the part of the Government to any arrangement which might be arrived at through private negotiation between the whale oil people in Norway and the wheat people in the United States, Mr. Sayre went on to say that in his opinion barter transactions were dangerous first steps for any country, and more particularly for a small country, since they led to further restrictions on international trade, whereas this Government was making every effort to broaden the scope of such trade.

Mr. Morgenstierne remarked that his Government, too, did not believe in principle in barter transactions, but the exclusion of Norwegian whale oil from the American market through the prohibitive American duty and excise tax had forced this whale oil into the German market. This in turn was one of the reasons for the Norwegian-German clearing agreement which increasingly compelled the Norwegians to buy German goods. In this connection Mr. Morgenstierne mentioned his fear that the market in Norway for American automobiles was steadily giving way to increased imports of German cars.

Mr. Morgenstierne mentioned that it had been hoped that some way could be found by which the duty and excise tax on whale oil imported into the United States could be set off against any export subsidy which might be paid on wheat sent to Norway. Mr. Sayre explained that the question of export subsidies on wheat was a matter which would have to be discussed with the Department of Agriculture.

[Discussions respecting a trade agreement between the United States and Norway apparently were not continued.]