611.626 Wines/10: Telegram
The Ambassador in Germany (Dodd) to the Secretary of State
[Received February 21—8:45 a.m.]
40. Department’s 23, February 18, 5 p.m. In general, Embassy, Consulate General, Commercial and Agricultural Attachés endorse connecting the action regarding wines and spirits with German treatment of American goods and agree that a redefinition of most-favored-nation rights is theoretically desirable though doubting its practical efficacy.
This subject must be examined from numerous angles. For instance our commercial treaty expires next year. This and British ditto are now outstanding types of unconditional most-favored-nation clause instruments, a form to which the German economic authorities have publicly expressed definite opposition. Again discrimination against American goods appears in various forms besides monopoly purchase and quotas; for example, in quibbling interpretations of the treaty that are contrary to its spirit; restriction in allocation of foreign exchange in making payments; and in intimidations of purchasers of foreign articles in general as a result of prevailing internal political sentiment.
In view of doubt whether a mere interpretation of most-favored-nation treatment would cover the whole ground it is suggested that [Page 408] the Department make no definite proposals until receipt by mail of complete survey now under preparation.
Am forwarding today in my despatch 553 of today’s date97 outline of scheme proposed by Schacht98 for financing 2-year cotton purchases in greater quantities and higher values with the United States Government assistance on the basis of reduced yield on German bonds. He requests prompt consideration with a view to April meeting of bondholders representatives and (specially confidential) in the hope of keeping Germany on gold standard.