662.116 Lard/22: Telegram

The Ambassador in Germany (Dodd) to the Secretary of State

104. My 94, May 22, 5 p.m.; Department’s 68, May 28, 5 p.m. Presented aide-mémoire to the Minister for Foreign Affairs in person June 1st pointing out that very bad impression created in the United States by unannounced preferential deals entailing violation of treaties would render mutual trade negotiations desired here additionally difficult. Minister while acknowledging changes made and promising immediate explanation of arrangements with Denmark and Hungary exclaimed, what can we do? We must buy where we can sell. He expressed great anxiety as to general German economic situation. In a casual conversation last night with Chief of Economic [Page 426] Section of Minister [Ministry] of Foreign Affairs I repeated same arguments and was surprised to learn that he was not informed of my representations to Neurath.

On June 1st I also had lengthy confidential conversation with Minister of Economics. He said that gold backing for currency was less than 4 percent, German export balance for May probably even worse than April and only hope was trade negotiations with the United States for which he desired that commission should start at once. I replied expressing approval in principle of liberal mutual trade concessions by both the United States and Germany but reminded him of skepticism in the United States in regard to possibility of arrangements with Germany. He expressed belief that such was due mainly to Jewish and church policies here.

While in German Government spheres great importance is attached to negotiations with the United States the effect of failure to meet existing obligations does not seem to be adequately appreciated: this is partly due to desperate shifts which administration is obliged to adopt.

Dodd