Messersmith, G.S., Vienna. To R[obert] Walton Moore, Washington.
Date
1936-12-22
Journal Title
Journal ISSN
Volume Title
Publisher
University of Delaware Library, Museums and Press
Abstract
Description
Enclosure: See No. 808. Austro-German trade agreement will affect U.S.-Austrian trade; Germans will emphasize U.S. favorable trade balance with Austria; has talked with leading officials of Foreign Office giving information concerning U.S. trade agreements program, and tried to make clear how undesirable it would be for Austria to make arrangement with any country which might tie her hands so far as eventual trade agreement with U.S. is concerned; negotiations recess on Dec. 23 until after Jan. 1; Dr. Clodius, head of German delegation, proposed indirectly that Austria continue to draw raw materials from U.S., but that they come through Germany for distribution, and Austria, instead of paying U.S. in dollars, could pay Germany in agricultural products; a fantastic proposition; was assured by Secretary of State for Foreign Affairs and President of National Bank it would not be accepted; Germany would like to share in any inter-Danubian commercial preferences to the exclusion of other major states; U.S., within limits of her trade agreements program, can recognize inter-Danubian preferences, provided she shares in such preferences to the degree they may be accorded to other major non-Danubian countries; has discussed this matter with [Lloyd V.] Steere, Agricultural Attaché for this part of Europe, and he agrees; believes Italy, now negotiating for trade treaty with U.S., would accept this principle; no progress in Austrian-German negotiations yet except to bring out difficulties; Austria determined not to make disadvantageous deal; slipping toward Germany, reported in recent letters, definitely arrested through energetic action of Chancellor; [Guido] Schmidt in line again and [Eduard] Glaise-Horstenau's activities restricted; Nazi activity in Austria has increased, but is being kept in check; gave dinner recently for Mr. Linnee de Paula Machado, wealthy and influential Brazilian; discussed raw material situation in Germany, and he mentioned recent trade agreement between Brazil and Germany which turned out badly for Brazil; fortunately agreement was for only one year and would not be renewed; raw materials situation now critical in Germany; [Guy Nicholas] Vansittart, head of General Motors Continental, reported that Opel plant at Russelheim had been informed there would be no further foreign exchange for crude rubber, and that if the company could not provide the needed exchange the plant would have to close down; Vansittart said his company was being blackmailed into bringing good money into Germany, when in recent years they had not been able to take one cent of profit out; in conversation with First Secretary of German Embassy in Paris, Vansittart was informed that shortage of raw materials was so acute that unless Germany could make some arrangement with England and France for exchange or credits, she was prepared to take action; she could wipe out Czechoslovakia in two weeks and France in two months, and had nothing to fear from England; Edgar [Ansel] Mowrer, returning from three weeks in Moscow, said German Naval Attaché there told him substantially the same thing; recent speeches of [Hjalmar] Schacht contain almost direct threats of conflict if Germany is not given what she wants; according to German friend, shortage of bread grains expected in February; friend said German army would not act against regime unless there is internal disorder; foreign exchange situation in Germany so difficult, death penalty fixed for failure to declare foreign holdings and pressure increased on the wealthy to disgorge their foreign holdings; church situation in Germany acute and opposition of Protestants and Catholics stronger; artistic criticism forbidden to cover up stagnation resulting from Party measures; [Erich F.W.] Ludendorff "discovered" that Columbus did not discover America and that the story was concoction of Catholic Church; Ludendorff now engaged in crusade against celebration of Christmas; Prof. [Wolfgang] Windelband retired from University of Halle, though in prime of life; scores still disappearing from their homes and terror continues; observers believe greatest danger of explosion will be in fall 1937; if explosion doesn't come then, and European situation continues to develop as at present, danger of war may be averted; more reason now to be optimistic than six months ago; Austrian position stronger; English armament proceeding steadily; German anti-Communist movement, aimed to destroy Franco-Soviet and Czech-Soviet agreements has failed in its objective; balance of power against Germany growing; Vienna press announces proposals being made to President [of U.S.] that he should make declaration calling on nations of world to disarm and to discuss need for better distribution of raw materials, but Utopian declarations cannot bring peace; is sure President wise enough to appreciate this; enclosed copy of letter written by Englishman refers to Mrs. [Wallis Warfield] Simpson as having influenced pro-German attitude of ex-King; believes attitude was inherited from father rather than due to Mrs. Simpson's influence; Duke of Windsor staying with Eugene Rothschilds at Enzesfeld, near Vienna; he is behaving with more discretion since abdication than before.
Keywords
Messersmith, George S. (George Strausser), 1883-1960.