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does not intend to offer any advice to the Farm Board. I may say, for your strictly confidential information, that the original suggestions were based on a minimum price. It is apparently impossible for the Board to dispose of the stocks which it is holding on any other basis. Outside of the Farm Board stocks there are, however, many factors to be considered. Consequently, should the German Government really desire to push the matter, it would seem absolutely necessary that the German authorities appoint an agent to confer directly with the Board on all possibilities. I feel it necessary to repeat that we must get the matter out of diplomatic channels, and into the commercial channels where it should be handled. Dr. Kiep 23 would probably be a man with the proper ability to carry on these discussions. You may not want to suggest any particular man. You should make it clear to the German Government that their only procedure involves the appointment of a German agent to conduct the negotiations.

CASTLE

811.61321/36: Telegram

The Acting Secretary of State to the Ambassador in Germany

(Sackett)

WASHINGTON, August 7, 1931-7 p. m. 150. I am informed by the Farm Board that the German proposal as to cotton is impossible of acceptance as a Board transaction. This does not at all conflict with my telegram of this morning, which suggested that the German Government should appoint an agent to consult with the Farm Board and I hope that may be carried through. Owing to the fairly accurate reports from Germany as to the German proposition to buy 600,000 bales of cotton, I understand that the export of cotton has practically stopped. For this reason, the Board this afternoon was forced to give out the following statement:

"The Farm Board has given careful consideration to the German offer to purchase cotton. The Board is desirous of facilitating assistance to Germany and to the American cotton producer by expanding his immediate markets. Many conditions of the German offer are beyond the ability of the Board to comply with. It is, therefore, unable to accept the offer under the present proposed terms.

In addition to other difficulties, the original suggestion of Ambassador Sackett 5 weeks ago provided for a minimum price which would have contributed materially to stabilizing the price of cotton and would have made it possible for the Board to offer participation to holders of new crop cotton. The fall in price since that time, due in part to the situation in Central Europe, has necessarily led to the elimination by the German Government of that feature of its offer.

"Otto Carl Kiep, German Consul General at New York.

However, a new possibility has arisen in this whole question, which offers an alternative course. The purpose of the discussion has been in effect to assist the Germans in securing the foreign exchange necessary to provide immediate supplies. The effort now being made by the Treasury Department to expedite payment to German nationals under awards of the arbiter of certain German claims, if successful, would place the German bank in possession of an even larger amount of dollar exchange than the volume of this proposed transaction in cotton and would enable German business to make its purchases directly from the producers and the trade in the normal way."

CASTLE

811.61311 Germany/13: Telegram

The Ambassador in Germany (Sackett) to the Acting Secretary

of State
[Paraphrase]

BERLIN, August 8, 1931-2 p. m. [Received August 8-10: 50 a. m.]

163. Department's 148, 7th of August, noon. I presented to the Foreign Office the views contained in the telegram under reference. I assume that, although you refer to the Embassy's 159, August 5, which dealt only with cotton, the appointment of a German agent or agents applies both to cotton and to wheat, and I so informed the Foreign Office, which quite understood that under existing conditions, especially in view of the unfortunate publicity, it is necessary to resort to direct negotiations with the Farm Board.

It is the hope of the Foreign Office that business can be done in both wheat and cotton. The Chancellor, according to the Foreign Office, is strongly of the same mind, and it was very plain in this morning's conversation that he can see more clearly the great advantages which would flow to German credit from the loaning to Germany on long term at 42 percent by an American governmental institution, than can Schiele, whose vision is largely limited to difficulties of a technical nature.

The matter will be taken up by the Foreign Office with Bruening as soon as he returns from Rome on Monday, and in the meantime it will be on the lookout for suitable agents, subject to the Chancellor's decision, to deal with the Farm Board.

SACKETT

811.61311 Germany/14: Telegram

The Ambassador in Germany (Sackett) to the Acting Secretary

of State

[Paraphrase]

BERLIN, August 10, 1931-noon. [Received August 10-9:35 a. m.]

166. Supplement to the Embassy's 163, 8th of August, 2 p. m. The Foreign Office, just before receiving your 148, of August 7, had submitted to me, following previous instructions, the wheat proposal which I foreshadowed in my 159 of August 5, last paragraph. In effect, this proposal was one for approximately 500,000 metric tons at market prices of diversified grades of hard wheat. In spite of my insistence, the proposal contains no recognition of the principle of maximum and minimum prices and as I believe that the Germans can meet such a condition I informed the Foreign Office that I knew the proposal would not be acceptable; and that, therefore, there was no use in transmitting it to the Farm Board.

The Farm Board, I indicated, could sell at market prices to anyone on the more favorable terms of a short-term credit and a high rate of interest and the German Government would have to make a better proposal, from a purely business standpoint, if it wanted long-time credit and a low rate of interest, not to speak of the more general advantages resulting from the acquisition of credit on such easy terms from an agency of the United States Government. It was, therefore, my suggestion that the German Government reconsider its position. The proposal apparently emanated primarily from the Ministry of Agriculture. The Chancellor and the Foreign Office have a broader point of view, as indicated in the Embassy's telegram number 163 of August 8. If the German Government, as seems possible, appoints agents for dealing with the Farm Board, the latter may properly insist on the condition of maximum and minimum prices.

SACKETT

811.61311 Germany/20

Memorandum by the Under Secretary of State (Castle)
[WASHINGTON,] September 3, 1931.

The Ambassador 24 said that things were not going so well in the negotiations for the purchase of wheat. He said that the Farm Board now agreed that the original suggestion was a credit of three years but that the negotiations on the financial end had apparently

"Friedrich W. von Prittwitz und Gaffron, German Ambassador.

fallen down for what the Ambassador said seemed to him a foolish reason. The wheat is to be sold, if sold, to the German Grain Importing Company, the notes of this company will be endorsed by the German Government. Now the grain corporation says that it will not take these notes, unless in its endorsement, the German Government will guarantee that they will be paid ahead of reparations or any other political debts. I told the Ambassador that I would take this up immediately with the grain corporation (it stands to reason that this kind of a guarantee is fruitless because the German Government is merely guaranteeing the note of a private company and that private company has nothing to do, one way or the other, with political obligations of the German Government).

The Ambassador continued that there was one other trouble in the negotiations which was that the Germans insisted on having 1931 wheat as of better quality and the Farm Board insisted that it had no 1931 wheat to sell and that the 1930 wheat was just as good anyway. We agreed that this technical matter was obviously not one for discussion in the Foreign Office and that it was purely a question of fact to be decided by the negotiators.

The Ambassador asked me whether I did not think it wise for the Germans to come back to Washington from Chicago to continue their negotiations. I said the reason why I doubted this was that for some unknown reason the whole business had been kept out of the papers and if the negotiators came back here, it would almost certainly be known. The Ambassador agreed to this.

811.61311 Germany/21

Memorandum by the Economic Adviser (Feis)

[WASHINGTON,] September 11, 1931. Mr. Meyer, the First Secretary of the German Embassy, came in to see me about the last two outstanding points of difference between the German negotiators and the Farm Board in regard to the purchase of wheat. One concerned the financial guarantee which the German Government has to grant. The suggested amendment seemed to me to be unobjectionable and by telephone to the Farm Board, I ascertained that they were agreeable. The second concerned the price to be paid for the wheat. On this, though I have avoided giving advice to the Farm Board, it seemed to me that the position taken by the Farm Board was fair in accordance with the understanding at the beginning of the discussions. The Secretary indicated that though he was not authorized to give any answer to that question-as I was not authorized to receive any-that the

German negotiators would give in if the American position is maintained.

Therefore, at the Secretary's request, I arranged a meeting at 12:15 at the Farm Board for the signature of the contract 25 and at 12:45 for the Ambassador's signature of the German Government's financial guarantee. Both the Secretary and the Farm Board asked me to be present at the signature, but in accordance with previous discussion with the Under-Secretary, I informed them that it did not seem to be necessary and that I would not come.

HERBERT FEIS

OPPOSITION IN GERMANY TO THE SHOWING OF THE MOTION PICTURE "ALL QUIET ON THE WESTERN FRONT" 26

862.4061 All Quiet/2

The Ambassador in Germany (Sackett) to the Secretary of State No. 654

BERLIN, December 17, 1930. [Received January 3, 1931.]

SIR: With reference to my despatch No. 646, of December 9, 1930, pages 4 and 5, and to my telegram No. 140, of December 12, 12 noon," reporting respectively, the disturbances resulting from the showing in Berlin of the American-produced Universal Film Company's version of Eric Remarque's "All Quiet on the Western Front," and the decision of the Appellate Board of Film Censors, on December 11th, to prohibit its further production in Germany, I have the honor to report further as follows:

As stated in my telegram aforementioned, the film had been approved by the primary Board of Film Censors, but, on complaint of five German States (Saxony, Thuringia, Brunswick, Bavaria, and Württemberg), the Appellate Board of Film Censors ruled that it was calculated to injure Germany's prestige abroad and therefore should be withdrawn. The chairman of the board declared that, as a whole, the film did not do justice to the frame of mind of those who participated in the war, that it pictured the German defeat and not the war, and that, if the film were continued to be shown, other countries would feel that Germany had approved the representation.

For the terms of the contract between The Grain Stabilization Corporation and the Deutsche Getreide Handelsgezellschaft, which involved the sale of 7,500,000 bushels of wheat on 3-year credits, see the statement by the U. S. Federal Farm Board in the New York Times, September 12, 1931, p. 2.

*For correspondence concerning similar opposition in Austria, see vol. I, pp. 866 ff.

"Neither printed.

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