The Secretary of State to the Ambassador in France ( Wallace )
Washington , April 1, 1920—6 p.m.
663. Your 778, March 22, noon. R–445.
This Government’s views regarding general principles involved were stated in Department’s 539, March 16, 6 p.m.
- First. If as alleged your Paragraph Second German departments vary price of exports according to country such action would appear contrary to articles 264 to 267. Varying price “during course of exportation” would appear legal if not discriminatory but might be ground for informal protest if such action interfered arbitrarily with private contracts.
- Second. Admission of German right to fix higher prices for exported goods and right to prohibit exportation or importation of merchandise (unless, it is assumed, in conflict with specific provisions of treaty) seems to be acceptance of principles contended for in Department’s 539, March 16, 6 p.m. We are not sure we understand meaning and purpose of statement that “products forbidden exportation can be used for exchange on barter principle only with special authority Allied and Associated Powers”. We assume statement refers to German regulations which might prohibit exportation of certain commodities unless exported on barter arrangements providing for importation of certain specific articles, which possibly might be obtainable in one foreign country rather than another. German regulations prohibiting such barter arrangement could not be taken to involve discrimination merely because they relate to products which in practice are obtainable from some countries and not from others, unless such regulations appear to be mere subterfuge for granting special treatment and evading treaty provisions. We feel there is possibly an underlying desire on the part of certain of the Allied Powers to force Germany to become a market for certain unnecessary commodities and luxuries. There would seem no reason why exportation and importation prohibitions should be absolute but such exceptions as might be made should involve no discrimination. Proposition mentioned latter part your Paragraph Third appears inconsistent with proposition in first sentence thereof, since any recognized German right to fix prices implies right to hold illegal any contracts contrary to such regulations.
- Third. Department hopes Governments concerned will accept principles set forth in Department’s 539 March 16, 6 p.m.