611.626 Wines/24
The Secretary of State to the Ambassador in Germany ( Dodd )
Sir: There is enclosed a copy of a memorandum of conversation between the Economic Adviser of the Department and a member of the German Embassy.12 The decision to double the two months German quota was made for two reasons: First, the administrative practices of the Federal Alcohol Control Administration made it necessary to take action before February 28, 1934, if any adjustment were to be made on this two months quota; second, in view of the fact that grave [Page 418] injury is threatened to American trade if the German Government pursues an arbitrary policy in regard to quotas, it is the intention of the American Government to press its treaty rights stubbornly in each instance. The joint conversations envisaged would give that opportunity, it would form the occasion for trying to commit the German Government to some dependable principle fair to American trade.
It is further believed that this Government would approach such discussions in the strongest possible position if it gave some indication of its belief in the necessity of recognizing treaty rights and thus enter the discussion without giving the German Government ground for claiming that our policy would also seem to indicate a wish to ignore treaty rights. The concession itself amounting to slightly over 200,000 gallons is of small importance and this Government remains wholly uncommitted beyond the present two months quota period.
The Embassy is requested to follow the course of German treaty negotiation with other countries with detailed care and to continue to inform the Department at once of significant developments.
Very truly yours,