Evening star., 1934-10-13
REICH TO CANCEL
j. s. TRADE PACT
TO AID FINANCES
Move Started to Smooth
Economic Relations Be-
tween Nations.
ABR0GATI0N EFFECTIVE
ON OCTOBER IA, 1885
New Agreement Is Sought in
Harmony With Treaty Deal
ings of Roosevelt.

Copyright. 1884, by the Associated PressJ
The economically-ha -harassed German
government today made a drastic
move to clarity its involved economic
and financial relations with the
United States by announcing its in
tention of terminating its uncondi-
tional most-favored-nation CONNER
cial treaty with this country on
october IA, 1885.
DR.. Hans Luther, the German AM
basSador, served official notice in a
formal note delivered to Assistant
Secretary of State Phillips that the
Reich would abrogate the treaty next
year.
At the same time, he was under
stood to have expressed the hope that
a new reciprocal agreement-without
the most favored nation clause
would be negotiated by the two gov
ernments in the trade agreements
program now being carried on by
President Roosevelt. and that mutually
profitable trade would continue.
In Effect Since 1925.
The German treaty, the first and
country after it adopted the principal
of unconditional INSTRUMENTATION
treatment in commercial agreements,
has governed trade and commerce be-
tween the two nations since 1925.
Germany'S denunciation of the
treaty climaXes series of diplomatic
representations growing out Of the
Hitler governments strict control of
all imports, extensive system Of
monopolieS, and drastic quota limi-
tations
The United States has made several
representations to Berlin alleging dis
elimination against American goods
through operation Of one or more of
the drastic economic and financial de-
crees, and Germany called attention to
the INSTRUMENTATION clause when
the United States established liquor
quotas Immediately after prohibition
was repealed.
Abrogation Of the pact by Germany
was considered by American officials
as forewarning that the Hitler gov
ernment planned to enter even more
extensively into bilateral and barter
arrangements with other countries
and felt hampered rather than helped
by existence Of the treaty.
To Pay Interest to U. S.
Germany made another move to
clarity its tangled economic and
financial problems yesterday in an
nouncing that it had perfected ar
rangements to pay approximately rs
per cent Of the 100000 to $780,
900 interest due American holders Of
$50 100000 in Dawes loan bonds on
October Is.
One-half Of the amount due will
be paid in foreign exchange, accord
ing to the German Embassy's an
nouncement, and the remainder in
reichsmarks, which may be utilized
in Germany or sold at the prevailing
discount of from 80 to 40 per cent.
Germany'S recovery program has
been seriously jeopardized by the loss
of a large share of its export market
and increasing difficulties in securing
adequate supplies of raw materials.
Trade with the United States, on
the decline for several years, amounted
to $140, 1924, 900 in exports and $78,-
185,00 in imports in 1888. During
the first eight months of this year
imports from Germany amounted to
only SAT 7,188,0 900, and exports declined
to $S5,345,0 900, presaging greatly re-
duced total trade.
Minister Takes Drastic Action.
DR.. Hjalmar Schacht, minister Of
economics and president of the
Reichsbank, as Germany's financial
and economic dictator, has taken
drastic steps to turn the unfavorable
balance of trade by imposing control
of foreign exchange transactions, sus-
pension of debt payments abroad,
strict regulation Of imports, rationing
of raw materials, and utilization of
synthetic raw materials.
In the process the German govern
nent has been driven to the desperate
extremity of entering into bilateral
trade and barter agreements with
other nations from which it could Sc
cure vitally needed raw materials.
Under the existing treaty the United
States is entitled to the same treat
ment accorded any other nation and
has, consequently, protested several
times against Germany's action in
granting preferential treatment to
other nations to the detriment Of
American trade.
Determinations Cited.
Alleged determinations against this
country in granting quota on prunes,
favorable to Yugoslavia, and in lard
quotas, favoring Denmark and the
Netherlands, caused Ambassador Dodd
to call the Berlin governments atten-
ton to alleged violation of the treaty.
The German government, feeling
itself forced to enter into agreements
to secure raw materials, regardless of
treaties, is believed by officials here
to have decided to abrogate the treaty
so as to be free to enter into any such
agreements in the future as it finds
advantageous or necessary.
The treaty contains a provision that
it may be terminated 10 years from
the date of ratification after one
years notice. The Ambassadors noti-
fication today means that it will end
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