The Washington times., 1934-10-13
SEEN
WITH OTHER
TREATIES
Ambassador Luther Notifies
State Department; No
New Agreement Seen

Germany today served notice
upon the United States of its in
tention to terminate one year
hence the most favored nation
treaty with this counry.
German Ambassador Hans
Luther called on Under Secretary
of State Phillips and notified
him that the German govern
ment had decided to terminate
the most favored nation treaty
because it conflicted with the
bilateral trade agreements which
Germany is concluding with
other countries. He proposed
conclusion of a new trade treaty
eliminating the unconditional
most favored nation clause.
The provisions of the existing
most favored nation treaty with
Germany signed in October, 1925.
provide that the treaty remains in
force indefinitely after October
IA. 1895, subject to IL months ad-
vance notice of termination.
Made Special Pacts
The position of the German
government, as outlined by Am
bassador Luther, is that Germany
has been forced to enter special
agreements with other countries
to obtain needed raw materials.
In order to avoid violation OF
the INSTRUMENTATION treaty,
Germany considers it advisable to
terminate the treaty.
In commenting on Germany'S
action, Mr.. Phillips later init
mated that he gave Ambassador
Luther no hope that this Govern
ment would enter negotiations in
the near future for a new COM
mercial agreement.
Mr.. Phillips said the policy of
the United States was that the
INSTRUMENTATION treaty repre-
sented the most advantageous
course for this Government to
follow in It's trade relations with
the rest of the world.
Pays Only One-Half
Notice of Germany's intention
to terminate the most-favored-
nation treaty followed quickly in
the wake of official word from
Berlin that the German govern
ment intended to pay only one
half of the 100000 October IS
interest payment due American
holders of Dawes plan loan bonds.
The German government mott
fled the State Department that
the balance would be credited to
the account of the American
bondholderS in the German Reich
bank. However, American Off
cials pointed out that these
marks were virtually useless to
the American bondholders unless
the latter could go to Germany
to spend chem.
British bondholders and those
OF other countries with whom Ger
many has made special trade
agreements will receive 100 per
cent cash payment. Asked if he
did not consider this constituted
discrimination against American
bondholders, Ambassador Luther
told newspapermen that those
special agreements with other
countries were forced upon Ger
many by threats of trade retailia-
ton. He said heatedly:
Germany has not the re-
mOteSt desire to discriminate
against Americans. We are do
ing everything in our power to
meet our obligations, but we are
not responsible for the agree
mentS forced upon us by other
nations who maintain positive
balance of trade over U.S."
Leaves "Aide MemOire"
In connection with the interest
payment on the Dawes loan, the
State Department disclosed that
American Ambassador William E.
Dodd at Berlin left with the Ger
man government on Wednesday
an "aide memoire" expressing the
hope that Germany would make
full payment.
The aide memoire, the State De-
partment announcement said, ex-
pressed to the German authorities
1.-The expectation of the Govern.
ment of the United States that
no discrimination will be praeticed
against American holders of bonds
of the German external loan OF
1924 (the Dawes loan).