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United States Department of State / Foreign relations of the United States diplomatic papers, 1934. Europe, Near East and Africa

Lithuania,   pp. 620-626 PDF (2.7 MB)

Page 625

offer by the United States to enter into such an arrangement with
Lithuania would meet with favorable approval by the Ministry for
Foreign Affairs, since Lithuania was gradually being forced from
economic circumstances to go over to the policy of balancing its trade
with each individual country.
  Mr. Garsva stated further that although there was a tendency to
buy in Great Britain (since the balance of trade between the two
countries in 1933 was favorable to Lithuania by Lits 47,222,700),
nevertheless, owing to the recent cut in the bacon quota allotted Lithu-
ania by the former, the Government was being forced to seek other
markets through the conclusion of special agreements.
  Elaborating further on the possibility of expanding trade between
the United States and Lithuania, Mr. Garsva asserted that, although
any increased trade which might result between the two countries as
a result of an agreement would comprise an infinitesimal part of the
total foreign trade turnover of the United States, it would mean a
great deal to Lithuania.
  To summarize, I obtained the impression from Mr. Garsva, which
is supported by facts, that the Lithuanian Government is using the
government purchases abroad, which comprise approximately 20 per
cent of the total imports into this country, to equalize trade balances
and to satisfy the demands of those countries (principally Great
Britain) the balance of trade of which is favorable to Lithuania. It
is also evident from the conversation that the Lithuanian Ministry
of Finance has issued instructions to government departments not
to purchase in certain countries, including the United States, except
in exceptional cases where the superiority of the material is of pre-
dominant importance unless export compensation is granted by the
foreign firm. This information is confirmed by the secret memoran-
dum issued to all government departments by the Cabinet of Ministers
in November 1933.t
  It is therefore believed that American firms will have no opportunity
of competing in forthcoming bids unless they agree to buy Lithuanian
products to the same amount, in spite of the fact that the balance of
trade between Lithuania and the United States continues to be favor-
able to the former.
  Although the import license system affecting eleven important com-
modities and groups was invoked to diverge Lithuania's import trade
to Great Britain where possible, the Government is also encouraging
the importation of other commodities from Great Britain, and, where
government purchasing departments are concerned, through direct
instructions. Complaints are being received especially from local im-
tSee Diplomatic Despatch No. 21 of January 30, 1934. [Footnote in the orig-
inal; despatch not printed.]
    790532-51  46

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