103.96/1774: Telegram
The Ambassador in Great Britain ( Davis ) to the Acting Secretary of State
[Received 8:05 p.m.]
4781. War Trade Board [from Sheldon]: No. 2143, referring your 1859 Department’s 3470, Dec. 17, 6 p.m. and our 2140 of today, following is statement of British, French, Italian delegates on A.B.C. after consideration of contents of your 1859:
“The memorandum on the War Trade Board’s telegram submitted by the United States representatives was considered by the British, French, and Italian representatives with regard to the War Trade Board’s objection to the decision that goods on the present “free” list may be consigned to firms on the black list. The Committee feels that in view of the relatively unimportant nature of the list, an unimportance to which the War Trade Board has specifically drawn attention, the War Trade Board’s alarm at the prospective “breaking of enemy control” is quite unfounded. The Committee however holds no strong views one way or the other as to the consignment of free list goods to blacklisted firms and will gladly consider any suggestions for the modification of its decision which the War Trade Board desires to put forward, this point is, however, of minor importance and the Committee much regrets that the War Trade Board, merely because it did not agree with the procedure of the Allied Blockade Committee and because it considered that the very difficult questions connected with the partial relations [relaxations] of the blockade were not treated with sufficient expedition, should have issued at a date which did not permit the Associated Governments to take objection or to issue a similar notice of a list of unrationed commodities containing articles of the first importance. The Committee feels that to allow the unrestricted import by the border neutrals of the articles specified in the United States list, even if immediate leakage to the enemy did not ensue, would be tantamount to permitting Germany to accumulate in the border neutral countries large stocks of any of these commodities which she requires for post bellum reequipment and thus seriously to weaken the economical pressure which should prove most potent factor for compelling her to accept the peace terms which the Associated Governments desire to impose. The Committee therefore feels that the question of policy raised by the United States “unrationed” list, involving as it does not only serious economic questions but also a departure from the agreement between the Associated [Page 767] Powers and the border neutrals, is of such importance that it ought to be considered specially by the Associated Governments. They would also point out that the question of extending as distinct from abolishing the rations of the commodities in question is now under active consideration by the Statistical Subcommittee which hopes very shortly to be in a position to recommend substantial increases aside from considerations of general policy. The Committee feels that the action of the War Trade Board in actually publishing this list in their press on December 20th has placed the other Associated Governments in an exceedingly awkward dilemma. The other Governments must either effect a great sacrifice of their export trade by declining to adopt the course taken by the War Trade Board, or they must follow suit to the War Trade Board at the cost, as the committee believes, of a considerable weakening of economic pressure on Germany.
The Committee considers that the War Trade Board ought to take every possible step to relieve this situation. They propose therefore to ask the United States representatives to telegraph forthwith to the War Trade Board pointing out that the action of the War Trade Board has placed the Committee in a position of extreme difficulty; that the British, French and Italian representatives are reluctant at present in the interests of the blockade to advise their respective governments to take similar action and that in fairness to the other Associated Governments the War Trade Board, if not in a position to revoke the notice already issued, should for the time being nullify its effect by confining the actual issue of licenses within the limits of the agreed rations as extended from time to time by the Allied Blockade Committee.”