811.24/252½
The Secretary of State to President Wilson
My Dear Mr. President: In reference to your letter of August 29th, which I enclose as a reminder of its contents,5 I have inquired as to the situation relative to British Government prices being denied our Government in England.
I am informed by representatives of the War Trade Board that Mr. Baruch says that the matter has been satisfactorily adjusted as a result of conferences which representatives of the War Industries Board, now in London, have had with British officials; and he also suggests that the matter be allowed to rest for the present.
In going over the matter I find the problem is much more complicated than appears on the face, and that the attitude which we should definitely take has not been determined. The British colonies, for example, are desirous of making large purchases in this country and it is a question to what extent we should give them the benefit of our governmental prices since, in many cases, it is almost impossible to determine whether their purchases are for military purposes or for civilian purposes. I believe it is generally agreed that the Associated Governments should give one another the benefit of governmental prices where the goods purchased are required for the conduct of military operations. This seems to be the theory, but in practice the line of demarcation between purchases for military purposes and purchases for commercial purposes is difficult to draw. This is particularly true in cases where the governments themselves are so largely purchasing for their domestic requirements and subsequently allocating their purchases among their nationals.
[Page 146]In view of the situation I believe it would be advisable not to rest [raise?] the question at the present time.
Faithfully yours,