File No. 102.1/403
The Delegate to the Inter-Allied Council ( Crosby) to the Secretary of State
[Received November 22, 2.40 a.m.]
No. 9 for Secretary of Treasury:
Food Administration here has been asked by our Food Administration to guarantee purchase of hog products up to May, 1919, on certain basis of amount and sliding scale of price varying with price of corn. General scheme seems good but Treasury Department here estimates British proportion may rise high as $430,000,000 and declines to make commitment until assured of funds from us to meet their guarantee if made. Have advised them you probably could not guarantee beyond end of war for any purpose whatever and that large amounts like this should not be passed upon until all other large purchases for ensuing six or twelve months shall have been indicated by each of borrowing governments. While fully recognizing great importance of this matter as part of food [Page 584] supply of Allies, I hope it will be possible to delay action in so far as it rests upon obtaining guarantees from governments here which means only corresponding hasty action on part of Treasury in assuring long time credits for large amounts. Before having totals for consideration would like to know how soon it is desired to give guarantee to American farmers so as to present whole matter of anticipated expenditures with this included.
Referring to ship construction funds returnable to British Government, understand from Treasury here that they prefer application of all of it to overdraft. Have called attention to fact that this leaves their obligations with Du Pont and others and their February maturities entirely unprotected. They, however, seem to urge whole amount be applied to Morgan account. Have notified them I would cable you facts. Am uncertain how far you may feel committed to Morgan account by virtue of conversation in your office with Lamont some months ago. Think at least Du Pont notes $13,000,000 maturing December 15, should be cared for out of these funds unless assurance can be had of renewal of this obligation and of $17,800,000 due March 15. Respecting Italian application for loan. After conference with Chancellor here recommend that $7,500,000 per month for November and December be established as free credit available to Italian Government for any purposes, including support of lire exchange in New York, this to be in addition to $230,000,000 credit already established. Any other program for increase to await further study in France and by Inter-Ally Council. Great Britain is lending Italy £8,000,000 per month for general purposes and £1,500,000 per month for free credit similar to that above recommended. Please wire me your decision on this recommendation to Paris.