File No. 763.72/8185
The Ambassador in Great Britain ( Page ) to the Secretary of State
[Received December 17, 2.08 p.m.]
7984. No. 16 for Secretary of the Treasury:
Council organized Thursday.1 French demand for two bodies withdrawn. Powers indicated my No. 11 given to council sitting in London and Paris, permanent secretary Paris, also London secretary. Italian delegates hope to receive from Rome necessary figures their case Wednesday next. Their demands upon Great Britain for $500,000,000 in six months likewise not yet supported by details. Meantime $93,000,000 asked by British from Italians is accepted by latter for payment of cereal purchased since last settlement covering August. Our advances to Italy thus far have covered approximately $20,000,000 monthly for that purpose, hence no new money should be involved except possibly for October and also by reason of permitted division of funds to other than original purposes. In any case recommended that this amount be advanced as soon as possible. When received figures supporting applications to Great Britain and ourselves will be compared before further recommendations made. Meanwhile it is advice of all concerned that only pressing demands should be met together with friendly statement that both lending Governments willing to extend substantial support when this can be intelligently done. Great Britain has figures for council in fair shape and study of these has begun. Meantime Prime Minister especially urges that large credits for January food purchases be at once established. Total estimate British expenditures United States in January about $345,000,000 of which approximately $70,000,000 returnable from Italy and France for their wheat purchases, hence net request to us $275,000,000. Principal items are about $65,000,000 food supplies, this being considerable increase over earlier anticipations; $130,000,000 for sterling exchange of which approximately $60,000,000 estimated covering cotton purchases, munitions, and various army supplies; about $50,000,000 wheat; Great Britain alone approximately [Page 590] $30,000,000. In addition British Government will undoubtedly ask funds to meet $94,000,000 maturing February 1. Although I have explained your attitude on this subject apparently no way now known to Treasury here of meeting this debt, ship money having been promised for overdraft, Lamont thinks release this promise impracticable. No difficulty about subrogation collateral when transaction ready for execution. Please advise me as soon as possible amount and time of ship money payment. Rhondda claims Cabinet here has agreed food supplies take priority over all other needs as food situation London and other large cities unsatisfactory. Viewing this position and taking word of Prime Minister given personally to me concerning urgency of case, have stated would recommend that, without waiting further report, $185,000,000 credit be established but that all other demands should be held in suspense.
French Government preparing figures in France. Meantime ask $160,000,000 assurance for January subject to possible modification by council; think this reasonable.
If we should be forced to take British February 1 maturities figures proposed for Great Britain and France alone for January would thus total $535,000,000. I have emphasized seriousness of situation and all are much concerned but tendency to increased expenditure in all quarters is powerful corresponding to general feeling of insecurity as to military results of next few months and grave concern in all Allied countries as to attitude of public which must be well fed to prevent trouble. Please cable whether cash situation permits anything more than $500,000,000 per month for loans. Anticipate pressure for larger loans supported by sincere conviction here that without them whole cause may be seriously (jeopardized in?) six months.
Referring your No. 25.1 Expect meeting to-morrow to conciliate French, English and American views on financial blockade, probably wiring you result same day. [Crosby.]