File No. 811.50/9

The Ambassador in Great Britain ( Page ) to the Secretary of State

[Telegram]

6057. Hoover having made direct and thorough investigation into the alarming condition of shipping gives me the following report which I transmit with strong indorsement of his recommendation.

Shipping position is so critical that it is urgently necessary to create at once a committee that will undertake all chartering both for neutral and Allied tonnage for account commercial and governmental purposes, forbidding absolutely any private chartering except through such committee. This charter committee to cooperate with Allied charter committee existing here. During past ten days rates on neutral shipping have risen nearly 100 per cent due to frantic bidding of American shippers for neutral tonnage to be used to a considerable degree for purposes other than transport of food and materials into war zone. Of equal importance is to create simultaneously bunker committee which will license purchase of bunker coal with a rigorous prohibition established upon sale of any American coal whether at home or abroad directly or indirectly to any ship unless it have such a license. This committee by cooperating with existing Allied bunker committee here will control practically all bunker coal in the world and neutrals must accept service in carrying food and material at the peril of being without bunkers. As an example of present situation Spanish ships formerly carried almost entire Spanish iron to English furnaces. Since unlimited submarine warfare has been declared Spain refuses allow her ships to continue in this trade and in order to keep English furnaces and consequently English munitions going it has been necessary to divert English shipping to carry this iron ore. Further than this Spanish Government now compels these English ships to transport coal to Spain in exchange for iron ore; beyond this again Spain requires them to devote 20 per cent of their iron ore space to carrying oranges to England where they are not wanted; further than this Spanish shipping is now being chartered at high market rates to American shippers and others for mercantile trade to neutral countries and to neutrals for inter-neutral trade. The net result of Spanish action has been to greatly diminish available shipping and imperil food and munition supply and could at once be corrected if bunker coal were placed [Page 595] in entire control so that Spain should be compelled to carry her iron ore to England in exchange for coal. This matter is of most critical importance and requires immediate action. Herbert Hoover.

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