File No. 195/136
The Ambassador in Great Britain ( Page ) to the Secretary of State
[Received October 27, 2.20 p.m.]
7538. Mr. Balfour has just handed me the following aide mémoire:
His Majesty’s Government accept without question the decision of the United States Government to requisition all vessels building in American shipbuilding yards, including those building to British orders.
It may be convenient to repeat the British position in regard to these vessels. The orders were placed early in this year as soon as the commencement of the intensive submarine campaign made it obvious that the shortage of tonnage available for war services would be one of the most important factors in the war. This action was taken before America entered the war and was discontinued as soon as there was any indication that continued purchases might embarrass the future action of the Government of the United States. His Majesty’s Government have been only anxious to maintain as far as possible the number of vessels available for war services and they have throughout made it clear that they would acquiesce without protest in whatever decision the United States Government took in the matter. His Majesty’s Government recognize that the early advent of an American army is an advantage for which many risks must be accepted. The fact that the requirement of the United States for military transport will exceed previous expectations raises, however, certain very serious considerations to which His Majesty’s Government venture to call the attention of the United States Government. [Page 634] The British ships available already fall short of the essential needs of the Allies for food and supply and His Majesty’s Government had hoped to make good part of the deficiency with vessels building in America. The transfer of these vessels from the British to the American Government does not materially affect the position except that it transfers from His Majesty’s Government to the Government of the United States the power to help France and Italy. On the other hand the diversion of tonnage from supply to transport will greatly increase the demands which the Allies will necessarily make upon the United States Government. There is every indication that through comparatively poor harvests, etc., the Allies’ needs will be greater rather than less and His Majesty’s Government fear, therefore, that these demands can not be postponed or ignored without grave military risk. As regards oil tankers building to British Government order it is earnestly hoped that these will not be requisitioned in view of the very great difficulty which the British Admiralty is experiencing in supplying oil for British needs and for the other allies. These vessels are intended for the supply of oil fuel for the use of the British Fleet and their possession has been reckoned on in all the calculations which have been made of the quantities which can be imported in future months in British tank steamers. Their withdrawal would, therefore, correspondingly increase British deficiencies and create a most serious situation.
In conversation Mr. Balfour pointed out that the American requisition of ships building for British in the United States necessarily transferred the obligation from Great Britain to the United States to supply Italy and France with certain material and food. He said, “I do not mean any technical obligations, of course, but we shall no longer have the shipping power to give them the help that we should otherwise have given.”
Mr. Balfour then gave me the following memorandum from the Controller of Shipping:
As an illustration of the extreme gravity of the food situation in Italy the Shipping Controller stated to-day that the Italians had ordered direct from Europe to America 20 vessels which it had been arranged should load iron ore from Spain to the United Kingdom. The failure of these vessels to transport 100,000 tons of iron ore will deprive us of 100,000 tons of steel which with lower-grade ore and scrap iron could be made thereof and which in turn will make 200,000 tons gross of shipping. On this subject of steel, which is the neck of the bottle in the production of merchant tonnage in the United Kingdom, it has been reported recently to us that it might be possible for the United States to let us have considerable quantities of steel slabs or steel plates without interference with their shipbuilding program. It was suggested however that the Americans hesitated to send this steel to us because they doubted the energy we were putting into our merchant shipping construction and thought that we were wasting our resources of steel in other directions. An increase in the steel supply from America is of the utmost importance and if any [Page 635] such misconception as I have indicated above exists it should not be difficult for us to show Mr. Page or anyone he appoints what is the true position.
The rumor that our Government doubts whether the British are doing their utmost in merchant shipbuilding has for some time been current here. The Ministry of Shipping have informed me that they are held back only by lack of material. I shall now on my own account ask the Controller of Shipping to make good his promise in the last sentence of his memorandum.