File No. 600.119/446
[Enclosure]
The British Embassy
to the War Trade Board
Memorandum
rationing of neutrals
The British Embassy has purposely refrained from confusing the
discussion of policy by raising questions of apportionment of
rations between the various exporting countries.
The principle which the British Government always sought to adopt
before the entry of the United States into the war, has been
that in any ration allotted to one of the border neutrals, the
United States and the Allies in Europe (and the overseas
neutrals—in so far as their export trade is concerned) should
share in proportion generally to their pre-war trade and their
present facilities for exporting. The British licensing
authorities and the Contraband Committee in London, therefore,
endeavoured at that time so far as possible to “split” the
various rations between United States exporters, British
exporters and other Allied exporters, with reasonable allowances
in the case of such overseas neutrals as the Argentine.
This problem was discussed in general terms during Mr. Balfour’s
mission in Washington, but it seemed so clear that a reasonable
arrangement of this kind could be arrived at in regard to
rations allotted to neutral countries by the United States, that
it has not seemed worth while to raise the question at an
earlier stage in pending discussions.
The rationing of neutrals by the United States appears to be
proceeding on the general line that the neutrals state what
quantities they require of commodities—which the United States
may prima facie be supposed to be able to
export. The United States authorities then agree to grant
licenses for stated quantities of these articles, provided that
the conservation programme of the United States allows it, and
that the commodities in question are not obtained from other
sources, in which case the amounts licensed by the United States
will be reduced in proportion. It is understood that the United
States reserve to themselves the right of directing neutrals
where to obtain these commodities, but it is not clear whether
this right applies in cases where a shortage in United States
supplies cannot fairly be advanced as a reason for refusing
export licenses from the United States.
The negotiations between the United States authorities and the
neutral representatives have proceeded generally on the
assumption that the commodities in question are not obtainable
from sources other than the United States. Taking the draft
agreement with the Danish representatives as an instance, this
assumption is not wholly [Page 982] correct. Practically all the commodities mentioned in the
draft Danish agreement are ones of which the United Kingdom or
other British dominions or possessions have been accustomed, up
to the present moment, to export certain quantities to Denmark,
As a matter of machinery, as the question stands at present, the
British licensing authorities might appear in a sense to be
bound to issue no export licenses for such commodities until
satisfied that they could not be exported from the United
States, and even if this were not so, Danish importers or the
Danish importing associations might be held to be bound under
the agreement to purchase these commodities only in the United
States. It is, of course, understood that this is in no way the
intention of the agreement, but in order that no friction may
arise between British and American exporters, it seems desirable
that a definite arrangement should be arrived at between the
licensing authorities of the two countries on the whole
subject.
In order to make the problem as concrete as possible a
statistical table is enclosed1 showing—
- (1)
- The proportion of the commodities mentioned in the
draft Danish agreement which were exported from the
British Empire during 1916, as compared with the imports
of such commodities into Denmark from all sources during
the same year;
- (2)
- The imports of these commodities into Denmark from the
United States and the British Empire respectively for
the first eight months of 1917.
Imports into Denmark from the United States during 1916 were not
differentiated in the British statistics from imports from other
non-British sources—hence the different basis adopted in the
enclosed table for the two years.
