File No. 659.119/139

The Commercial Adviser of the British Embassy ( Crawford) to the Counselor for the Department of State ( Polk)

My Dear Mr. Counsellor: I feel that the time has arrived to Teach some clearer understanding than we have had hitherto, with regard to the machinery to be used in the northern neutral countries for controlling any imports from the United States or Allied countries so soon as the present embargo is raised.

It is the strong opinion of my Government that the machinery hitherto employed by them should be continued. That is to say, no goods should be licensed for Denmark unless under a permit issued by the Danish associations (i. e., the Merchants’ Guild and the Manufacturers’ Guild); no goods should be licensed to Holland unless consigned to the Netherlands Oversea Trust (or possibly, in the case of certain commodities, such as wheat, to the Dutch Government); and that no goods should be licensed to Norway unless consigned to one or other of the various trade associations. The machinery for controlling imports into Sweden will have to be set up in the pending negotiations in London, because hitherto the Swedish Government has refused to allow any formation of such machinery as exists in the other three northern neutral countries.

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In the case of Denmark and Holland the only thing necessary, if the United States Government agrees with this course, is to recognize the Danish associations and the Netherlands Oversea Trust as they stand at present. But in the case of Norway, where we have, in one form or another, denounced our agreements with the various associations, the final agreement between the War Trade Board and the Norwegian Government must, in some form, provide for the reconstruction of these associations and, possibly, the organization of one or two new ones. This point has already been brought to the attention of the War Trade Board and the suggestion has already been made to them, under instructions from the Government in London, that the provisions of the final agreement covering questions of machinery and methods of control should be drafted, in the first instance, by the United States and British Ministers at Christiania for submission to the two Governments. It seems most important that instructions in this sense should be sent to Christiania at the earliest possible moment and I shall be glad to learn whether you are prepared to send such instructions.

The above suggestions do not, of course, affect the necessity of obtaining general guarantees in your agreements from the neutral Governments themselves, as the War Trade Board are already doing. It is, however, important, in the view of my Government, to recognize that none of these neutral Governments can themselves exercise sufficient control unless the trade interests in their countries are themselves made responsible for the actual supervision of imported goods and, possibly, also of some native goods, to which the agreements may apply. To rely on the Governments alone would be to substitute an endless three-cornered diplomatic correspondence, in which the neutral Governments would be placed between representations from the German Government and from the United States and Allied Governments for the continual unofficial supervision which can be exercised by American and Allied representatives in the neutral countries in close consultation with the friendly commercial interests in those countries.

Believe me [etc.]

Richard Crawford