File No. 600.119/1645c

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

[Telegram]

2533. For Sheldon [from War Trade Board]:

No. 1533. For several months we have been discussing with Captain Fisher 2 an arrangement to be entered into between Great Britain and the United States providing for the supply of coal to South America. As a result of these negotiations, the War Trade Board have approved and are prepared to adhere to the following arrangement:

Whereas the Governments of Great Britain and of the United States have both independently adopted the principle that vessels utilizable for war zone service shall be employed to carry exports to South America only to the extent that such tonnage must be sent there to carry back from South America commodities essential for the prosecution of the war, and for the maintenance of the civilian population; and

Whereas it is desired to supply the essential coal requirements of South America by the employment of vessels which in accordance [Page 530] with the foregoing principle must be sent to South America by Great Britain and the United States to lift essential imports;

Now, therefore, the following arrangement has been reached:

1. The estimated annual coal requirements of the several South American states are in long tons as follows:

Minimum Average Maximum
Argentine 1,000,000
Bolivia 10,000 20,000 (to be received through Chile)
Brazil 600,000 1,000,000
Chile 500,000
Colombia 3,000 10,000
Ecuador 10,000 30,000
British Guiana 10,000 30,000
Dutch Guiana 2,000 5,000
Peru 50,000 110,000 (includes 20,000 coke as a minimum basis; 30,000 as average basis)
Uruguay 600,000

2. Great Britain assumes the responsibility of supplying the needs of Argentina and Uruguay. In case Great Britain directs vessels controlled by her to load coal in the United States, the United States will facilitate the shipment from United States ports of up to 400,000 tons of coal. The United States assumes the responsibility of supplying the needs of Brazil and of Chile. With respect to the other South American states mentioned in paragraph 1, no apportionment of responsibility as between Great Britain and the United States is made at the present time.

3. It is realized that the requirements of Great Britain and the United States for imports from Brazil, Uruguay and Argentina may vary and become subject to desirable modifications to such an extent that strict compliance with the foregoing arrangement relative to supplying these countries with coal may be inadvisable from the standpoint of conservation of tonnage. Accordingly, the Governments of Great Britain and the United States will keep the Inter-Allied Maritime Transport Council fully informed relative to their programs for imports from the three countries named. If, in the light of this information, the Inter-Allied Maritime Transport Council determines wise, the United States, provided the coal is available, will carry to Argentina and/or Uruguay in bottoms controlled by the United States up to but not more than 150,000 tons of coal, relieving to this extent the obligation of Great Britain above referred to. The 150,000 tons of coal here mentioned is in addition to the 400,000 tons referred to in the preceding paragraph 2. Similarly, Great Britain will, if requested by the Inter-Allied Maritime Transport Council, and if coal be available, furnish coal cargoes from Wales to vessels of any registry or flag operating in the so-called “Triangular Route” (Brazil–United States–Europe), to this extent relieving the [Page 531] responsibility of the United States with reference to supplying Brazil with coal.

4. Control of distribution of coal in the several South American countries will rest with the country primarily responsible for exporting the coal to such country. It is understood that this control will be exercised by the Coal Exports Committee, or other controlling body, for England, and by the War Trade Board, or other controlling body, for the United States. Great Britain and the United States will, however, each keep the other fully advised as to the manner and method of distribution adopted by it. In determining upon distribution, due regard shall be had to the business done during the three years preceding the date of this arrangement, so that established import trade interests shall be protected.

5. It is understood that Great Britain will establish a parity for her freight rates to the River Plate, both for coal carried directly from England and for coal carried on vessels under her control from the United States at such a level as will work no hardships to the importing countries.

6. The United States and Great Britain will adopt the policy of requiring payment for both coal and freight to be made in currency of the purchasing country at par of exchange. Currency so secured in each country to be apportioned between the two shipping countries in proportion to the aggregate sums due to them respectively for coal and freights to all South American countries. Ships chartered by either country to be treated in all respects as if owned by that country—the charter money to be provided by the chartering country out of its own finance.

7. Neutral vessels, which being outward bound from Europe for the South Atlantic in ballast are by agreement exempted from calling for examination at a port in the United Kingdom and permitted to call at a port in North America, shall be chartered by the Shipping Board and the Minister of Shipping in the proportion of one-half to each, and when so chartered shall be deemed to be under the control of the chartering country; but such division of neutral vessels shall be applied pro tanto in satisfaction of the obligations under existing agreements for the division between the United States and Great Britain of neutral vessels.

8. This agreement is designed only to fix the relative responsibilities of Great Britain and the United States in respect of such coal shipments as, in the interest of the successful prosecution of the war, should be made to South America. The agreement shall give rise to no right or claim on the part of any South American nation to the benefits hereof, but the terms and conditions upon which any South American nation shall receive coal, as contemplated hereunder, are left open for negotiation and determination by the Governments of Great Britain and of the United States, acting in accord.

9. In the event that coal shall be loaded in the United States for shipment to Argentina or Uruguay pursuant to the provisions of paragraphs 2 and 3 hereof, participation in such shipments shall be allocated by the War Trade Board, or other controlling agencies of the United States, among American exporters with due regard to the [Page 532] shipments made by them to said countries during the three years preceding the date of this arrangement.

Captain Fisher is now en route to England, and immediately upon his arrival you should present to him the text of this arrangement with the view to securing adherence thereto by the competent British authorities at the earliest possible date. In the meantime, you will please inform Stevens and Rublee of this proposed arrangement. Please ascertain whether in their opinion this arrangement should receive the sanction of the Allied Maritime Transport Council. If they think this is advisable, you should communicate with us, stating the reasons therefor, before submitting the proposed arrangement to the Transport Council.

Lansing
  1. Of the British War Mission.