File No. 103.94/554
The Chargé in Great Britain ( Laughlin ) to the Secretary of State
[Received 11.47 p.m.]
2684. For Baruch, Legge 1 and Scott from Summers in Italy:
Present attitude of Raw Materials Department, of which Weir 2 and Goldfinch 3 responsible heads, renders further negotiations on leather, wool, flax impracticable without complete submission to their wishes.
August 29, made proposal for leather executive which France and Italy promptly accepted and Goldfinch ignored. Weir also ignored Summers’ request for decision September 4, and Summers’ reference to Chamberlin September 28 has had no action because Chamberlin ill. The reason is proposed location in Washington.
Wool program committee. Italy has asked that it be changed to executive but we disagree because Goldfinch as chairman would be unacceptable and if not chairman he would continue to nullify wishes of committee through his control of British supplies. His actions comprise refusal to put motions, refusal to comply with proper resolutions of committee on points within its discretion, excessive British civil and export program, refusal to separate as instructed by committee British provision for Allied military and civil needs which France and Italy demanded, because with all Allied provisions in a single item, they claimed inability to obtain due benefit of allocations. Also as between allocations of wool or tops to be manufactured by them or cloth made in England, they can only with great difficulty obtain the former. This is continuation of Goldfinch policy of 1917 which forced United States into South American market while accumulating 1,250,000 bales in Australia which by present crop is increased to 3,600,000 bales. His claim to Patterson August 1917 was that after providing for France and Italy there was insufficient wool for the United States. French representative states in March 1918 similar claim was made that provision for United States and Italy precluded supply of France.
Wool purchase. Goldfinch and Weir continue denial of principle of our claim for equal price treatment whose admission would require revision of contracts with colonies made last June with warning and full knowledge of our attitude. September 10 Goldfinch, formally, and October 9 Weir, informally, refused permission to continue loadings [to avoid issue of price].[Page 612]
Flax grown in Ireland or imported is not licensed for export, likewise partial manufacture such as yarns. Gillings threads rationed to individual exporters on basis 1916 who further restrict exports by failure to use allocations. Manufacture and export of woven goods, table linen etc., although luxury, continues on large scale and existing restrictions are in process of removal in spite of assertions of necessity, using all excuses for refusal of War Trade Board requests, and poor Russian prospects reported by consuls. War Trade Board and other requests for licenses as exceptional acts of grace are proven useless and wrong in principle and Patterson is seeking modification of regulations as to yarn and Irish flax without promise of favorable consideration or prompt action pending meeting of Flax Control Board next week. Two thousand tons more Russian probably obtainable.
General situation. Commodities of Raw Materials Department are not pooled in Allied interest but used directly to benefit British trade during and after war and avowedly to employ Belfast and Bradford labor. French privately agree and Italian representative authorizes statement [approves] most of this memorandum. … We have stated case to Reading who promises consideration of general questions and intimates favorable decision tomorrow on interim wool shipments. Patterson and Boyd.1