File No. 763.72112/10369
The Chargé in Great Britain ( Laughlin ) to the Secretary of State
[Received 5.49 p.m.]
2516. War Trade Board [from Frothingham]:
1598. Bureau of Enemy Trade. Serious [Series of?] personal conferences with British licensing authorities develops fact that the lack of progress in coordinating confidential list licensing is due to difference between British and French confidential list policy for northern neutrals. British are willing to submit all such cases to Americans for conference decisions but fear delays and difficulties in similar action with French. French delegate here has very limited powers and is forced refer cases on to Paris for actual decision causing delays. British consider this would be fatal to efficient conference work in issuance of “permissions,” to correspond with and arrange approved imports from black-list firms in northern neutrals. At present such decisions are made here daily in connection with letters to and from black-listers intercepted by censors. The actual policy difference is that with respect to northern neutrals British consider first object of confidential list is to prevent any Allied exports reaching Germany and any German goods reaching overseas [Page 1066] destinations. British consider German and northern neutrals’ trade of a local character to be inevitable and protected in part by doctrine of neutral rights. Such trade may be hindered but cannot be effectually stopped by listing in practice. If trade with enemy were single cause for listing, great majority of all firms in northern neutrals could be listed. Such action they contend would do more harm than good, so the published list is a selected list of firms of German ownership, association, or control, whose trade it is definitely desired to destroy. In contrast [practise?] northern neutrals’ confidential list is largely composed of firms of neutral ownership whose outside trade can be controlled by blacklisting but which firms cannot reasonably be marked for destruction on the same grounds used for German-controlled firms. French do not agree with this policy which British apply exclusively to northern neutrals. British claim French overlook impracticability of preventing all border neutral trade and that French plan of blacklisting indiscriminately forces many wavering firms to open and steady trade relations with the enemy. I am inclined to agree with the practical side of the British argument with reference to northern neutral trade conditions. At the same time, coordinated licensing control is primary requirement. Question is whether you consider French should be brought into line with British argument or whether licensing should be coordinated at expense of present British blockade policy. Note that French trade interests in northern neutrals are negligible compared with those of United States and Great Britain. Frothingham.