Papers Relating to the Foreign Relations of the United States, 1918, Supplement 1, The World War, Volume II

File No. 657.119/320

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

[Telegram]

London , February 26, 1918—7 p.m.
[Received February 27, 5.32 a.m.]

8814. For your information and the immediate attention of the War Trade Board. Sheldon has just received from Lord Robert Cecil the British comments on the latest Norwegian counterproposal and the general state of negotiations with that country. Herewith follows a brief summary of the letter.

While the Norwegian reply is not the unqualified acceptance of the American proposal on which it was understood to be the intention of the United States Government to insist, and while the reply regarding the rations might be viewed unsatisfactorily in many respects, nevertheless the points of view of the negotiators appear now to have approached each other sufficiently to justify the hope that an agreement in principle of all outstanding points may shortly be reached.

If this hope is realized, the first stage in the negotiations will end, and it will remain to embody the understanding arrived at, in the form of an agreement. I therefore wish to take this opportunity to draw the attention of the American Government to certain further considerations, offering these merely as useful suggestions, it being in no way our intention to encroach upon the province of the United States authorities responsible for the conduct of negotiations.

These are the following:

1. The War Trade Board has to date treated the Norwegians with great liberality both as regards rations and as regards exports to the enemy, and the American Government will no doubt realize the importance of not allowing their liberality to be abused, and of defining, in the strictest terms in the formal agreement, the limits set to the concessions made by them, and the reservations accompanying those concessions. …

2. Our hope has already been expressed that the American Government will not commit themselves to any undertaking to guarantee the arrival in Norway of goods to the amount of the proposed rations. This point becomes extremely important in view of the Norwegian note of February 2, as the Norwegian Government regard joint communication made to them on January 9 by the United States and Allied ministers at Christiania, (to the effect that: “Provided a satisfactory arrangement with the United States and the Allies was concluded Norway would receive rations to satisfy her legitimate requirements”) as superseding what was said in the War Trade Board’s letter of December 20 and as meaning that the United States and the Allies now undertake that goods to the amount of the rations will actually reach Norway. This is, of course, not so and we consider the War Trade Board’s letter goes to the utmost length to which it appears possible to go in this matter of assuring supplies, and we trust that the Norwegians will be disabused of any idea to the contrary.

3. Furthermore, to guarantee the arrival of these supplies would be to put a premium on the sinking of Norwegian supply ships by the enemy. This point is a very important one, bearing on the amount of tonnage at the disposal of the Allies in view of the stipulations of the tonnage agreement that we are to leave Norway sufficient tonnage for her own requirements. The United States and Allied ministers at Christiania have discussed the seriousness of this matter and the desirability of encouraging the Norwegians to obtain a formal undertaking from Germany not to sink ships carrying supplies to Norway. It is possible that the Norwegians should be moved to make such an undertaking a sine qua non of exports to the enemy.

4. In view of the Norwegian pretensions it shall be made clear that any rations fixed comprise the imports of the articles specified from all sources, including European sources, and for all purposes, and that extra quantities must not be expected in the absence of special specific arrangements for the purpose of producing articles exported to the Allies. It would also appear desirable to have an understanding first as to how far stocks already in the country at the date on which new rations begin are to be chargeable to those rations. We hope that apart from existing commitments Norway will not be allowed to draw on the United States for any portion of the rations until a satisfactory final agreement has actually been signed.

5. Another point we consider of importance to deal with in very precise terms in the final agreement is that of the maintenance of exports to the Allies, these supplies being in some cases essential to the Allied cause, such as that of the nitrates supplied to France. The assurances hitherto given under this head by the Norwegians have been vague and are further qualified by reservations in regard to home requirements, which latter though sounding reasonable cannot be admitted in a general form without danger. We wish to call attention to a tendency to regard certain commodities such as nitrates and carbide as assets for the purposes of the inter-Scandinavian exchanges and to invoke home requirements, such as aluminum, for purposes for which aluminum has never been used before, that is, as a substitute for copper for electrical purposes. These tendencies might be developed to a dangerous extent under German tutelage, and can only be counteracted by a definite understanding that, so long as the agreement is in force, the Norwegian Government will do nothing to interfere with exports to the Allies on at least the same scale as exports before the United States Government entered the war, or to prevent such exports from being increased where such increase can be effected without prejudice to bona fide Norwegian requirements for home consumption. In this regard I would call your attention particularly to the cases of the refined aluminum and the manufactured condensed milk, certain raw materials for the production of which are sent to Norway by the Allies. It is for consideration whether a list of articles the export of which to the Allies will be allowed unreservedly so far as the Norwegian Government are concerned up to stated minimum amounts should not be appended to the agreement.

6. The United States Government will doubtless consider it necessary to define in the formal agreement more exactly than has hitherto been done the manner in which the distribution and ultimate disposal of rationed and other articles reaching Norway is to be controlled in the interests of the blockade. It is essential not only to prevent direct trade with the enemy but that such conditions and requirements should be imposed as to exclude the possibility of indirect trade with the enemy through neutrals. It is also essential that the goods should not at all come into the hands of persons or firms identified in any way with enemy interests and it is desirable that the distribution of the goods in Norway should be as equitable as possible.

7. It is felt here by our representative in Christiania and I believe by the War Trade Board that in the case of articles previously covered by agreements made between the British Government and various trade associations in Norway with the concurrence of the Norwegian Government the necessary control can best be exercised by reviving those agreements and that this system might usefully be extended to other important articles. The British Minister at Christiania received the impression that the Norwegian Government favor the alternative of a new system more or less on the model of the Netherlands Oversea Trust. We wish to disapprove of this latter proposed system, and we hope the United States Government will hold the Norwegian Government to the statement in their note of February 2 that they are “favorably disposed to an eventual renewal of the so-called branch agreements and will make express provision in the formal agreement with the Norwegian Government for such renewal and for the extension of the “branch agreement” system to other important articles. A considerable extension of the system now in vogue should present no difficulty as we have been for some time in touch with associations which are prepared to undertake the control of many articles not hitherto covered by agreement. Goods remaining outside the system even after such extension might continue to be imported under the “ordinary undertaking “which has worked satisfactorily, or some central body might be set up to deal with such goods only. The ordinary undertaking might be improved by the addition of a clause forbidding resale or sale of products to persons or firms not allowed to receive goods under agreements.

8. As all branch agreements are not equally satisfactory, we are therefore, willing to include in the formal agreement some formula which will admit of the previous branch agreements being revised and standardized.

9. We trust that the United States Government will make no concession to the Norwegians regarding what they call “the burdensome clause system.” Controlling directly as they do so many of the sources of imported articles, the United States and Allied Governments are more than ever entitled to insist on specific guarantees as to the disposal of goods allowed to reach Norway, and of all products, however remote, of such goods.

10. As to whether the branch agreements should be revived and extended in the form of agreements between the British Government and the Norwegian associations concerned to which the United States Government might adhere, or whether they should be given the form of agreements between the United States Government and the associations supplementary to the main agreement between the United States Government and the Norwegian Government, we would recommend the first alternative since we are already in close touch with the associations and since a revival of the agreements in this form would be the simplest course as respects procedure. This method would also admit of supplementary negotiations with the associations being conducted in London or Christiania or both, and this would be advantageous in negotiations with a large number of associations owing to the greater accessibility of these capitals as compared with Washington.

11. We hope that, in defining in the formal agreement the obligation of the Norwegian Government to furnish statistics, it will be definitely laid down that such statistics must be detailed as regards commodities, countries of origin, and countries of destination; that they must be furnished for stated periods and within a stated time; and that they must include all trade whether with neutrals or belligerents.

12. With regard to the exports to be permitted to the enemy we trust it will be made clear (a) that the agreed figures include all exports for all purposes, regardless of whether the goods are sent in exchange or whether they represent the product of raw materials sent from enemy countries to be worked up; and (b) that all application for permission to export must be considered with reference to the three-fold limitation imposed by the fixing of the specific quantities for certain articles, by the exclusion of all export of articles not on the agreed list, and by any guarantee or [clause] affecting imported articles, raw materials, or measure of production. In this regard the reference to iron ore and zinc in the latest Norwegian communication illustrates the importance of first stipulation (a); as for (b) it would appear to have been already made sufficiently clear, but the Norwegian suggestion respecting aluminum makes this seem doubtful.

13. Finally, I would draw attention to the necessity for specific provision against the danger of quantities of goods, over and above those expressly allowed, being exported to the enemy through adjoining neutral countries. The only way to guard effectively against this would be to stipulate that all exports from Norway to such countries, whether the goods are of purely Norwegian origin or not, should be made subject to agreements which will preclude reexport or export of products from those countries to the enemy.

The British Government are very anxious that these points should be noted before the drafting of the final agreement with Norway and they emphasized the importance of the phraseology of our stipulations. Copies of Cecil’s letter will be forwarded in the pouch leaving this week. This telegram has been repeated to Christiania for the information of Schmedeman.

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