File No. 600.119/698
The Secretary of State to the Ambassador in Great Britain ( Page)
7677. For Sheldon [from War Trade Board]:
No. 463. Your No. 530, Embassy 9920, May 7, 6 p.m. We are not inclined to view with favor the adoption of the principle that the embargo against northern neutrals should be generally relaxed in favor of pro-Ally firms, even under the restrictions set out in your cable. We feel that it would seriously weaken the force of our embargo since the receipt of staple commodities by a firm not only benefits that particular firm but increases the prosperity of the country as a whole, giving additional and profitable employment for capital and labor, and giving the public generally an opportunity to participate in the goods manufactured therefrom. We have, of course, already agreed to the principle of permitting imports of nonessentials so that the additional relaxation which is suggested would operate primarily to release essentials.
To adopt the plan you suggest would in our opinion be the practical lifting of the embargo, exports to be controlled by a white list rather than by a black list. We also feel that the creation of such a white list would be a very difficult problem and likely to create commercial jealousy among the Associated Governments. In particular we feel that it would be difficult to prevent American merchants from feeling that British merchants had far greater facilities [Page 986] for presenting to A. B. C. their claims for right to trade with neutral concerns with whom they have heretofore had business relations. Unless, therefore, stronger arguments can be adduced than appear in your No. 530, we are disposed to oppose the adoption of the course therein suggested. We would prefer, if some further relaxation is deemed essential, that it take the form of an extension of non-essential list.