763.72112/10840: Telegram

The Chargé in Great Britain ( Laughlin ) to the Secretary of State

3944. War Trade Board [from Sheldon]: No. 1916 confirming our 1879, November 15. Following is formal draft of blockade and trading with enemy policy, proposals which represent views of Allied Blockade Committee and of the British Government now submitted to Washington, Paris, and Rome for approval. Would appreciate your reply, if possible, for presentation at the meeting of Allied Blockade Committee on Tuesday 26th.

“1. The policy on trading with the enemy, blockade, rations, and exports to neutrals, requires immediate consideration in connection with the position created by the armistice.

2. The major interests of the Associated Governments require that factories should be turned over from war work to peace work as soon as possible, so that their peoples may remain employed; therefore not [now?] absolute reliance should be placed on regulation of priority rather than on the prohibition of export of goods manufactured of that material, so that deferred delivery orders for manufactured goods should not be interfered with. Restrictions on export should be modified as quickly as possible.

Prohibited Exports.

3. The list of prohibitions of export should be reexamined and the prohibitions should be removed, except as regards articles which for military reasons or because of shortage it is undesirable to export, where the shortage of material is relative and*

Rations.

5. Rations for neutral countries are settled under ration agreements made with the Allies. These rations should be reexamined with a view to increasing the ration of manufactured goods.

6. The import of fertilizers by neutral countries was strictly limited in order that a surplus of agricultural produce shall not be created and available for Germany.

7. In view of the recognition by the Associated Governments of an obligation to revictual enemy countries, the rations of fertilizers should be reexamined, so that after providing fully for the Empire and the Allies, the largest possible production of foodstuffs should be made in neutral countries. It might be made a term of the increase of fertilizers that the resulting foodstuffs should come under Allied control.

8. All alterations in rations in export prohibitions to rationed countries in statutory list and black list policy should be made with the concurrence of the Associated Governments; and all such Governments should act on similar lines.

Statutory List.

9. Trade with enemy countries is prohibited but under French and Italian prohibitions, the general prohibition against trading with the [Page 741]enemy extends to persons of enemy nationality in neutral territory, so it is necessary, in order to maintain equality embargo Associated Governments to retain for the present the statutory list.

10. It is proposed that the statutory list should be reduced by retaining only the following classes:

(a)
firms of enemy nationality or close association;
(b)
firms known to act habitually as covers for the above;
(c)
banks or financial agents which have acted habitually for transfers of money or credits in enemy interest and the known covers of such banks and financial agents who are now on the statutory list.

Subject to the reduction secured by the retention only of these classes that the statutory list should remain in force.

General Black List.

11. The retention of the general black list, in order to prevent contraband, is now a matter of relatively slight importance, an importance which would be observable by the advantage derived from the removal of an obstacle to the export trade but it is desirable for a time to distinguish between firms in neutral countries who have been friendly with the Allies and others who for their conduct have been put upon the general black list.

12. It is proposed therefore that the general black list should be reduced at once, retaining thereon only enemy firms or firms whose records show that they cannot be trusted, including some names removed from the statutory list. The general black list, thus reduced, should be enforced by the refusal of licenses for export, and should not be enforced in regard to financial facilities or in regard to imports from such firms. The censorship should, however, be continued in respect to the firms on the statutory list and on the black list.

Action To Be Taken.

13. If the policy outlined above is agreed to, instructions will require to be given to the Ministry of Blockade, Board of Trade, Foreign Trade Department, and War Trade Department. The Ministry of Blockade should negotiate to obtain the agreement of the Associated Governments to the policy. Therewith [thereupon] the other departments should carry it out.”

Laughlin
  1. Item four apparently omitted. [Footnote in the original.]