The Secretary of State to the Commission to Negotiate Peace
2632. Your 3166, July 15 [16?], 1 p.m. It was not intended in Department’s 2546 July 11, 4 p.m. to mean that the United States was committed to remove all restrictions whatsoever upon trade between this country and Germany. The restrictions to whose removal we feel committed are those which may be properly termed “Blockade Restrictions” which are directed against Germany’s general freedom of trade with all countries, but we do not understand that any assurance has been given which could be construed as a relinquishment of the right of any one of the Associated Governments [Page 241] to impose its own municipal limitations either upon the importation or exportation into or from this country of commodities, whose export or import it is desirable to control for purely domestic considerations. We are not restricting Germany’s general freedom to trade in dyes, potash and chemicals, but merely controlling their import into the United States for purely domestic reasons. Therefore, we feel clearly that we are according to Germany economic freedom as to exports in the full sense of the Supreme Economic Council’s interpretation of the assurance given to Germany by Mr. Clemenceau as stated in your 3037, July 9, 1 p.m. So long as we are fulfilling this assurance, it does not seem to us pertinent whether our municipal limitations exist by virtue of so-called “war legislation “or by what you term “protective legislation by Congress”. There is now pending before Congress legislation similar to that already enacted by the British, which, for the purpose of protecting our dye industry, proposes to subject all importations of dyestuffs to a licensing system. In view of this legislation, the Department, under the authority of Section 11 of the Trading with the Enemy Act, will, for a short period, control the importation of German dyestuffs and permit the import of only those dyes which are urgently needed in this country.
The differentiation between our present control of dyes and the control measures desired to be maintained by the British and French is that the former constitutes merely an internal domestic regulation of the United States and does not affect Germany’s general freedom of trade with other countries of the world, whereas the latter restrictions are understood by us to be directed against Germany’s general freedom of trade with other countries and not to be purely municipal limitations of the countries imposing them. McCormick approves the foregoing.