611.626/30: Telegram

The Acting Secretary of State to the Commission to Negotiate Peace

3062. Your 4069, September 3 [6]. Supplementing Department’s 2908, August 21, 5 p.m., the need of vat dyes has become so urgent that we have decided to permit the immediate importation of a limited quantity of these dyes sufficient to supply consumers’ needs for the next six months. Dr. C. H. Herty sailed for Paris on September 3 as the official representative of the War Trade Board Section of the Department to ascertain and report to us concerning the feasibility of securing the above mentioned dyes, and also to lend such support as may be proper in connection with any purchases of these dyes desired to be made by the American consumers. Unfortunately, Herty will not arrive in time for the London meeting on the 9th but the Department has instructed the Consul General to attend and to inform the delegates that the United States needs a six months’ supply of vat dyes. The Department of course could not give Herty any authority to purchase dyes, but the consumers of the country are arranging to form a central importing agency which it is intended shall do the actual buying and distribution of such German vat dyes as may be available to supply the above mentioned allotment.

We are still much perplexed by the conflicting statements of the German importing houses on the one hand (see Department’s 2984, August 27 [28], 5 p.m.) that they are ready to deliver vat dyes at acceptable prices if we will issue the necessary import licenses, and the statements of the Mission on the other hand that serious difficulties are being experienced in securing the release of dyes by the Reparation Commission.

As stated in Department’s 2908, August 21, 5 p.m., our Advisory Committee would desire, if possible, to prevent any resumption of activity on the part of the old German agencies, and one of the chief objects in bringing about the formation of a central importing agency is to avoid their intervention. On the other hand, if, as they represent, the German agents are actually in a position to deliver immediately at acceptable prices the vat dyes which are admittedly urgently needed in this country, the Department is unable to see any sound basis upon which it can refuse to issue to these agents licenses to import such parts of the above mentioned six months’ allotment as the consumers may wish to place in said agents’ hands, thus making it optional with the consumers to import through the German agencies or through the new importing [Page 452]agency. We do not believe that our present statutory power authorizes us to discriminate against the German agencies in the matter of issuing import licenses. We fully appreciate that it is undesirable to permit the free export of dyes from Germany, and we have no present intention of permitting United States citizens to import any German dyes beyond the above mentioned limited quantities of vat dyes. In view of such a limitation, is it important, from the standpoint of the Reparation Commission, whether these vat dyes are imported through the old German agencies or through the arrangements which may result from the proposed conference on the 9th? In either event, the amount withdrawn from present German stocks would be identical. The Department is unable, at the present time, to decide the general question of policy as to whether this government can agree to an anticipation of the provisions of Annex VI, and, so far as American needs for dyestuffs are concerned, we do not feel that a decision of that question will be necessary, unless it should prove to be impossible to secure our present requirements of vat dyes at acceptable prices, either (1) through direct purchases made pursuant to the declaration contained in your 3870, August 23, 11 p.m., or (2) through the channels of the old German importing agencies.

Our present position is unsatisfactory in that while we are convinced of the necessity of permitting the importation of vat dyes, we are withholding licenses for their importation from the German agents who assert their ability to deliver, in the face of numerous despatches from you which indicate serious difficulties in securing these dyes through any other channel. We hope that with Herty’s co-operation you will be able to clarify this situation so that we may proceed at an early date to license imports of vat dyes. Please show this cablegram to Herty.

Phillips