611.626/47: Telegram

The Commission to Negotiate Peace to the Secretary of State

4474. Department’s 3262, September 27, 4 p.m.

On September 25 a letter was addressed to the German representative at Versailles by the Interim Reparation Committee stating that the Committee had decided: (a) to take immediate delivery of 2200 tons of dyes for [France,] Italy and Belgium; (b) that this amount might be increased to 5200 tons to provide for the reservation of 1500 tons each for the United States and Great Britain; (c) that the prices should not exceed those of German list[s] of August 15; (d) that this decision shall not prejudice in any way the ultimate decisions of the Reparation Commission as to the option it holds under the treaty terms upon half of the dye stocks in Germany, on the condition [contrary] this decision is entirely independent of the [Page 457]treaty rights given to the Reparation Commission which rights are not affected in any way by this arrangement; (e) that the supplying of the lists of August 15, 1919, is not to be considered a beginning of the execution of annex VI of part VIII of the treaty. The letter explains, however, that such immediate deliveries would be a charge against the amounts to be delivered in accordance with the option should it be later exercised further; that Germany was to be allowed under the arrangement to dispose freely of an amount of each dye equaling that delivered under the present decision.
The arrangements proposed by this letter will be considered at an inter-Allied meeting on October 1 and [one] with the German representatives at Versailles has been called for October 2d. In view of the Department’s assent to anticipating the option which will not however be made use of unless found necessary it is now believed that a satisfactory result may be attained.
The need for prompt deliveries is fully understood and this will be insisted on as an essential factor in all discussions with the Germans.
As only approximately 500 tons of vat dyes are required the thousand tons remaining of total American reservation could be used for supplying such needs of American consumers as were developed by your questionnaire to consumers in general last summer.
While a representative of the Textile Alliance would be welcomed and given every facility, American Mission is of opinion that Herty is entirely competent to handle situation. In any case it seems unnecessary to delay until arrival of Textile Alliance representative before arranging for vat dye shipments as copies of all German lists of August 15 were forwarded you on September 22 giving prices, quantities, [factory] designations, concentrations, etc.
It is strongly urged that no licenses shall be issued except for dyes secured through inter-Allied action the proceeds of which transactions will go into reparation fund. According to understanding of American Mission the granting of licenses for dyes is exceptional and is a waiver by the President of the prohibition established under the powers conferred upon him by the Trading with the Enemy Act.89 The peace treaty provides for a specific method of securing the requirements of the Allied and Associated Powers for dyes and unquestionably contemplates that, so far as possible, the reparation fund shall have the benefit of these transactions. If licenses are granted for purchase through American agents of German manufacturers the reparation fund will be deprived proportionately of the intended benefit. Such action would undoubtedly create unfortunate impression on our Allies especially as stocks at German plants are [Page 458]ready for delivery, prices are low, and the meeting with the Germans is nearly at hand.
Referring to American Mission 4270, September 19, 1 p.m. [a.m.], last paragraph [but] two. Noyes states that he has personally ascertained that not one pound of dyestuffs can leave the Bayer plant without permission of the Rhineland Commission. This plant is covered by 3 officers and 50 soldiers and the officer in charge states that leaks are impossible. Noyes further states that he is informed that in the Bayer plant 700 tons of dyestuffs are on hand in excess [of] the quantity existing on January 15. He will report later after personal investigations of other plants. Polk.
American Mission
  1. See proclamation no. 1428, Feb. 14, 1918, Foreign Relations, 1918, supp. 1, vol. ii, p. 958.