The Commission to Negotiate Peace to the Secretary of State
[Received October 7—8:35 a.m.]
4551. For Garvan from Herty.
At meeting with Germans October 4 Allies accepted German agreement [lists] August 15, both as to stocks and prices in marks at current exchange rates on the day of delivery at factory. Stocks and prices guaranteed by German Government. For each kilo of dye taken by Allies from stocks on these lists a kilo of same dye is released to Germans for free sale.
Under inter-Allied London agreement of September 15, made in advance of my reaching London, we are entitled in present distribution to 10.226 per cent of total stocks of each item on lists of August 15 up to 1,500 [tons]. Allied lists are to be filed with Committee on Organization this week. However, we reserve the right to file a supplementary list some time later if we desire to do so. Committee on Organization will forward lists to German manufacturers.
Our share of present distribution of stocks is only approximately 30 per cent of total amount of available vat dyes listed in War Trade Board 3279, September 29, 4 p.m.91 This because of War Trade Board desire for specific vat dyes and limitation of our percentage of each dye in the distribution.
After the general meeting of [with] the Germans I had a conference with Von Weinberg, present head of Cartel, and his associates, regarding direct purchase from plants of dyes needed to complete our requirements. Von Weinberg gave me in writing an offer to fill such balances at following scale of prices: (1) For vat dyes per kilo divide prices in marks on lists of August 15th by four and quotient equals price per kilo in dollars. (2) For general colors divide by five. Thus a vat dye listed at 10 marks per kilo would cost us at factory two and a half dollars per kilo while general color listed at 10 marks would cost us two dollars per kilo. Terms cash in dollars on delivery of dyes at plant. This offer holds for at least four weeks.
These prices represent at German factory, without including tariff duties, slightly less than current American prices on dyes now manufactured in America. French, Belgian[s], and Italians inform me that these prices conform to those they paid under previous authorization to purchase of German stocks at open market prices.[Page 460]
Efforts to gain consent of Allies to increase our percentage of present distribution unsuccessful as all are in need vat dyes. Vat dyes of the present distribution are so cheap that we should place immediately with Committee on Organization application for immediate delivery of our full share of each dye listed in War Trade Board 3279. Decision of War Trade Board outlined in number 3325, October 3, 11 a.m., is incredible, taken as it was just while negotiations with Germans were actually in progress here, although Department’s 3262, September 27, 4 p.m., stated that import licenses were being withheld “awaiting the outcome of the current negotiations in Paris”. Furthermore, I stated in Washington in presence of Mr. Bennett of War Trade Board that I would not undertake mission to Paris under any such policy as has now been decided upon because I was unwilling to engage in [a matter of] competition with German agents.
War Trade Board’s announcement that “Negotiations have been instituted with a view to securing German dyes at prices similar to those contemplated in annex VI of part VIII of the peace treaty with Germany” is very unfortunate in view of my repeated statements as to extremely low prices of peace treaty dyes. Department’s 3262, September 27, 4 p.m., [paragraph 2,] emphasized that “price is subordinate to the need of prompt delivery”.
War Trade Board in number 3325 questions accuracy of my statements as to prices of dyes under peace treaty distribution. This information was of course given correctly in my number 4298 September 20, 8 p.m.,92 and was confirmed in my 4507, October 3rd, to you.92 Germans on October 4 accepted without hesitation this basis of settlement on current exchange rates in terms of marks. I again repeat the statement. Von Weinberg informed me that stocks on August 15 were listed at these very low prices in order to conclude as quickly as possible this part of treaty. British inform me that Germans were required to submit prices in marks instead of Swiss francs as in lists of April 5th. Please cable quickly instructions as to peace treaty dyes. If they are desired, to whom shall consignment be made, from whom will Committee on Organization receive payment, etc. In view of War Trade Board’s action as to distribution of import authorizations my presence here no longer required. Offer of Germans regarding needs above distribution share holds good for at least four weeks and an order can be cabled direct to Von Weinberg in care of Leopold Cossella and Company, Frankfort, by Textile Alliance or whatever body may handle the matter. Of course there is the possibility that Germans may decline to comply with terms of their offer to me in view of the fact that the offer was made for the total amount [Page 461]balance [total balance] of our needs over and above our peace treaty distribution share. As soon as I hear regarding wishes as to peace treaty dyes I will return.