611.626/47: Telegram

The Secretary of State to the Commission to Negotiate Peace

3361. Your 4474, October 1, 11 p.m.

Please explain what is meant by the provision “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”.
Does the plan now contemplated still contain the provision that the quantities secured shall not consist of more than 30 per cent, of the amounts under option of any particular dye, and, if so, will such provision prevent our securing the various quantities of the different vat dyes mentioned in Department’s 3279 September 29, 4 p.m.?93
It is our understanding that the London conference recommended only a two months’ supply for France, Italy and Belgium. Is it expected that we will be granted a six months’ supply of vat dyes? Or is the reservation of 1500 tons for the United States intended to provide only a two months’ supply of various dyes?
The Department does not understand exactly the practical steps you contemplate if the pending proposal is accepted by the German delegates. Neither Herty nor the Department has any authority to make a commitment on behalf of this Government to purchase or pay for any dyes. As stated in paragraph b of section 4 of Department’s 3262, September 27, 4 p.m., it is our view that such purchase and commitment can be made only by some agency such as the Textile Alliance and then only to the extent that orders are actually placed with it and payment guaranteed by the consumers. The applications referred to in Department’s 3262 and Department’s 3279 are merely indicative of the amounts which consumers wish to import and which we will permit them to import, but they do not constitute any firm commitment by them to take these dyes and to pay for them. We do not understand how Herty can request or take delivery of any specified dyestuffs simply on the faith that he would probably be able to dispose of them in this country. It is our view that he can do no more at present than state that our requirements will be approximately the amounts indicated in Department’s 3279, leaving it to the Textile Alliance, after receiving guaranteed [Page 462]orders, to state the exact figures and to make such commitments or arrangements for payment as may be necessary under the provisions of the plan. It is therefore important that we be advised as soon as possible what the conditions of payment will be for the dyes which our consumers secure.
We agree that arrangements should not be delayed until the arrival of the Textile Alliance representative, but the Alliance will have a distinct responsibility in this matter, and we feel that they should send a representative abroad if they desire. Mr. F. A. Fleisch, Vice President of the Alliance, has just left for Europe on other business and it will be convenient for him to attend to the dye matter at the same time. He will arrive in Paris about October 15th.
Referring to paragraph 6 of your 4474. Since the resumption of general trade with Germany on July 14,93 our control over dye imports has assumed in substance the character of a purely protective measure to safeguard our domestic dye industry against the influx of competing German dyestuffs. This attitude was clearly stated in Department’s 2632, July 25, 4 p.m.,94 in reply to Mission’s 3166, July 15[16?], 1 p.m.95 Under present conditions, it is the restrictions which are exceptional, rather than the reverse.
The Department is unable to assent to your conclusion in your 4474 paragraph 6 that the Treaty gives rise to any obligation on the part of this Government to compel our citizens to secure their dyes only through the Reparation Commission. The language of the Treaty merely accords an option so to secure them and the adoption of your view would prove most embarrassing, because, upon the ratification of peace, there will be no statutory authority to give it effect. The Longworth Bill does not grant any such authority, but, on the contrary, makes it expressly mandatory upon the Commission to issue licenses immediately for the importation of all dyes not obtainable in this country. Dulles, who participated in the drafting, has advised us that there is no obligation of any kind on the United States to insure the utilization of the Reparation Commission in the purchase of dyestuffs and that, in fact, it was understood in Paris that the United States would not avail of the option accorded by Annex VI. The Department is willing to continue to protect the domestic industry by restricting importations to limited quantities of dyestuffs not obtainable here, but we are not prepared to dictate to consumers the prices at which, or the channels through which, they shall purchase these commodities. We feel that we have gone as far as warranted in assenting to a plan to [Page 463]anticipate the option, leaving it optional with the consumers whether they will avail themselves of such plan. Having admitted the pressing need of vat dyes in the United States, it seemed clear that an adherence to the policy expressed above, together with the pressure brought to bear upon the War Trade Board Section by the consumers, demanded immediate action of the character described in Department’s 3325, October 3 noon [11 a.m.]. Furthermore, we had assumed, in view of the declaration secured by Dulles referred to in Mission’s 4173, September 12, 8 p.m.,96 that there would be no objection to our permitting our citizens to secure a limited supply of German dyes through ordinary commercial purchases.

Please show to Herty.