The Commission to Negotiate Peace to the Secretary of State
[Received October 13—10:32 a.m.]
4633. Your 3361, October 7, 2 p.m. Answering your paragraph 1, [the] concluding word “further” quoted as contained in American Mission’s 3262, September 27th, 4 p.m. [4474, October 1, 11 p.m.], paragraph 1, is not in that cable as sent. The stocks given in the list of August 15th [constitute] by agreement the basis for a final settlement. Advanced withdrawals from these stocks as arranged October 4th will diminish by corresponding extent amount of each dye available for final exercise of peace treaty option.
Your paragraph 2. Plan agreed on with Germany provides that France, Belgium and Italy together may in present partial distribution secure not more than 30 per cent of the 50 per cent option on each item of stocks listed, that is, 15 per cent of total weight of each item provided such withdrawals shall not aggregate [more than 2200] tons. Under London agreement of September 15th United States, Great Britain together have privilege of withdrawing not more than 40.9 per cent [of the 50 per cent] option on each item of stocks listed: that is, 20.4 per cent of total weight of each item provided such withdrawals shall not aggregate more than 3,000 tons. As United States and Great Britain are placed on equal [basis] under the London agreement, United States are entitled to withdraw 10.225 per cent of total weight of each item listed provided that total weight does not [exceed] 1500 tons. On this basis it will be impossible to secure the full amount desired by consumers of all dyes specified in number 3279 September 29th, 4 p.m.97
Your paragraph 3. [These preliminary] withdrawals from stocks are not based on a supply for a definite number of months. Definite tonnage allotments have been made [regardless of] time requirements. If, as is expected, [the peace] treaty will soon become effective a prompt exercise of the option on the remainder of stocks as of August 15th may be looked for.
Your paragraph 4. Neither American Mission nor Herty have ever considered a commitment of our Government to a purchase of dyes or payment [therefor] but it was the understanding that either the Consumers Association referred to in your 3062 September 8th, 8 p.m., or the Textile Alliance referred to in your 3262 September 27th, 4 p.m., would be able to advise promptly as to what dyes should be [Page 467]applied for under the terms of the treaty. It was presumed that on account of the very favorable terms indicated by the lists furnished by the Germans a guarantee or [specific] statement would be forthcoming which would make it possible to announce definitely [the] American requirements. This was strengthened by the authority conferred by Department’s 3262, September 27th, 4 p.m., to anticipate the [option]. Such anticipation even though partial would of necessity entail at least a, moral obligation towards our Allies to make ourselves responsible for a definite [quantity] and though it was understood that it was not necessary under the arrangements actually made to anticipate the option it is evident[ly] equally unsatisfactory in that case to make only a non-committal estimate of what the consumers needs may be. The other powers have in each case definitely stated what amounts they are willing to [take] and it is difficult to see how stocks can be reserved for us until the consumers have made up their minds how much they wish to obtain by benefit of the treaty clauses and how much from outside sources. It is obviously impossible to make the amount ordered from the Germans in pursuance of the present arrangements a varying quantity. However, in view of your paragraph 4, distinct statements will be made that we are not authorized to take up any specific quantity but must await definite orders from the consumers.
Outside of the treaty provisions and in order to cover the shortage of dyes resulting from the small percentage allotted under the London agreement, Herty obtained an offer from the Germans to complete the amounts of each item in your 3279 September 29th, 4 p.m. He has never, however, contemplated taking delivery of any specified dyes except [on] authorization of the Consumers Association or the Textile Alliance and the offer of the Germans committed us to nothing but afforded a means of quickly filling American needs.
Your paragraph 7. American Mission has never been of opinion that the treaty in any way compels American citizens to secure their dyes only through the Reparations Commission but has been in entire agreement with the language of your 3622  in which you state that it is desirable that all American dye requirements should come through the Reparations Commission so that the value thereof may be credited to the reparations account. It was felt that our citizens would naturally prefer that as far as possible funds arising from dye purchases should go to the reparations funds rather than to individual German manufacturers and agents. Polk.
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