165.102/1108: Telegram

The Secretary of State to the Commission to Negotiate Peace

3785. For Rathbone from War Trade Board Section.

Mission’s 5062, November 7, 8 p.m. for War Trade Board from Rathbone; also Mission’s 5063, November 7, 9 p.m. Rathbone R–43 for Davis.99

I. As result of voluntary surrender by private importers of all licenses heretofore issued to them for importation of vat dyes, Textile Alliance will import entire allocated quantity. Inasmuch as only 30% of the quantity of the allocation is available from the amount already impounded, Alliance will accept certainly in substantial measure and probably in toto Cartel offer described in Mission’s 4551, October 6, 9 p.m. from Herty to Garvan. In the absence of Fleisch please notify Von Weinberg of Cartel, c/o Leopold Cossella Company, Frankfort, that his offer to Herty will be accepted substantially if [Page 470]not in its entirety and that the total of orders for each color of Cartel quantities will be placed with him about the end of the month. In order that Alliance may determine the extent to which it must accept the Cartel offer, Alliance should be advised of the total quantity of each color which is available from the amount already impounded. On Monday we will cable to you total quantities of each color for which orders have been placed with Alliance. Immediately upon receipt of such information you should cable us total quantity in weight of each such color which is available from the amount already impounded.

II. Method of payment. Alliance collects entire purchase price from each consumer when consumer places order with Alliance. Dyes ordered by Alliance from Cartel will be paid for by Alliance to Cartel under terms of Cartel offer. Dyes obtainable by Alliance from impounded dyes will not be paid for until ten days after delivery of dyes to individual consumer. If dyes conform with German Government guarantee, Alliance will pay purchase price with interest, as explained in Paragraph 3 below, in [to] Reparation fund at Paris in marks. You should therefore advise us what provisions have been made by Reparation Commission for receiving such payments whether by letter of credit to a designated agency in Paris or otherwise. If present status of Reparation Commission such that it is unable to accept such payments Alliance will deposit purchase price in bank at interest in trust for Reparation Commission or in United States Treasury without interest. Advise us of wishes of Reparation Commission with respect to these three alternatives. If consumer states within ten days dyes do not comply with German Government guarantee, consumer will notify Alliance of his election to return the same or to accept rebate in purchase price. In such case irrespective of consumer’s election purchase price will be held in trust for consumer or Commission by Alliance until Reparation Commission decides issue. If Reparation Commission decides that dye in such case conforms with German Government Guarantee American consumer will be governed by such decision and Alliance will pay purchase price with interest, as explained in Paragraph 3 below, to Reparation Commission in any one of the three methods described above which may be decided upon by the Reparation Commission. If Reparation Commission decides that the dye does not conform to the German Government guarantee it will advise the Alliance of the rebate that should be allowed. If consumer has elected to accept rebate Alliance will pay it to him. If consumer has elected to return the dye Alliance will return to consumer price thereof f.o.b. factory. In that case consumer being out of pocket for freight, insurance, duty, etc., will have claim against German Government to recoup disbursements. Accordingly, he will return dye to Alliance [Page 471]and Alliance will hold it as security for payment by German Government of freight, insurance, duty, etc., and Separation Commission should undertake to collect the claim from German Government in interest of consumer. When such claim is paid dye will be returned by Alliance to German manufacturer at his expense.

III. Interest on deferred payments. The question does not arise in connection with dyes obtainable from the Cartel. In the matter of the impounded dyes we conceive that it may arise in two cases.

When the dye conforms with German Government guarantee and when consumer does not object within ten days after receipt of the dye by him, Alliance in making payment to Reparation Commission will include interest from the date when title passes to the date when such payment is made to the Reparation Commission.
When consumer, after delivery to him, considers dye as failing to comply with German Government guarantee, and Reparation Commission does not maintain his objections. Alliance in paying Reparation Commission will include interest from date when title passes to date of such payment to Reparation Commission. Reparation Commission should therefore immediately decide when title passes.

In Mission’s 5063, November 7, 9 p.m. Rathbone’s R–43 to Davis, you stated that credit is to be given to Germany as of date of delivery of invoices. Please advise us immediately what delivery of the invoices you refer to, that is, delivery to whom and whether Reparation Commission believes that title will pass on said delivery of invoices. You will note Alliance will be unable to include interest in the payments unless it is advised by Reparation Commission of the date on which title passes. Alliance has already made arrangements with consumers to pay interest in these cases but wishes to be advised of the rate thereof.

IV. Department now considering successor to Herty. Selection will probably be made this week and appointee should sail early part of next week. We will cable you when definite decision is reached.

V. Referring to Paragraph 7, Mission’s 5062, November 7, 8 p.m., the statistics requested therein are now being compiled and will be cabled to you in ample time for the meeting of experts which you state will be held about December first.

Snow, United States Commercial Attaché at Paris, although not a dye expert is proficient in the use of statistics. We suggest, therefore, that he should be designated as our representative to attend that meeting.

VI. Refer Department’s 3575, October 27, 2 p.m.1 and advise us immediately concerning details of German Government guarantee on impounded dyes.

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VII. In relation to Cartel dyes please advise immediately whether Cartel guarantees prices described in Mission’s 4551, October 6, 9 p.m. Herty to Garvan, and also whether Cartel guarantees quality, strength, and shade of dyes and that they conform in every particular to Schultz type. Please advise also Cartel basis of adjustment of claims in order that same might be considered.

VIII. We are on the eve of making allocation six months’ supply non-vat colors, which we believe will be quite successful. We will cable you in this connection when the allocation is made in order that you may advise us of the amount of such non-vat dyes as may be obtained from the impounded amount.

Davis has seen this cable and approves.

  1. Latter not printed.
  2. Not printed.