The Ambassador in France (Wallace) to the Secretary of State
[Received January 7—1:53 a.m.]
43. R–198. For War Trade Board and Davis.
1st. At meeting dyestuff experts today British refused to accept percentages cabled in our Rr–1712 and urged acceptance percentages [Page 475]cabled in our 5529, December 3, noon [December 3 p.m.], our R–112,3 which gave British Empire 35 per cent, United States 24 per cent. We refused. In order to avoid further delay, other Allies agreed to allow British Empire 35 per cent throughout and to reduce their percentages allowing United States to retain percentages cabled in R–171 and allowing increase for United States to 40 per cent in group alizarin[e] dyes, other than red, and to 42 per cent in group vat dyes other than indanthrene blue, as requested in your 9457 green undated. Group indigo, means only synthetic indigo and original percentages were British Empire 33, United States 5, Belgium 10, France and Italy each 23½, this remains unchanged for United States. Your 9475  would seem to indicate you understood our figure for indigo to be 23½. Indigoes are included in group vat dyes other than indanthrene. New group was added namely: lake colors with following percentages: British Empire 35, United States 35, France 15, Italy 10, Belgium 5.
In view large concessions made to United States by France, Italy, Belgium would be good policy for us to voluntarily reduce in favor of those three countries any percentage we can without injury to our industries and we would appreciate your suggestions to this end.
Percentages now formally accepted govern distribution daily production option until end February and experts agree these percentages must be revised periodically. It is proposed at once to request Germany furnish her production figures of all dyes for 1912 and 1913. Based on these, Allies will ask for 25 per cent or power [or more?] normal production and suggest Germany begin supplying at once dyes from daily production under same terms as 5200 ton option, that is without considering this an actual exercise of treaty daily production option. Program of manufacture to be based on as small list of dyes as possible, probably not more than 150 is to be determined at next meeting, February 2d, at which time percentages for distribution remaining reparation stock will also be determined.
2d. Entirely impossible to persuade other Allies to base percentages solely on German export figures, they absolutely insist actual needs must be taken into consideration. We consider we have won very important point in securing division into groups and if we insist on fighting for basis you want it would probably result in one general percentage for all dyes. France, Italy and Belgium will do all they can to favor us, but physically we are rich enough to buy open market when we cannot get full percentage shown by German export figures of 1913 and that they should not be forced to do so considering how much their textile industry has suffered whilst [Page 476]ours went on as usual and we were able to build up important dyes industry.
3d. Answering paragraph 6. Our R–163, December 22,4 gave result statisticians meeting which was subsequently modified by full meeting Dyestuff Subcommission [as] reported in our R–171 December 24.
4th. This cable has been prepared in cooperation with Jacoby5 who feels that taking everything into consideration United States has received favorable treatment in allocation as above, particularly as precedent established of division into large number of groups will enable trading with France, Italy and Belgium and possibly with British Empire on particular products. Rathbone.