Papers Relating to the Foreign Relations of the United States, 1920, Volume II

611.626/208: Telegram

The Acting Secretary of State to the Ambassador in Frame (Wallace)

Washington, June 26, 1920—6 p.m.

1170. For Boyden for Perret. B–55.

Embassy’s 1306, 1307 June 21st, 1312 and 1313 of June 22nd.¹⁸

Complete agreement mutually satisfactory consummated between Department of State and Textile Alliance covering 1200 tons whereby entire right of purchase assigned Textile Alliance as stated in our 1080 requesting Reparation Commission and Cartel notified accordingly. Supervision by Department provided for in agreement will be fully carried out here. Textile Alliance unrestricted in giving orders and instructions direct to Germans.

2. All dye selections are subject only to Department of State approval which has already been granted to Textile Alliance here for original and supplemental lists (Your 1306) of 1200 tons. Textile Alliance has been authorized to trade approved non-importables for anything they consider preferable. It is desire of Department to give Textile Alliance all necessary freedom and assistance consistent with Departmental obligations.

3. Fleisch now ascertaining whether Textile Alliance willing undertake pool and daily production dyes along same lines as 1200 tons provided authorization broad enough to permit their acting freely within limits agreed upon here in advance.

4. Textile Alliance 50 per cent profits you mention merely revolving fund, and will be utilized on additional projects. Profits however are not available until liabilities terminate, that is, sometime after sale and delivery completed consequently desirable underwrite each project.

5. War Trade Board will inform Textile Alliance here what import licenses will be granted for dyes they may bring forward from time to time. Matter of shipping importable type arranged here. Constant changes importable list make it impossible keep you currently informed. Division between importable and non-importable lists will be decided here currently.

6. We understand decision of Reparation Commission as to rate of payment relates to payment to Commission. Commission not financially concerned in United States allocation beyond receiving dollars equivalent to list cost in marks at average exchange during week preceding shipment. Therefore Department of State and Textile Alliance unaffected by exchange fluctuations after shipment. Textile Alliance obligation is in dollars. Preferable defer question of anticipating Reparation Commission request for payments. Department sees little possibility of any profits being returned to Reparation Commission.

7. Textile Alliance has full authority to sell indigo and’ contemplates sale direct to ultimate consumer involving no intermediary and compromising no one.

8. Information desired regarding five year production requested our 1139 June 18.¹⁹

9. Lack of demand for German drugs and certain opposition to importation and because of non-existence of central association of drug trade compel decision to abandon plan of drug allocation.²⁰

10. Department has made all necessary arrangements regarding payment War Trade Board expenses for fiscal year 1921. Matter is settled.

Davis

18. None printed.
19. Not printed.
20. On August 26 the Secretary of State instructed Boyden by telegram no. B–91 as follows: “Department’s policy as follows: (1) It will not exercise option on impounded synthetic organic chemicals and considers no apparent demand exists at present for maintaining rights in quinine or cinchona bark. (2) It should retain right to participate in allotments from future daily production. (3) It will not exercise option on daily production January-June inclusive, 1920.” (File no. 611.626/238.)