740.00112 European War 1939/516
The British Ambassador (Lothian) to the Secretary of State
Memorandum
The British Ambassador has the honour to acknowledge the memorandum of the Secretary of State of November 9, 1939, regarding certain incidents which are reported to have occurred recently at Montevideo, Uruguay, involving the operation of the so-called British black list.
Lord Lothian has received incomplete copies of telegraphic reports sent by the British Minister at Montevideo to the Foreign Office on these incidents, but they do not appear to corroborate the statement in the memorandum, in regard to the first incident, that “an employee of the British Legation in Montevideo is reported to have informed the local agents of the American Moore–McCormack Lines that if freights were carried for firms on the British black list, steps would be taken to see that other shippers canceled all freights already booked and refused to ship on the line”, nor the belief of the American Minister, in regard to the second, that the letters which the Sprague Line received from ten Uruguayan shippers stating that they would be unable to ship on the line were sent “as a result of the activities of the aforesaid employee of the British Legation.”
The British Minister’s telegrams confirm the statement in the memorandum that he and his assistant assured the American Minister at Montevideo that there had been a misunderstanding and misrepresentation of their attitude, but indicate that there was no question of pressure having been brought by his assistant on the local agents of the Moore–McCormack Lines not to accept shipments from local firms included in the British list, that decision having been taken by the local agents themselves with the concurrence of their principals in the United States.
The fact remains, as stated in the memorandum, that ten firms in Montevideo wrote to the local agents of the Sprague Line, but the tenour of the letters, according to the British Minister’s reports, was not that those firms could not ship Uruguayan cargo to the United States because of the fact that this American company transported cargo to the United States for another firm in Uruguay which firm the British Government believed to have connections with an enemy belligerent, but rather that the ten wool exporting firms proposed to suspend their freight bookings with the Sprague Line pending the “clearing up of the situation”. In the event it appears that the letters were cancelled.
Lord Lothian appreciates the action of Mr. Cordell Hull in calling his attention informally and frankly to this matter and is equally [Page 778] anxious that there should be an informal understanding and a meeting of minds as to attitude and interpretation. But in these particular incidents more is involved than the operation of the so-called British black list. It would appear from the British Minister’s telegrams that at least some part of the consignments were of wool acquired by German interests through the German clearing account with Uruguay and sold to the United States through listed firms by the local German bank acting on behalf of the above German interests; in which case the dollar proceeds of the wool are held in the end at the disposal of the German government.
Lord Lothian is sending a copy of Mr. Cordell Hull’s memorandum to the Secretary of State for Foreign Affairs and will be glad to communicate to him further information which may result from enquiries made in Montevideo.