660H.1115/19: Telegram

The Secretary of State to the Minister in Yugoslavia ( Lane )

29. Your 178, June 29, 2 p.m. Although aluminum is listed as a strategic material, bauxite is not on the list of commodities which the War and Navy Departments have prepared for acquisition by outright purchase. Substantial reserves of undeveloped ore are known to exist in this country. Nevertheless the Army and Navy Munitions Board Commodities Division is looking into the question of whether they might be interested in acquiring a strategic stock of this material. You will be further informed as soon as a decision has been reached.

It should be clearly understood that one of the essentials of the British-American agreement relating to cotton and rubber is that the stocks acquired under this exchange are not to be available for commercial uses but are acquired against the contingency of a major war emergency, each Government undertaking not to dispose of its stock except in the event of such an emergency. Provision is made for joint consultation on other disposal of such stocks after a period of 7 years. This is a most essential part of any agreement which this Government would contemplate making and if you have reason to believe that the Minister of Finance regards his proposal as a means of acquiring cotton for use other than in a major war emergency, you should thoroughly clarify this point.