Memorandum of Conversation, by the Assistant Chief of the Division of European Affairs (Hickerson)

Mr. Helm66 came in to see me this afternoon on his own initiative and gave me the following oral message:

“His Majesty’s Government propose to try to reach an informal agreement with Morocco, by which the United Kingdom would obtain Moroccan phosphate in return for the supply to Morocco of green tea and sugar. Their reasons for making this endeavour are their compelling need of phosphates which otherwise they could only obtain for hard currency or on a much longer ship haul and the political desirability of letting the Arab population of Morocco have essential supplies of tea and sugar.

“The United Kingdom Government proposes, therefore, to arrange through trade channels a deal whereby they would buy phosphate against payment into a blocked account, which would be used only for the purchase of tea and sugar through the United Kingdom. This would prevent the proceeds of phosphate sales from passing to metropolitan France in the form either of foreign exchange or of goods. The United Kingdom Government intend to confine the transactions, so far as possible, to tea and sugar, on the one hand, and to phosphates on the other, though it might be necessary for them to include small quantities of other goods.

“For political reasons the United Kingdom Government propose to let Spain and Portugal obtain supplies of phosphate by payment of sterling into the blocked account referred to above.

“We are asked to inform the State Department in confidence of the above, and to explain that His Majesty’s Government feel that some slight elasticity in their blockade of French Morocco is justified, so long as the continent of Europe does not gain in goods or foreign exchange thereby—in this case tea and sugar are particularly safe commodities from the British point of view.

“His Majesty’s Government do not, however, wish to exercise such relaxation of their control only in the interests of British trade. This is shown by their willingness to include Spain and Portugal. Moreover, they would be prepared, if the United States Government should so wish, to examine sympathetically any proposals which the United [Page 595] States Government might wish to put forward for a limited exchange of goods with Morocco, the legal essential conditions being that no payments should be made to Morocco or France, and that exports to Morocco should be goods which would be consumed there and not passed on to the continent of Europe.

“His Majesty’s Government do not at present contemplate any relaxation of the blockade of Algeria and Tunis, which they regard as in a different category from French Morocco, as they are more closely united with metropolitan France and have no Atlantic seaboard.”

Mr. Helm then stated that in the event the American Government was interested in arranging some kind of exchange of goods with Morocco he had been instructed to urge upon us the consideration of acquiring olive oil from that country. I commented that we were large purchasers of olive oil, but that most of our purchases came normally from Spain and Italy, and at the present time nearly all of our purchases were coming from Spain. He said that he was aware of the fact that Morocco produced very little olive oil, but that last year they exported 7,337 tons, mostly to continental France, Algeria and Italy. He said that it would be very helpful from their standpoint if the United States could pre-empt as much of this olive oil as possible.

Mr. Helm stated further that he had in the last day or so received an inquiry from Mr. Jesse Smith, Washington representative of the Armstrong Cork Company, who had expressed an interest in purchasing Moroccan cork. Mr. Helm added that Mr. Smith’s company would doubtless be interested in any arrangements which we might consider with Morocco.

I received Mr. Helm’s oral message and his explanatory comments, and told him that I would bring them to the attention of those officers of the Department dealing with the subject.

J[ohn] D. H[ickerson]
  1. A. K. Helm, First Secretary of the British Embassy.