851R.24/913/16
Memorandum of Telephone Conversation, by the Assistant Chief of the Division of Near Eastern Affairs (Villard)
I asked Mr. de Panafieu the status of the two French accord vessels now supposed to be loading at New Orleans for North Africa. He replied that the ships were idle because no movement of supplies had taken place from New York to New Orleans, owing to the failure of the Board of Economic Warfare to authorize the railroads to make the shipments. I said that we had been working on the matter very hard and hoped to have it straightened out shortly.
Mr. de Panafieu observed that the French Commercial Service in New York had been notified by the BEW that they would not permit sugar, which is now loaded on freight cars in 100-pound bags, to be exported in this form. The BEW had ruled that no jute bags could be used for the exportation of the sugar, and that it would be necessary to use cotton bags. Before the sugar could be moved, therefore, it would have to be unpacked from the jute bags and transferred to cotton bags. For this reason Mr. de Panafieu felt that it might be just as well to relinquish the sugar in New York and [Page 398] purchase a new supply at New Orleans whenever that became available.
Meanwhile, Mr. de Panafieu said, all progress on the supply program had ceased. I said that according to the BEW the shipments of cotton textiles, old clothing and powdered milk from New York had not been approved because export licenses had not been submitted. Mr. de Panafieu stated that two weeks ago all the export licenses had been delivered by his secretary in two bundles, one to Mr. Fagan personally and the other to Mr. Fagan’s secretary.