800.24/342½

Memorandum by Mr. Frederick Winant of the Division of Exports and Defense Aid to the Assistant Secretary of State (Acheson)

Civilian Supply Requirements of the Near East Countries and The Middle East Supply Centre

Mr. Acheson: The procedure for handling the civilian supply requirements of the countries comprising the Near East must be reexamined in the light of the procedure now established for that area by the British, the combined controls now existing in Washington and London, the effect on the civilian population of present and potential military developments in that theater of war, and the political influences that may be brought to bear on the general situation.

The present manner of handling Near East supplies from the United States sources has evolved from a normal export practice through a period of ever increasing regimentation, the consequence of growing war pressure. Foreign trade as a private enterprise has changed so that today there is foreign trade of either governmental undertakings or of private enterprise under strict governmental controls. [Page 5]The shift has not eliminated the general machinery of foreign trade; nor has it eliminated the private importer or exporter, but it has very definitely curtailed his activities and has subordinated his interests to those of the national governments. The practical effect of the shift, therefore, is that our Government deals in fact with other Governments. It is the procedure between governments that is under discussion at this time.

The controls in effect in the United States and the United Kingdom and in the countries of the Near East do not mean an arbitrary assumption of power; rather they reflect a realistic understanding of the present life and death struggle for survival, with all the dislocations incidental to such a struggle. Strategic and essential materials suddenly become surprisingly scarce, in some instances to the point of non-availability, and their handling becomes further circumscribed by a shortage in facilities for shipping, unloading and distribution. The application of governmental controls indicates an effort to bring order out of chaos to the end that the materials which are available may be put to their optimum use.

In the Near East there are at the moment two different systems of controls governing civilian supplies required by the countries of that area. The British have carried the controls of the individual countries into a broader control for the entire area, embodied in the Middle East Supply Centre (“M. E. S. C.” or “the Centre”). The Americans have been satisfied to leave the controls at the country level. As the two systems have not been correlated there is a dual administrative authority, accompanied by the inevitable complications of such a situation.

The Near East presents a peculiar problem in that, generally speaking, it is not a theater of war of actual fighting but a theater of war of potential fighting, and in the interim a service of supplies area on a grand scale. Materials of war pass through here to the fighting fronts in Russia and Libya. The civilian supply problems become acute as they become of secondary importance.

Although this paper is concerned principally with the civilian supply problem, it cannot ignore the logistical situation. Iran happens to combine both types of supply problem to a marked degree and therefore deserves some special consideration.9 The primary purpose is to get war materials on up to the Russians. To accomplish this successfully, the civilian side of the equation must be kept in some sort of reasonable balance. Add to this difficulty the British concept for control by subordinating Iran to the broader aspects of the area as a whole and the problem assumes challenging proportions. Whatever conclusions are reached for a joint or combined authority for the administration of civilian supplies in each country of the area, or for [Page 6]the area in its entirety, it is a matter of cardinal importance and fundamental necessity that that portion of the area through which supplies travel to reach the Russian front be kept intact and in complete independence of the surrounding territory. The area might be termed a “Russian corridor.” For a clear cut segregation, Iran and the necessary Persian Gulf ports and their facilities might be separated from the Near East group and set up as a service of supply area for the Russian theater of war in so far as United States supplies, their controls and their administration are concerned.

A neat case in support of this theory (and admittedly still trespassing on military territory) is found in the dispute now going on between the British and United States military authorities regarding the use of two cargoes of lumber now awaiting unloading at the port of Basra. The lumber was sent out to increase the berthing facilities across the river from Basra, that is for improving the facilities for handling Russian supplies. The British authorities had, and apparently still have, other ideas. Their plan is to erect some piers further down the river to supplement the port facilities of Basra. To sum up the dispute: The Americans wish to improve the facilities for handling supplies through Iran; the British desire to enlarge the facilities for handling supplies for Iraq. And in the meantime, the two vessels lie idle with only the prospect ahead of three weeks’ time spent in unloading after the dispute is settled.

The complications of a dual authority are manifest in most of the countries from which the United States receives requests for civilian supplies. The British have established a program for the individual countries through their control system for the area. A good deal of programming has been done without consultation with the United States authorities concerned. The Americans in turn have acted upon requests of each given country without consultation with the British authorities concerned. The inevitable result has been a collision of ideas at some point in the process of procurement, generally at the final stage of export clearance. The answer, of course, is simple. While joint or combined boards and committees have been established at the two chief control centers, Washington and London, application of the joint authority has not had time to permeate the system to its peripheral points. The question for correct answer is, of course, how best to install a joint authority for practical working throughout the system. Before attempting to answer the question it might be well to have a look at the organization set up by the British to exercise control over the area as a whole—the Middle East Supply Centre.

The M. E. S. C. was created in April 1941 to deal with civilian requirements. The need for such an organization was primarily due to shipping difficulties which followed the fall of France, with consequent [Page 7]loss of effective control in the Mediterranean. The main functions of the Centre are:

  • “(i) ‘to review and co-ordinate the joint resources and civilian requirements in essential commodities of the territories (including raw materials required for their war industries) in order to make the Group as self-supporting as possible; and to exchange relevant information with corresponding control organizations in each territory;’ and
  • “(ii) ‘to estimate the balance of any essential requirements which must be imported from outside the Group and make recommendations accordingly to the authorities concerned, with a view specially to the best possible use of available shipping …’.”10

The organization consists of:

(1)
Director General.
(2)
Three Departments:
  • Supplies: Sections dealing with areas and with groups of commodities.
  • Economics: Encourages self-sufficiency; research data sent to appropriate sections of Supplies Department.
  • Administrative: Executive action on imports, movements of ships, loading program.
(3)
Representatives in the several countries.

M. E. S. C. maintains liaison with the war effort through the Supply and Transportation Sub-Committee of the Middle East War Council, which is partly civilian in membership and of which the Minister of State is chairman, and through other smaller executive committees.

The Centre is not authorized to perform commercial transactions, which are thus reserved for established private companies or for the United Kingdom Commercial Corporation (U. K. C. C.).

The area of jurisdiction may be defined as all non-enemy territories bordering the Mediterranean (from Malta eastward), Iraq and Iran. Turkey is included only in the matter of cereals and like commodities.

The Centre, as indicated under its functions, passes on essentialities and assigns priorities to the approved material; it prepares programs for the individual countries on a six month basis; and it studies local economies and offers improved planned economies. A noteworthy example of this was the problem of cotton versus wheat in Egypt. The M. E. S. C. was instrumental in curtailing the planting of cotton and the partial replacement of this crop by heavier plantings of wheat.

All in all, the M. E. S. C. performs a very constructive service for the war effort and the civilian population in the Near East area.

[Page 8]

Having in mind this highly organized machinery on an area basis, it is easy to visualize the difficulties which would be encountered if the United States were to pursue an independent course of action through a loosely organized machinery on a country basis. It is apparent that some adjustments must be made. The first move, clearly indicated, is for closer collaboration at the point of origin of the supply requirements. This step has no far-reaching implications; it is nothing more than the application of common sense.

For instance, in Baghdad there is a Central Supplies Committee, made up of local British and Iraqians, and a British representative from the M. E. S. C. There should be United States representation on this Committee.11 It would seem a simple and safe proposition to arrange to have a group from our Legation participate in the deliberations of the Committee. This would at least give the United States authorities a clear picture of the original requirements, and undoubtedly any revision or changes made by the M. E. S. C. Also the American Legation would in this way be currently informed of any program worked out by the M. E. S. C. for Iraq, and would inform the Department of the plan.

In addition to the need for collaboration at distant points there is need for better team-work in Washington. Eventually, some practical type sub-committee of the Combined Raw Materials Board and perhaps of the Combined Shipping Adjustment Board should be put into operation. Until that arrangement is developed further, considerable benefit can be derived from informal and non-official meetings such as those recently held in DE.12 It is from, these latter meetings that a good deal of the information in this paper has been garnered.

The above provisions along with a continuance of the present practice for a member, or members, of the United States Legation in Cairo to join informally with the M. E. S. C. would result in a perfectly sound working arrangement. To check this against the objectives set forth in paragraph one of this memorandum, the suggested procedure would allow for the following:

(1)
Satisfactory integration with the existing British machinery for the Near East.
(2)
Practical adaptation to existing combined controls and flexibility for further adjustment if and when appropriate sub-committees are put into effect.
(3)
Complete information on requirements.
(4)
Political strength, provided caution is exercised in commitments.

[Page 9]

The alternative course of action for the solution of the Near East supply problem calls for partnership with the British. The action is simple—United States representation on the M. E. S. C.—but the consequences are complex.

Until the present time, it has been conceded that the British have primary responsibility for the eastern Mediterranean area,12a and the treatment of that area has been tacitly left to their general control both in military and civilian matters, and to a lesser degree in political matters. With the increasing aid to that territory through Lend-Lease shipments and the substitution of United States suppliers for the former European suppliers, United States interests in the Near East have become of increasing importance. As far as the future may be appraised, the present trend will undoubtedly continue. From the point of self-interest, therefore, the United States should consider the possibility of playing a more important role in Near Eastern affairs.

The British attitude toward American representation on the M. E. S. C. is one of extreme cordiality. It was the British idea to begin with, and it is the British who still strongly urge United States participation. The type of representation has naturally been left to the American authorities, other than an informal and general agreement that there should be one military and one civilian representative. Whether the British envisage the participation as a full partnership is not known, but the chances are that they think of the move as considerably less.

The British want United States representation on the M. E. S. C. to obtain smoother functioning of the machinery of supplies; to get a unified Anglo-American attitude toward questions of policy and administrative detail; and to promote greater American responsibility in the Near East as a sphere of influence and as a theater of war. The British believe particularly that “aid to Egypt” or “aid to Tunis” should be raised to the broader plane of aid to the Near East.

There is little question that the British concept provides a broad and effective theory. If the mechanics and the human equations can be brought together into an orderly working scheme there would seem [Page 10]to be good reasons for formal participation by the United States in the broader approach to the affairs of the Near East countries.

According to the British file attached to this memorandum,13 the mechanics of the M. E. S. C. are well thought out and well executed. The concrete results of the Centre substantiate this statement.

The matter of personnel is the one big problem of the undertaking. To have American participation mean anything in a positive sense, this Government must send out to the Centre a representative of the very highest type. He should be a man well known publicly and in whom the public has confidence, and a man who has some knowledge of Near Eastern affairs. The man must not only have strength by himself but must be clothed with sufficient rank and authority to meet on equal terms such men as the Honorable Richard G. Casey, Minister of State, Sir Oliver Lyttelton, Minister of Supplies, other ranking diplomats, and the heads and officers of all the countries of the area. The situation very clearly calls for the rank of ambassador. A man who would fit these qualifications is Ambassador Bullitt.14 In addition to this top flight type representative there should be an equally able deputy who could take over during any absence of his chief. Also there should be an able accountant and sufficient staff for keeping adequate records.

So far this memorandum has been principally concerned with the “requirements” side of civilian supplies. A few words on the shipping and distribution side may eliminate some earlier misconceptions.

The M. E. S. C. does not contemplate a supply depot or a potential supply depot, at or near its headquarters. Nor does it contemplate a general practice of shipping materials to the M. E. S. C. for distribution to final destination points. The M. E. S. C. would be consignee only on bulk cargoes, which are listed as cereals, fertilizers, lubricants and wheat. Even here the ships are directed at time of sailing to either Persian Gulf ports or Red Sea ports.

With the Mediterranean closed for all practical purposes, waterborne freight must reach the Near East by either the Persian Gulf or [Page 11]the Red Sea. The topography of the region divides it for the distribution of supplies into two distinct parts, one comprising Iran, Iraq and Arabia, and the other the balance of the Near Eastern states.

If the United States authorities agree with the theory advanced herein that Iran is complementary to the Russian theater of war rather than to the Middle East theater of war and therefore should be set apart for special United States control, then Iraq is the only country in this particular group for M. E. S. C. handling, since Arabia has not yet been brought within that grouping. In other words, Persian Gulf sailing orders would be tantamount to country destinations.

In the other group, there are so many British Mandates that Red Sea sailing orders, so far as American interests are concerned, are likewise tantamount to country destinations, excepting for possible confusion between Turkey and Egypt.

Thus upon analysis the question of consigning bulk cargoes to the M. E. S. C. does not seem of such serious consequence.

In considering the wisdom of full participation with the British, it might be of comparative value to note the shortcomings of the more limited direct arrangements between this Government and the governments of the several countries of the Near East territory. Against the advantages of this approach set forth earlier in this memorandum, certain disadvantages are apparent when it is compared with the broader areal approach. The disadvantages are:

(i)
Inability in practice to fill the reasonable requests of any given country because the United States had not participated in formulating the general program.
(ii)
Inadequacy of integration with the British machinery in case of adverse war developments in the Near East theater.

The disadvantages are simply the inherent weaknesses that are incidental to a limited course of action in a potentially limitless field of endeavor.

In contradistinction, full participation in the affairs of the M. E. S. C. would allow for the following:

(i)
Complete integration with the existing British machinery in the Near East.
(ii)
The optimum correlation between Near East controls and the combined controls in Washington and London.
(iii)
Complete information on country and area requirements, and participation in preparing and fulfilling programs for the countries and the area.
(iv)
Strong political influence over the affairs of the Near East as a sphere, in addition to the influence now exerted on the individual countries.

Behind these known advantages are the unknown factors of war. It would seem the course of wisdom to prepare the ground for any eventuality. It may be that the Near East will become a focal point [Page 12]in the present world conflict, and that United States forces will play an increasingly prominent part in the probable campaigns of the future. Gaining joint authority in the area for the current administration of civilian supplies would pave the way for similar authority in the general affairs of the area in the future.

Frederick Winant
  1. For correspondence regarding supplies for Iran, see pp. 120 ff.
  2. Omission indicated in the original memorandum.
  3. For correspondence on this subject, see pp. 343 ff.
  4. Division of Exports and Defense Aid.
  5. For a description of the negotiations between President Roosevelt and British Prime Minister Churchill which in March 1942 resulted in agreement for the division of the world into areas of strategic responsibility between the United States and Great Britain, see Maurice Matloff and Edwin M. Snell, Strategic Planning for Coalition Warfare, 1941–1942, in the series United States Army in World War II: The War Department (Washington, Government Printing Office, 1953), pp. 165 ff. The allocation of the Near and Middle East and the Indian Ocean area as an area of British responsibility was in accord with “United States-British Staff Conversations: Report” (short title, ABC–1) of March 27, 1941, the joint strategic plan drawn up by American and British military staff planners at meetings held in Washington during January–March 1941. ABC–1 Report is reproduced in Pearl Harbor Attack: Hearings before the Joint Committee on the Investigation of the Pearl Harbor Attack, 79th Cong., 1st sess., on S. Cong. Res. 27 (Washington, Government Printing Office, 1946), pt 15, p. 1485.
  6. Not attached to file copy.
  7. William C. Bullitt, former Ambassador to the Soviet Union and to France. During November 1941–February 1942 he was President Roosevelt’s personal representative on a mission to the Near East. The latter commission was undertaken initially and primarily to investigate and report on the matter of British “supply and similar problems” in the area in light of the growing importance of military operations in that theater of war, particularly Libya, although it was expanded subsequently to include “a general survey of the areas concerned”. Ambassador Bullitt was in the Near East from December 13, 1941, to January 23, 1942, and by direction of President Roosevelt his reporting and recommendations were made personally to the President. Originally the presidential plan called for Ambassador Bullitt to proceed from the Near and Middle East to India, Burma, the Straits Settlements, and the Dutch East Indies, returning to the United States by way of the Pacific, although he was given discretion to return immediately by the Atlantic if he considered this advisable after his study of the Near Eastern situation; he did in fact return via the Atlantic, presumably because of the war situation prevailing in the Pacific theater.