651R.5331/a: Telegram

The Secretary of State to the Consul General at Algiers (Wiley)

205. For Murphy. The following are the views of the Department and other interested agencies concerning trade between the Peninsula and French North Africa. Preliminary views on this matter were discussed in Department’s no. 1482 of December 24 to Madrid, repeated by Madrid to Lisbon and Algiers. Views set forth below take into consideration Madrid’s no. 14 of January 2, 8 p.m., and Lisbon’s no. 51 of January 11, 3 p.m. Department has also noted certain telegraphic exchanges between Madrid and Algiers relative to Malaise14 and Pettit.

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In view of limited facilities available at French North African ports for civilian trade and of necessity of coordinating all French North African trade through one center, final decisions as to the volume and character of trade with the Peninsula should be made in Algiers. It is therefore suggested that final negotiations be conducted in Algiers on a tripartite basis between NAEB,15 the Spaniards and the French. Similar negotiations could be carried on in Algiers with the Portuguese.
To lighten as much as possible this additional burden to be cast on Algiers, preliminary discussions should be held in Madrid and Lisbon. In Madrid these discussions should be between representatives of the US and British Embassies, the Spanish Government and French authorities approved by the French High Commission in Algiers. If the French High Commission has approved representatives in Lisbon, similar procedure could be followed there. Otherwise, preliminary discussions in Lisbon should be between Anglo-American representatives and the Portuguese Government.
Instructions will be sent promptly to the Anglo-American representatives in Madrid and Lisbon (and repeated to Algiers) as to the character and volume of possible trade objectives to be sought. These will be based on studies being made here with representatives of the British Embassy and will take into consideration our supply-purchase agreements with Spain and Portugal as well as the most recent advices as to trade under existing agreements between Spain and Portugal and French North Africa.
One of the governing factors to be borne in mind in the course of the various negotiations is the fact that the US and British Governments have in effect assured Spain and Portugal that the occupation of French North Africa will not interfere with ordinary commercial agreements in products for their own consumption. In view of these assurances, it would appear that (a) it is desirable to discuss further trade as much as possible within the framework or along the lines of the existing agreements; (b) our control over French North African products cannot be employed for the time being to the full in bargaining with Spain and Portugal, as existing limitations on port facilities will make it impossible for Spain and Portugal to obtain the full amount of phosphates and other products provided for under existing agreements.
The suggestion in Department’s 1482 of December 24 that US and UK might purchase exportable surpluses of North African produce does not appear practical. However, interested agencies here are agreed that for reasons of military necessity absolute control of disposition of North African produce must remain in Anglo-American [Page 11] hands. Consequently, it is suggested that one of the following alternatives be adopted:
Have all purchases of French North African products as well as all imports into North Africa of materials purchased in the Peninsula made by such persons or agencies as from time to time may be designated by the NAEB, and under the supervision of the NAEB. This alternative differs from that set forth in (d) below in that this one is based on the theory that the NAEB would give its approval in advance of each specific transaction or group of transactions. Under alternative (d) there would be no attempt to designate in advance purchasers or importers.
Have all commerce between the Peninsula and French North Africa handled by USCC and UKCC. This would require building up of large staffs by those organizations and would take considerable time. Moreover, it might lead to friction with the Spanish and Portuguese Governments if all their transactions must be handled through US or British commercial companies.
Have only purchases in French North Africa for export to the Peninsula handled as suggested in (a) or (b), leaving exports from the Peninsula to French North Africa to be carried on as provided in (d) below.
Allow private commercial interests to conduct the entire trade both from and to French North Africa, but maintain very close supervision through navicerts and export license system. Although this course would be much the simpler, it is the least desirable, because it would permit Spanish and Portuguese interests to enter the French North African markets freely and possibly disrupt those markets, and also weaken control over distribution of supplies in North Africa.
In the event either the Spaniards or Portuguese should object to dealing through USCC or UKCC, it could be pointed out that there is today no private commercial trading between French North Africa and the US or the UK, and that for military reasons, it is necessary that the trade be centered in Anglo-American Governmental agencies.
Whatever system is agreed upon for implementing the agreed trade exchanges, it will still be necessary to maintain some procedure to limit trade to agreed commodities and amounts. The following is suggested:
All shipments from the Peninsula to French North Africa continue to be subject to navicert;
Shipments from French North Africa to the Peninsula be controlled by some form of export licensing system and port control;
Before issuance in any case, all applications for navicerts or licenses be passed upon and recommended or rejected by NAEB;
To secure consignee, consignor and blockade control generally, all navicerts and export licenses be referred for quota control to Blockade Control, London.
In view of the acknowledged US interest in North Africa, all matters of policy incident to trade between North Africa and the Peninsula, [Page 12] including types of necessary controls to be set up in practice, must be cleared through Washington. Once the controls are set up, it is felt that the routine administration should be through the Blockade Control in London, as above suggested.
Please telegraph your full comments on foregoing and then repeat this telegram and your comments to Madrid and Lisbon.

Repeated to London from here.

  1. Colonel Malaise, General Giraud’s representative in Spain.
  2. North African Economic Board.