816.24/690: Airgram
The Ambassador in El Salvador (Thurston) to the Secretary of State
[Received September 9—9 a.m.]
A–344. Reference Department’s circular telegram of August 31, 1943 and this Embassy’s telegraphic reply of September 2,18 regarding simplification of export control procedure.
As stated, Salvadoran Committee of Economic Coordination strongly favors Alternative I but reluctantly agrees to Alternative III rather than request special treatment differing from that which may be decided upon for other countries.
In conference with Mr. Renwick, President of the Committee, the following points were raised:
- 1.
- The Committee feels that its present system for determining and scheduling the needs of the country and maintaining equitable distribution of imports is reasonably efficient and effective and is reluctant to relinquish this control, particularly in view of experience with flour, wheat and one or two other commodities on which control was previously partially relinquished and shipments were scheduled in the United States. The Committee feels that its present controls are working smoothly and that possible new purely local controls will result in duplication of work and another period of reorganization.
- 2.
- While tonnage of materials in free supply is considerable, from 65 to 75 per cent of Import Recommendations cover controlled materials and consequently elimination of Import Recommendations for materials in free supply will not greatly reduce their volume.
- 3.
- Distinction between free and controlled materials will greatly increase work because of continual and necessary consultations with merchants to determine whether recommendations will be necessary or not. To aid merchants, WPB19 Products Assignment List will have to be completely translated into Spanish.
- 4.
- At present the importer’s copy of Import Recommendation is used locally as import permit. Alternative III will make this system impracticable and, if import permit system is continued, this will necessitate the adoption of a dual procedure in this and in many other phases of the work. If an import permit system is abandoned for materials [Page 218] under free supply a tremendous problem will result in educating customs officials to distinguish between materials in free supply and those under control. It has proved almost impossible to educate local importers and merchants to make accurate determinations with regard to the complications of CMP20 classification but in the last analysis the Committee has been able to pass on all such determinations. Under Plan III the Committee feels that some means of continuing its function in determining classification will be essential as it does not believe that this can be left to the judgment of merchants and customs officials.
- 5.
- The Committee believes that the successful operation of Alternative III revolves around the determination of materials in free supply and that no material on which there is even a remote possibility of scarcity before the end of the war should ever be regarded as in free supply. At present estimates of supply are allocated locally by the Committee on the basis of previous consumption, stocks on hand and pending orders. If some materials now in free supply are later placed under estimate of supply, and if in the meantime orders have been shipped without the Committee’s control, completely new surveys will be required to effect equitable distribution of the new estimate. It is difficult to believe that the war can be prosecuted and won without the appearance of new material shortages. Abandonment of controls for even a short period in such cases will result in repeated emergency work.
- 6.
- Experience has shown that many materials supposedly in free supply have been almost impossible to obtain except in small quantities or in irregular shipments which tend to upset the local economy. Wheat, lumber, plywood, asphalt, cement, and superphosphate fertilizer are some cases in point in El Salvador’s experience. The Committee believes that all such materials should be kept under estimate of supply until true freedom of supply and ample shipping facilities are certain to exist in practice.
- 7.
- General price control in El Salvador has become an urgent necessity because of profiteering and speculation. A decree instituting such control has been drawn up and is to be promulgated shortly. This system entails the use of information compiled currently from basic data contained in Import Recommendations and the abandonment of part of these Recommendations will seriously prejudice efficient administration of price control.
Import Recommendations have been very valuable to this Embassy in preparing requirements reports when materials formerly under free supply have been placed under control. Under Alternative III the accumulation of these data will cease.
Some of the Committee’s comments were anticipated in this Embassy’s telegram No. 213 [185] of August 28, 1943, and it is believed that all of the above points are worthy of serious consideration. Although this Embassy believes that Alternative I is, in the long run the most advisable, if Alternative III is adopted the Department can depend, as in the past, on the wholehearted cooperation of the Committee of Economic Coordination.