817.24/761
The Secretary of State to the Ambassador in Nicaragua (Stewart)
The Secretary of State refers to the Embassy’s despatch no. 1157 of June 11, 194323 concerning the operation of the Controlled Materials Plan24 under Decentralization Plan A.
The Department appreciates the difficulties experienced by the Embassy in attempting to integrate the operations of the Controlled Materials Plan and Decentralization Plan A. The War Production Board when it devised the Controlled Materials Plan was concerned primarily with problems arising from military production and the system is ill-adapted to exports. Steps to remedy this situation are progressing slowly.
Under the Controlled Materials Plan barely sufficient time elapses between the final allotment of materials to claimant agencies and freezing of production schedules or actual production to permit the scheduling and production of domestic orders. It would clearly be impossible to go through the decentralized export control procedure both in the field and in Washington during the interval between the granting of an allotment by the War Production Board and the time when the materials or articles must be scheduled for production or produced.
Therefore it has been necessary for the Board of Economic Warfare to furnish estimates of supply and request Import Recommendations considerably in advance of the receipt of the allotment of Controlled Materials from the War Production Board. It will be obvious that the actual allotment of controlled materials may be greater or less than the sum total of estimates of supplies for all countries. The deadline dates for submission of approved Import Recommendations to the Board of Economic Warfare are determined with the purpose of allowing a reasonable time thereafter during [Page 265] which exporters may take the procedural steps required of them. These steps may in fact take more or less time than calculated.
In other words, there can be no exact mathematical determination in advance that the material covered in an Import Recommendation approved in the Embassy on a certain date will be produced and exported on another fixed date in the future. There are too many variable factors to permit any such correlation, some of these factors being as follows: (a) the allotment may be greater or less than the estimate of supply, as stated previously; (b) the exporter may delay in securing a supplier; (c) the supplier may delay in applying for an export license and supply assistance; (d) the supplier may have a backlog of orders which will delay production; (e) available shipping may be unsuitable for the particular type of commodity or material.
The one factor that is certain is that export orders for controlled materials in certain shapes and forms and for certain critical components where production facilities in the United States are taxed to capacity will not be produced unless the entire export procedure is completed and the orders are specifically scheduled for production by the War Production Board considerably in advance of the time of production.
It would be impossible to communicate to the field the specific procedures and supply situations for each product. In general, however, the time lag between approval of Import Recommendations and production will be greatest (a) in the case of A products where the controlled materials used in the manufacture of the A products must generally be produced in the quarter preceding the commencement of production of the A product and where the lead time is great and (b) in the cases of certain types of B products built to unusual specifications where the manufacturing facilities are taxed to capacity and where the lead time is great.
The lag between the date of the Import Recommendation and production will be least in the case of certain more or less standard B products where orders may be filled from existing stocks.
In answer to the specific questions raised in the despatch under reference, the Department informs the Embassy as follows:
- 1.
- The Embassy was correct in approving Import Recommendations for iron and steel products included under estimates of supply of Class B products and in charging these Recommendations against the estimates of supply of Class B products.
- 2.
- The Department has transmitted to the Embassy with instruction no. 695 of June 21, 194325 a list correlating as far as possible Schedule B26 classifications and CMP numbers. This list should [Page 266] result in the simplification of the procedure followed by the Embassy as outlined in the despatch under reference.
- 3.
- On May 24, the War Production Board removed wire nails from the list of Class B products. CMP 715.0 now reads “nails and tools, not steel wire nails”.
- 4.
- The CMP products in the 800’s were inadvertently omitted from the list of “Products Assignments” by the War Production Board, and were replaced in change notice 2 of May 7, 1943, a copy of which is transmitted herewith.27