Foreign Relations of the United States: Diplomatic Papers, 1944, General: Economic and Social Matters, Volume II

740.00112A E W 1939/36384½

The British Parliamentary Secretary for the Ministry of Economic Warfare (Foot) to the Acting Chief of the Division of World Trade Intelligence (Russell)

R. 220

London, 6 January, 1944.

Dear Mr. Russell: This is to confirm the points made at our meeting yesterday. As regards the proposed statement,⁹ we accept your contention that it is not necessary to include the phrase “in any theatre of war” and that the sentence “such adjustments will be carried out with due regard to specific circumstances” should remain. On the other hand the words “continued” and “economy” should be omitted from the last sentence. For convenience of reference, I enclose a draft of the amended statement and will be grateful if you will confirm that this is what you had in mind.

As regards other matters which we discussed, I must make it clear that I have not had an opportunity of consulting the other interested departments and can therefore only express a tentative view. Subject however, to this reservation, the opinions I expressed were as follows:—

1. If the United States Government decides that it is desirable to publish the statement in the near future, we on our side will be quite prepared to arrange simultaneous publication in London.

2. The whispering campaign was initiated for the sole purpose of strengthening the immediate effectiveness of the War Trade Lists in Europe. No decision has been taken by H.M. Government as to whether the Lists should in fact be continued after the European armistice. In our opinion, however, it will probably not be possible to abolish them immediately and there are strong arguments for retaining them, at any rate for a period of several months. In all neutral countries there are traders and firms who, on account of their pro-Allied sympathies, have refused to have dealings with the Axis and have sustained considerable loss in consequence. It would be unjust and might give rise to bitterness if these persons find themselves immediately in no better position than their competitors who have elected to assist the enemy.

3. We should, however, avoid giving the impression in any public statement we may make, that we intend to reward our friends. By so doing, we should let ourselves in for a large number of claims which we would be quite unable to satisfy. There are many thousands of persons in every neutral country who have rendered service to the Allied cause. These services however, have taken many forms and it would be impossible to draw up a “White List” of those deserving of special favour. For this reason the only practical way of assisting our friends is to continue, for a time, to penalize our enemies.

4. We agree that different considerations obtain in Latin-America. In particular, the fact that many Latin-American governments have themselves taken steps against persons on the Statutory and Proclaimed Lists, would make it inappropriate to continue the Lists in the countries concerned. We are inclined to think however, that the case of Argentina¹⁰ may possibly need further consideration. As long as the war lasts in Europe the Lists are a weapon of economic warfare. After the armistice they can only be a method of retribution. If they are maintained for a time, for this purpose, it is difficult to see how a valid distinction can be drawn between, say, a firm in Spain which has chosen to assist the enemy and a firm in Argentina which has done the same thing. Indeed, it is arguable that the Argentine firm is the worse offender since it is unlikely that it will have been so dependent upon trade with Axis Europe.

As I told you yesterday, we may find it desirable, in order to strengthen the whispering campaign, to give rather more publicity in Europe to the Statutory List. I understood from you that you would have no objection to our reiterating the statement which I made in my Parliamentary answer on 9th November¹¹ that “firms and traders in European neutral countries should not too hastily assume that, when the Armistice is signed, we will at once forget those who have elected to assist our enemies”. If it becomes desirable to be more explicit (e.g. if we are faced with Parliamentary questions on this subject) I understand that you would see no objection to our using the statement which we have drafted.

Yours sincerely,

Dingle Foot

[Enclosure]

Draft of Amended Statement on Post-War Listing

“It is not possible at the present time to predict precisely when it may prove to be possible and expedient to withdraw the published lists. The United States and the United Kingdom do not consider the Proclaimed and Statutory Lists as appropriate parts of the type of normal peacetime trade policies which they hope eventually will be established. It is recognized, however, that there will inevitably be a transition period from war to peacetime conditions. In view of the total character of the present conflict and its vast impact upon commerce it will necessarily take time to effect adjustments of economic warfare controls following the cessation of hostilities. Such adjustments will be carried out with due regard to specific circumstances. The problem of eliminating economic warfare controls and in particular the Proclaimed and Statutory Lists is believed in general to be capable of prompt solution in regions far removed from the scene of conflict. The elimination of such controls may be expected to be slower with respect to areas adjacent to the scene of conflict and particularly with respect to nationals of, or residents in, neutral countries who have engaged actively in equipping or servicing the military machine of the enemy—which the Allied Governments are determined to destroy—or who have rendered other important aid to the enemy.”

9. See telegram 7842, December 11, 1943, to London, Foreign Relations, 1943, vol. v, p. 344.
10. For documentation on efforts of the United States to enlist British cooperation in a common policy toward Argentina, see vol. vii, pp. 288 ff.
11. Parliamentary Debates, House of Commons, 5th series, vol. 393, col. 1115.