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

740.00112A EW/10–3044: Telegram

The Counselor of Embassy in the United Kingdom (Gallman) to the Secretary of State

London, October 30, 1944—7 p.m.
[Received October 31—7:15 a.m.]

9377. For WT.

1. Black List Committee October 19 considered memorandum recommending (a) no further additions to Black List although current Black List to be kept in force and (b) abolition of sanctions attached to Black List after cessation of organized resistance in Germany (see item 5 agenda this date transmitted Embassy’s despatch 18908⁹³). Committee reached no decision on latter question. Memorandum was occasioned by greatly diminished usefulness of Black List as result of advance of war in Europe, also feeling of MEW and Board of Trade that it will be impossible to administer Black List for any appreciable period after the end of organized resistance in Germany and, finally, memorandum was occasioned by continued contraction of MEW in accordance with Lord Selborne’s⁹⁴ announced policy of terminating MEW as soon as possible after cessation of hostilities in Europe.

2. Following are three chief purposes of Black List and explanations of their diminished utility:

(a) Inclusion of directors of Statutory Listed firms in Black List was intended originally to identify them for benefit of censorship and other British authorities and as precautionary measure to prevent their cloaking. Practise has revealed that specified firms in almost all cases have gone farther afield in employing cloaks. Consequently current practice of automatic Black Listing directors and partners of specified firms no longer justified.

(b) Cloaks have been included in Black rather than Statutory List in view of publicity involved in latter course and relative ease with which new cloaks could be found. However fear of published listing is now a considerably greater deterrent to would-be cloaks and it is consequently more difficult for specified persons and firms to find suitable cloaks. It is therefore considered that cloaks who would normally be recommended for the Black List should now generally be interviewed and given alternative of signing standard undertaking or being included in published lists. This procedure would do away with further additions of cloaks to Black List.

(c) Under special listing policy exporters of indigenous products [to] enemy territory in Iberian Peninsula have generally been Black Listed (reference item 5 Black List agenda March 5, 1943) to avoid adverse political effects in Spain and Portugal where frequently economy of these countries or at least whole industries were dependent upon such exports and there was no alternative market. Black Listing was intended primarily to prevent such exporters from obtaining Allied facilities. Progress of war has changed this situation and any exporters of indigenous products who continue now to ship to enemy territory by devious means should be statutory listed.

3. On basis of foregoing Committee agreed subject to any observations which Proclaimed List Committee may make that no further additions to Black List should be made. Regardless of this decision Committee agreed in the interests of labor and expense involved in issuing War Trade lists that after October 31 there should be no further consolidations of the War Trade lists and accordingly a cumulative revision as of that date is shortly to be issued. Committee also agreed it was no longer necessary to publish summaries of Statutory List cases. In view of this decision and that regarding future additions to the Black List there is no need for further supplements to the War Trade lists. Holders of the cumulative revision will be informed of deletions from the existing Black List as and when they take place and will be advised of deletions from the Statutory List by means of amendments to that list as heretofore. Presumably if it is ultimately decided to continue additions to Black List of a limited scale holders of war trade lists could be notified of such additions in the same way that they are notified of Black List deletions.

4. In a circular letter dated October 26 MEW informed British Missions of Black List Committee’s decision but did not state as is case that Committee’s decision regarding future additions to the Black List are subject to Washington’s comments. MEW has explained that this unusual action was taken because Secretary of the Committee who has handled all policy memoranda and communications on such matters to British Missions for Black List section as well as publications of War Trade lists is leaving the country on October 31 and it was desirable to clear up this matter before his departure. MEW stated that if Department forwarded reasons for continuing additions to confidential Black Lists and it becomes necessary for Black List Committee to revise its decision these instructions will be amended accordingly.

5. EWB [EWD?] is not advising American Missions in London coordination area of Committee’s decision pending receipt of Department’s comments on this decision and instructions regarding future commendations for the Confidential List. In order to avoid confusion on the part of American Missions caused by receipt of MEW’s instructions by their British colleagues Embassy would appreciate Department’s early instructions.

Gallman

93. Not printed.
94. Minister of Economic Warfare.