800.24/10–1744
The Secretary of State to
Diplomatic and Consular Officers
Washington, October 17,
1944.
Sirs: I enclose herewith for your information a
copy of a memorandum transmitted by the Department to the Surplus War
Property Administration indicating the Department’s policy for disposal
abroad of surplus property.
The sale to foreign buyers of surplus property will involve many problems
closely related to the foreign policy of the United States. Therefore, a
close working relationship will be necessary both in Washington and the
field between the Department and those responsible for disposal of surpluses
abroad. The Department has informed the Administration in Washington that it
is prepared to render assistance in the field through its diplomatic
missions and consular offices. This assistance will, in general, include
advice concerning the overall problem of disposal of surplus property in
each country and its relation to our commercial policy, and information
concerning the potential market for surplus property in each country. The
foreign disposal agency, where necessary, will send to the field such
technical and
[Page 91]
other personnel as may
be required to carry on those of its functions which cannot be performed by
regular or auxiliary Foreign Services.
The functions now assigned to the Surplus Property Board, which was created
by a recent act of the Congress,3 have until now been performed
by the Surplus War Property Administration, created by an executive order of
the President.4 The Surplus War
Property Administration had designated the Foreign Economic Administration
as its foreign disposal agency, and it is indicated that the Foreign
Economic Administration, or one of its subsidiaries, will continue as the
foreign disposal agency under the Board.
From time to time, the Foreign Economic Administration has transmitted to its
representatives in the field information concerning its procedures for
surplus disposal, and at present is sending a preliminary guide for property
disposal dated September 22, 1944. These regulations are tentative, and
should be referred to the Chief of the Mission, in order that the practices
to be followed in each country may be in conformity with the foreign policy
of the United States towards that country, and the procedures and practices
developed by the mission in its relations with the foreign country.
The procedure for the disposal of surplus aircraft abroad has been worked
out, and in Washington will differ generally from the procedure used in
disposing of other types of surplus property. Lieutenant Colonel William B.
Harding, Director of the Aviation Division, Surplus War Property
Administration, is in charge of aircraft disposal. He is advised concerning
both policy and procedure by the inter-departmental Working Committee of the
Surplus War Property Administration, in which the Department of State has a
representative.
The Foreign Economic Administration is transmitting to all of its Special
Representatives an instruction containing general regulations and procedures
for the disposal of surplus aircraft in the field. You may wish to consult
with the Special Representative of the Foreign Economic Administration about
this particular matter.
Very truly yours,
For the Secretary of State:
Dean Acheson
[Enclosure]
Proposed Policies for Disposal Abroad of Surplus
Property
In view of the important foreign policy aspects of the disposal abroad of
surplus property, the State Department believes the following policies
or guiding principles should apply to the disposal abroad of (a) surplus property located outside the United
States; and (b)
[Page 92]
surplus property located within the United States
and which is disposed of to foreign buyers, except in such cases as the
provisions of the Surplus Property Disposal Act may provide otherwise.
These principles are intended to constitute a basis for the preparation
of regulations and procedures.
1. In order that all sales of surplus property abroad shall conform to
the foreign policy of this Government, the foreign disposal agency
should maintain close working arrangements with the Department of State
and United States diplomatic missions and consular offices abroad and,
to the extent possible, use the facilities and personnel of such
missions and offices.
2. Although not a prerequisite to sales of surplus property abroad,
wherever possible agreements should be negotiated by the Department of
State or diplomatic missions with all foreign governments having
jurisdiction over areas in which surplus property is to be disposed of,
to provide that the United States Government shall not be liable for any
claims arising directly or indirectly out of the sale of such property,
and to arrange for such procedures and policies as may be appropriate to
obtain effective and orderly disposal of the property.
3. In the disposal of surplus property to foreign buyers private channels
of trade should be utilized unless there are compelling reasons to the
contrary.
4. The foreign disposal agency should impose no restrictions upon the
disposal abroad of specialized machinery and equipment, nor of technical
information. The Executive Committee on Economic Foreign Policy
representing the several U.S. Government departments and agencies
concerned, at its meeting September 1, 1944, said “the policy
recommended is that no restrictions be imposed on the export of
technical information except those based on military security and
interference with the war effort …”.
In response to a request from the Administrator of the Surplus War
Property Administration6 with regard to policy as to disposal abroad of
surplus industrial equipment, machine tools, and machinery, the above
Committee replied under date of September 4, 1944 that
“it should particularly like to call to your
attention a quotation from an earlier memorandum of the
Executive Committee which was submitted by the Secretary of
State to and approved by the President.7
“‘It is the policy of the Government of the United States to
engage in a properly conceived program of foreign investment
to aid in financing the reconstruction of war-torn areas and
for related purposes, including facilitating the export
generally of capital goods from the United States and the
economic development and industrialization of the less
developed areas of the world.’
“It is the view of the Executive Committee that the sale of
surplus industrial equipment abroad falls within the scope of
this policy.”
[Page 93]
5. Although the basic principle in the disposal of surplus property
abroad is ordinarily to obtain the highest net return, in Whatever area
this may best be realized, considerations of foreign economic or
political policy may in special cases make departure from this principle
advisable.
6. In the disposal of surplus property abroad, with the exception of
transport aircraft, the foreign disposal agency should give preference
to purchase in the following order in cases of approximately equal
prices and terms: (1) to United States Government agencies; (2) to UNRRA
or other agencies, government or private, intending to use the property
for relief and rehabilitation; (3) to United States manufacturers, or
their authorized representatives, of goods carrying such manufacturers’
names or trademarks.
7. Ordinarily, disposal should be for dollar funds payable in the United
States at or prior to the release of the property. When it is
impracticable to consummate sales on this basis, other terms may be
authorized by the Board after consultation with other appropriate United
States Government agencies.
8. No sales should be made of surplus communications equipment abroad
unless they have been cleared through the Department of State.
No sales or transfers are to be made of arms, ammunition and implements
of war as defined by the President’s proclamation of April 9, 1942,8 or
of other military weapons, or of components thereof, until such sales or
transfers have in each individual case been approved by the Department
of State and by other interested agencies.
9. No sales should be made to persons on the “Proclaimed List of Certain
Blocked Nationals”,9 or to agents of such
persons.
