File No. 658.119/382
The Secretary of State to the Chargé in Great Britain ( Laughlin)
7947. For Sheldon [from War Trade Board]:
No. 564. Swedish negotiations. Your No. 627, Embassy 10171, May 22, 6 p.m., and your No. 621, Embassy 10191, May 22, 8 p.m. These cables are answered by our No. 555.1 We reaffirm the authority thereby given you to adhere to agreement provided tonnage is definitely assured us and if you feel that there is no chance of insisting successfully upon increase of tonnage or upon the other points mentioned in our No. 505,2 particularly in regard to increased exports to Germany. While our authority heretofore given you stipulated that Associated Governments must obtain as a minimum 400,000 tons of shipping, we are prepared and you are authorized if necessary in the judgment of yourself and associated negotiators to consent to reduction to 388,000 tons as your No. 621 intimates may be necessary. We strongly oppose, however, this further reduction of 12,000 tons, not so much on account of the amount of tonnage involved as because it seems to involve acceptance of the principle that requisitioned tonnage must be off-set against tonnage which otherwise would be chartered. We are cabling you separately in regard to our views relative to tonnage details specified in your No. 621.
Concerning purchase of Swedish iron ore mentioned in your No. 607, Embassy 10121, May 17, 7 p.m.,1 we are carefully considering the manner in which this Government can best carry out the informal understanding that it will share one-third of the burden of such purchase. There are legal objections which may make it impracticable for the United States to make a loan to the Allies to cover one [Page 1239] third of the cost, since such a loan would have to be coupled with an understanding to share one-third of the ultimate loss, and it would be difficult legally to bind the Government to bear such a loss at some indefinite future date. It is likely therefore that we may be compelled to purchase outright one-third of the ore. Please cable us as promptly as possible the best available estimate as to the amount of money which would be involved in our purchasing one-third of the ore to be contracted for and dates of payment.