The

2. If action is postponed, and if it is necessary to wait until some comprehensive scheme can come into operation, it will be impossible to begin transport until after midsummer and the importations will not begin to react upon trade until the autumn. For a few months, at all events, it is useless to expect private credits to be forthcoming to a sufficient extent to meet the requirements of these countries. Committee therefore urge most strongly that their respective Governments should now assign a fund which the Committee (which was intended by the Raw Materials Section to be an executive body) may allocate at their discretion for the most urgent needs. The financial machinery for such a credit is, of course, a matter for the Finance Section to determine; but the Committee suggest for consideration that the nitrates to be furnished should be paid for from the proceeds of the coming sugar crop, whilst the proceeds resulting from the manufacture and sale of other supplies, such as textile raw materials, should be segregated to an extent sufficient for the purchase of further stocks of raw material and for no other purpose during the term of credit. If the condition of the exchange renders it impossible to use the actual funds for the purchase of further supplies, the funds should be segregated by the banks which are operating the scheme, and should be held subject to the disposition of the authorised representatives of the Associated Governments.

(a) Nitrate of Soda.

POLAND

This is the most urgent case. The nitrate can be employed during June as a top dressing for sugar beet if delivered at the end of May; it will largely increase the sugar content of the beet and will thus enable Poland to increase her exports and recover financial stability. The Syndicate of Polish Agriculturists can arrange the distribution by existing machinery. It is proposed that the nitrate should be supplied by the Nitrate Executive for joint account of the Governments interested in the Nitrate pool. The supply of 10,000 tons to Poland at once is recommended; cost about 250,000l. f. o. b. United Kingdom. (b) Textile Raw Materials. Cotton, Wool, Jute, and Accessories.

The total amount of the credits required for the cotton, wool, and accessories, is estimated (on the basis of the detailed figures supplied by the British Economic Commission) at 5,000,000l. The quantity of cotton required has been calculated on the number of spindles capable of being put into operation without delay, on the assumption that for the present a single shift will be worked. As regards jute and jute sacks, an unlimited quantity of sandbags can be provided if required, and the low monthly ration of 700 tons per month for war jute is suggested.

(c) Agricultural Implements.

To be specified.

Conclusion.

The Committee recommend that a credit of 62 million pounds should be provided in some way, if possible, to cover for a period of three months these most pressing needs, after which further credits will probably become necessary.

TCHECHO-SLOVAKIA MEMA

Exports.-The Committee understand that Tchecho-Slovakia is, or will shortly be, in a position to export a large amount of sugar; also machinery, timber, glass, hops, and kaolin.

(a) Requirements of the Metallurgical and Metal-working Industry. Copper Copper is urgently needed for various purposes, e. g., replacement of machinery parts which have been removed. The telephone service is stated to be suspended. Copper is also much wanted for electrical machinery. An import of 7,500 tons for three months is recommended, cost 600,0007., at 807. per ton.

Anti-friction metal is specially required for the completion of locomotives. A detailed report on this subject, and on requirements of tin, will be furnished.

Ferro-manganese is much needed for improving the quality of the products of the extensive iron industry (30,000 workers); but it is understood that negotiations with Sweden for the supply of this commodity are now in progress.

(b) Cotton.

The mills are stated to be in good order, and the operatives have not been dismissed. On the basis of the number of spindles a monthly ration of 20,000 bales is recommended. Cost for three months, 1,500,0007.

(c) Wool.

On present information a credit of 1,500,0007. is recommended. Conclusion.

Taking into account the requirements for accessories (e. g., belting) the preliminary total figure of 3,500,0007.

It is recommended that a credit should be provided, if possible, to cover these requirements.

T

Paris Peace Conf. 180.0501/17

Supreme Economic Council:

eventeenth Meeting Held at the Ministry of Commerce [on 12th May, 1919, at 10 a. m.]

The Supreme Economic Council held its Seventeenth Meeting on Monday, 12th May, 1919, at 10 a. m. under the Chairmanship of Lord Robert Cecil.

(a) With reference to Minute 131 (i) it was noted that the Council of Foreign Ministers at their Meeting on 9th May had decided:1

"to authorise the Supreme Economic Council to take all preparatory measures to remove the blockade restrictions on Hungary, without further reference to the Supreme Council as soon as the General Staff informs them that order has been re-established in the country".

It was agreed that the Blockade Section should keep in touch with the Supreme War Council at Versailles with a view to ascertaining when the necessary instructions for the removal of the blockade on Hungary could be given.

(b) With reference to Minute 131 (ii) it was noted that the question of facilitating the export of foodstuffs from the Banat to Austria and Hungary was receiving the attention of the Council of Heads of States and that there was no further action to be taken by the Supreme Economic Council for the time being.

1 See FM-13, minute 6, vol. IV, p. 693.

149. Prohibition and Pre-emption Lists.

(a) The resolution (127)2 suggesting that the Allied and Associated Governments should waive their right of pre-emption, except as regards dyestuffs and coal, under the terms of the telegram of March 24th was again submitted but, owing to the absence of M. Loucheur, it was decided that the matter should be considered at a Special Meeting of the Council to be held on Tuesday, 13th May at 12 noon.

(b) The French Delegates reported that 50 tons of dyestuffs were urgently required for French factories engaged in preparing Military cloth and requested that authority might be given for the supply of this quantity from Germany.

It was agreed that the matter should be considered at the next meeting of the Council, if necessary.

150. Relations With Germany.

(i) With reference to Minute 133 the following decisions reached by the Council of Heads of States were reported: "

8

(a) "that semi-public communications should be at once entered into with the border neutrals with a view to securing from them such undertakings as would, if necessary, enable the Blockade to be re-imposed even more effectively than before;

(b) That a public statement should at once be issued making clear what modifications in the Blockade have already been made and concluding with a statement that all the rest of the Blockade against Germany would be removed the moment Peace was signed;"

it being understood that the removal of the Blockade would not apply to Bolshevist Russia.

The American Delegates stated that they had not understood that a decision had definitely been reached as outlined in Clause (a) above, and pointed out that in their view such action might have a very detrimental effect upon German finance as a whole.

It was agreed:

(a) that the scheme (133) for the instant application, in case of need, of the fullest possible pressure of Blockade upon Germany prepared by the Blockade Section in accordance with Minute 136 of Proceedings of the Council should be submitted immediately to the Council of Heads of States;

(b) that the announcement to be issued setting forth what modifications on the Blockade had already been made should be prepared and published as soon as possible.

(ii) The American Delegates referred to the meeting to be held immediately with the German Financial Authorities with a view to arranging additional means of payment for foodstuffs and enquired

what assurances could be given to the German Delegates with respect to delivery of foodstuffs or return of money and securities in the event of the blockade being reimposed.

It was agreed that the representatives of the Associated Governments should be authorised to undertake that, in the event of it becoming necessary to restore the blockade, the Associated Governments would either deliver food, to the full amount of the money and securities put up by Germany, or would return to Germany that portion of the money and securities representing the amount of food not delivered. In this connection the Director General of Relief pointed out the serious predicament in which the American Relief Administration would find itself in the event that the blockade on Germany were reimposed; that the Germans have not put up money and securities sufficient to cover the commitments of food because they could not be assured that they would be allowed to receive the food; that the shipment of food now beyond possibility of diversion was far in excess of the funds deposited by the Germans.

The British Delegates remarked upon the gravity of the situation and expressed the opinion that proper steps should be taken to the end that all losses should be borne by the various governments as an expense incident to the conduct of the war.

It was agreed :

(a) that all shipments by the Relief Administration landed at, or en route for, European ports and intended for the revictualling of Germany which may be kept from going into Germany by the re-establishment of the blockade, shall be taken off the hands of the American Relief Administration by purchase by the Allied Governments.

(b) that the delegates on the Food and Finance Sections should prepare immediately a scheme for dealing with the above food supplies in the event of Germany refusing to sign the preliminaries of peace. 151. Trade With Occupied German Territories.

With reference to Minute 134 it was reported that owing to nondelivery of the requisite information regarding the reported export of commodities from the occupied to the unoccupied territories the French Delegates had been unable to investigate the matter in detail but they undertook to present a report at the next meeting of the Council.

152. Import of Raw Materials Into Germany.

A Resolution from the Raw Materials Section (134) suggesting that Germany should be permitted to import specified quantities of certain articles urgently required for the coal mining and other essential industries, and which can be supplied from German stocks in neutral countries bought and paid for prior to 7th May was submitted and approved.