future orders will not be executed unless accompanied by letter of credit calling for payment against railway bill of lading or warehouse receipt New York. As Egyptian exchange regulations do not permit banks to issue letters of credit payable on this basis commercial shipments from the United States to Egypt threatened with complete stoppage. If American vessels with space for commercial cargo were available this difficulty would disappear. Would appreciate information on existing shipping situation as importers here greatly perturbed. Inform Commerce. KIRK 883.24/12 Memorandum of Conversation, by the Assistant Secretary of State (Long) [WASHINGTON,] May 2, 1941. The Egyptian Minister 45 called today ostensibly to present Mr. Anis Azer, the new Counselor. The Counselor then spoke of the general situation existing in Egypt. They had no army because under the policy and practice since the Egyptian occupation they had not developed an army of any considerable strength and they had no equipment. Consequently the army was not of much value and they could not be of much military assistance to the British. However, he said that all the assets and resources of the country, including public, private industrial and financial organizations, were devoted to the service of the British and all were engaged practically exclusively in that service even to the exclusion of some of the needs of Egypt. But the Minister and Counselor were having difficulties in getting permits to export certain materials which were essential for Egypt, not only for its own use, but for the continuing aid it was rendering to Britain. And they hoped that the American Government under its policy to help Britain should be able to take into consideration the fact that Egypt was helping the British and needed certain articles which they would import from America in order to further that aid. They said they were to discuss this situation with the British authorities in Washington. I told them that those questions were economic as well as policy questions and suggested that they see the appropriate officers of the Government, including Dr. Feis. I said that we would always be glad to hear what they had to say and to consider any proposals that they might make. B[RECKINRIDGE] L[ONG] 45 Mahmoud Hassan Bey. 811.20 Defense (M)/1935: Telegram The Minister in Egypt (Kirk) to the Secretary of State CAIRO, May 8, 1941-5 p. m. [Received May 9-1:55 p. m.] 434. Following for Feis: In continuation of my 379, May 1, 5 p. m., please see my telegram 390, May 2, 5 p. m. It seems that in view of this exchange difficulty it is highly important that a system be adopted whereby some regularity may be observed in the sailings of American vessels to Red Sea ports thus enabling American exporters readily to accept letters of credit payable against ocean bill of lading, since Egyptian Government firmly refuses permission to local banks to open letters of credit in New York payable on any other basis due to its fear of a possible flight of capital should this restriction regarding letters of credit be relaxed. KIRK 811.20 Defense (M)/1976: Telegram The Minister in Egypt (Kirk) to the Secretary of State CAIRO, May 12, 1941-10 a. m. [Received May 14-4:30 a. m.] 463. Personal for Feis. Continuing my 434, May 8, 5 p. m. I happen to know that the Egyptian railways are in urgent need of trucks and engines and that this shortage of rolling stock and locomotives is regarded as particularly serious in view of the expected increase in shipping including American to the Red Sea ports. I have been told in high Egyptian as well as British circles that tenders from American firms for the sale to the railways here of railroad equipment might be welcome and I pass this on to you in order to see if anything can be done along this line. I am also wondering if any such deals could be facilitated under some provision of the Lease and Lend Bill.46 Incidentally I firmly believe that any such contemplated deals by American manufacturers should be accompanied or preferably preceded by a proposal to the Egyptian Government to send here American transportation experts to suggest improvements in the transportation system here and that the quicker this can be done the better. Of course this all may be an excess of zeal on my part but I do hope that you will agree that it is worth trying out. I must add that in all such matters I can only emphasize the fact that anything that we can do to further trade between the United States and Egypt now will serve the dual purpose of opening up for the future important markets for American goods in this area which has hitherto dealt 46 Approval March 11, 1941; 55 Stat. 31. largely with Central Europe and, what is of more immediate concern, will give concrete encouragement to this country which is looking more and more to the United States to save it from the Nazis. KIRK 740.00111A Combat Areas/430: Telegram The Secretary of State to the Minister in Egypt (Kirk) WASHINGTON, May 15, 1941-11 a. m. 148. Your 244, April 12, 11 a. m. and subsequent telegrams. It has been decided to allot a substantial amount of shipping tonnage for service in the future between the United States and the Red Sea. The determination of what outbound cargo is to be carried in this space is to be under the control of the British Purchasing Commission in this country. It is to be expected that priority will be given to shipments needed for British military effort in the Near East but that space may also be available for shipments to Egypt of commodities not directly related to British military effort. If the Egyptian Government wishes to try to obtain allocation of part of this space, the Department suggests that the most promising procedure would be to have its Legation in Washington discuss with the British Purchasing Commission the commodities it desires from this country and the relative priorities which it attaches to the commodities in its lists. The Egyptian Commercial Counselor has already been in touch with the Department regarding commodities which the Egyptian Government desires to obtain and has promised to furnish a list of such commodities in as much detail as possible. However no such list has yet been received. He states that the Egyptian Legation has arranged for many of these purchases to be handled on behalf of the Egyptian Government by the British Purchasing Commission. With respect to return cargo, some space should certainly be available for transporting products from Egypt to the United States although the demands on this space have not been fully analyzed and there will be a desire for prompt turn around of the ships. Of the commodities which you mention, the Metals Reserve Company (a Government agency) would definitely be interested in buying all available tungsten and is prepared to make an offer on manganese as soon as it knows that shipping will be available. If ordinary commercial arrangements can be made for the sale of other commodities, such as phosphate, gypsum, calcium sulphate, it is possible that some arrangement could be made for shipping space for them although with a lower priority rating than for other commodities of greater strategic importance to this country. For Kirk only: Considering the many difficulties surrounding the whole matter of providing shipping facilities for cargo moving from the United States to the Red Sea it would appear that the chances of successful execution of Egyptian desires would be much increased if the Egyptian representation in this country had the steady assistance of the British Purchasing Commission. HULL 740.00111A Combat Areas/456: Telegram The Minister in Egypt (Kirk) to the Secretary of State CAIRO, May 23, 1941-3 p. m. [Received May 25-8:30 a. m.] 571. Department's telegram 148, May 15, 11 a. m. I brought to the personal attention of the Prime Minister and Minister of Foreign Affairs 46 the appropriate portion of the instruction under reference and I am now in receipt of the following list of commodities to which the Egyptian Government wishes to be accorded priority in the allocation of shipping to and from the United States and Egypt (list 1— priority list of imports; list 2-priority list of exports): [Here follows list 1; this list, with amounts added, is contained in telegram No. 744, June 17, noon, page 309.] List 2: (1) Onions; (2) Cotton seed oils; (3) Rice; (4) Beans, lentils and garlic; (5) Natural phosphates of lime; (6) Manganese; (7) Epsom. Note: With regard to cotton the Government of the United States of America will be notified of its grading later. The Prime Minister states that the Egyptian Legation in Washington has been furnished with the foregoing list and asks that the Government of the United States "give the utmost help for securing the necessary shipping space". He adds that as regards the question of the purchase of all quantities of manganese instructions have been given to the competent Egyptian officials to examine the question and notify me of the conditions and specifications. KIRK 883.24/12a: Telegram The Secretary of State to the Minister in Egypt (Kirk) WASHINGTON, May 26, 1941-7 p. m. 174. Department's 148, May 15, 11 a. m., and your 463, May 12, 10 a. m., and previous. The Department has been looking into the many questions which present themselves in connection with the 16a Sirry Pasha, Prime Minister, acting also as Minister for Foreign Affairs at this time. desired purpose of exchanging supplies with Egypt. Existing war conditions and the defense controls in this country present many problems for which definite solutions must be found before the exchange can be arranged. The primary ones are as follows: (1) Since the ordinary channels of commercial representation are no longer active or available, the arrangements for the actual placing of orders, supervision of their production and arrangement for their shipment requires close contact and discussion here with American producers and different branches of the American Government concerned. (2) For commodities subject to export licenses the issuance of the necessary licenses must be arranged. (3) For commodities the production of which is determined under a priorities system, arrangements must be made for the securing of priority permits. (4) The provision of shipping space must be worked out in consultation with the governmental authorities which now so largely control that space. (5) Methods of payment must be determined (including possible relation to the lease-lend legislation). These problems are so many-sided and have so many technical elements in them that it seems plain to the Department that if the Egyptian Government is serious in its wish it would (a) have to despatch to this country a mission possessing full and detailed knowledge of what Egypt wishes to buy, and full technical knowledge; (b) have to convey the necessary authority to someone here to place orders, accept the goods, help to arrange the shipments, and make the pay ments. The work of such Egyptian representatives could be enormously facilitated if it were carried on with the help of the British Purchasing Commission in this country, and this Commission now has vast experience in such arrangements and a very large staff equipped to handle it. For that reason the whole matter has been discussed by the Department with the British Purchasing Commission which expresses itself as entirely agreeable to render all possible assistance to the Egyptian representatives if it is so instructed from London. The advantages of such an arrangement are numerous. The Purchasing Commission has now wide technical knowledge of manufactured products; they know where orders for such commodities can be placed; they are experienced in procedures necessary for obtaining priorities for export licenses; they are familiar with details of getting commodities shipped from interior points and loaded on shipboard. In addition, as indicated in the Department's 148, they have a very large voice in determining what outbound cargo is to be transported in the shipping tonnage available between the United States and the Red Sea. |
