Office of the Historian

File No. 865.51/39

The Assistant Secretary of the Treasury ( Crosby) to the Secretary of State

Washington, August 31, 1917.

My Dear Mr. Secretary: On behalf of the Secretary, I beg to send you for the files of your Department the enclosed copy of the purchasing commission agreement of August 27, signed by the Secretary of the Treasury and the Italian Ambassador, for and on behalf of the Italian Government. Similar agreements were signed on August 24 for the British, French and Russian Governments, and on the 25th for the Belgian and Serbian Governments. Except for modifications as to the countries concerned, they are identical in form with the copy herewith enclosed, and unless your Department particularly desires to have separate copies of each agreement, those for the five countries named will not be prepared and forwarded for your files.

Very truly yours,

Oscar T. Crosby
[Page 566]
[Enclosure]

Purchasing Commission Agreement of August 27, 1917, between the Secretary of the Treasury ( McAdoo) and the Italian Ambassador ( Macchi di Cellere)

Memorandum of an arrangement entered into this 27th day of August, 1917, by the Secretary of the Treasury, with the approval of the President of the United States, and Count V. Macchi di Cellere, acting for and on behalf of the Royal Italian Government.

The following arrangement is entered into as one of the arrangements necessary or desirable for establishing such credits in the United States for the Royal Italian Government as may from time to time be determined by the Secretary of the Treasury, with the approval of the President, under the authority of the act of Congress approved April 24, 1917, or any subsequent similar act.

1.
Bernard M. Baruch, Robert S. Lovett and Robert S. Brookings are hereby designated a commission through whom or with whose approval or consent all purchases in the United States of materials and supplies by or on behalf of the Royal Italian Government shall be made.
2.
The Royal Italian Government, from time to time, shall, subject to the provision of article 4 hereof, communicate its requirements for materials and supplies to the commission through such person or persons as shall be from time to time designated to the commission as empowered by the Royal Italian Government to make purchases on its behalf.
3.
It shall be the duty of the commission, subject to the provision of article 4 hereof, to use their best efforts to obtain offers of the materials and supplies so shown to be required, at the best obtainable prices and terms, of delivery and otherwise, and to submit the same to the said person or persons representing the Royal Italian Government, but it shall be no part of the duty of the commission to prepare and sign contracts, or to supervise their execution, or to determine technical details, or to carry out the inspection of materials, all of which matters shall be the concern of the Royal Italian Government. Said Government shall be under no obligation to make purchases of materials and supplies at the prices and upon the terms so submitted by the commission, but it is agreed that it shall not, during the continuance of this arrangement, make purchases in the United States otherwise than through or with the approval or consent of the commission. Such approval of the commission may be given from time to time, according to the circumstances of each case, with reference to purchases of a specified general character, or specifically with reference to stated transactions; and the commission may, according to the circumstances of each case, determine from time to time to give its consent, with reference to purchases [Page 567] of a specified general character or specifically with reference to stated transactions, that the same be made without the intervention of the commission.
4.
Since other foreign governments engaged in war with the enemies of the United States may have entered or may enter into similar arrangements with the Secretary of the Treasury, with the approval of the President of the United States, it is understood that all such foreign governments shall agree among themselves as to their several requirements and as to the priorities of delivery desired to be observed as between them in respect to matters of major importance. Such agreement may be arrived at by an Inter-Allied Council sitting in Europe, or, pending the establishment of such council, by representatives of the Allied Governments acting in the United States. The commission, in making negotiations and arranging for deliveries, shall take into consideration the recommendations of such foreign governments, so arrived at, and it shall be guided, so far as practicable, by such recommendations, as well as by the conditions existing in the United States with reference to the possibilities of production and manufacture and the requirements of the United States.
5.
The Royal Italian Government shall use its best efforts to the end that this arrangement shall extend to and bind the colonies and dependencies of the Royal Italian Government beyond the seas.
6.
The commission shall determine their own organization and rules and methods of procedure, and may employ counsel and clerical assistance, all subject to the approval of the Secretary of the Treasury. The commission shall be under no liability except in good faith to use their best efforts as aforesaid. The expenses of the commission and their compensation, which together shall not exceed $150,000 per annum, shall be borne by the Royal Italian Government. It is understood that in the event of other foreign governments entering into similar arrangements, such expenses and compensations shall be borne by each of them in proportion to the purchases of such foreign government through the commission.
7.
Any or all members of the commission may be removed by the President of the United States, who may, from time to time fill vacancies, and designate an additional member or members of the commission, or reduce the number of members of the commission.
8.
This arrangement shall continue until the expiration of ninety days after written notice shall have been given by the Secretary of the Treasury to the Royal Italian Government, or by the Royal Italian Government to the Secretary of the Treasury, of his or its desire to terminate the same; but in no case shall this arrangement continue beyond the termination of the war between the United States and its enemies.
9.
Any notice hereunder to the Secretary of the Treasury shall be deemed sufficiently given if delivered at the State Department in Washington for transmission to the Secretary of the Treasury. Any notice hereunder to the Royal Italian Government shall be deemed sufficiently given if delivered, addressed to said Royal Italian Government, to its agent designated as herein provided, or at the Embassy of said Government in Washington.
10.
Nothing herein contained, expressed or implied, nor anything done or omitted by the commission, shall impose any obligation or liability upon the United States whether to advance moneys, to establish credits, or otherwise.
__________
Secretary of the Treasury
__________
Ambassador Extraordinary and Plenipotentiary,
for and on behalf of the Royal Italian Government