861.24/1192a: Telegram
The Secretary of State to the Chargé in the Soviet Union (Henderson)
400. From Stettinius for Faymonville. You are informed that it has been necessary to review all steel programs, including protocol production, because of the shortage of steel here. At the present time we have 450,000 tons of steel available while the shipping rate over all routes has never been more than 80,000 tons monthly. It is anticipated that in December this rate will be slightly lower. In view of these large stocks which have been analyzed as to each protocol item, we have considered reducing or stopping production and in certain instances diverting from stocks of those protocol items which are extremely large. On various occasions we have enunciated our policy that we can not permit wastage of materials in production when there are adequate supplies for many months ahead. Belyaev has been informed by us that we intend to reduce or stop production. We have also told them that diversion of approximately 250,000 tons of existing stocks will be made but that we prefer to act on his recommendations as to each protocol item based upon his shipping priority list. Belyaev tells us that Moscow protests strongly either stopping production or diverting from present stocks and fears that we are attempting to evade protocol commitments. Will you kindly indicate [Page 749] to the appropriate Soviet authorities that nothing of the kind is contemplated but that the steel situation here is tight and that our action is accompanied by the promise to maintain sufficient stocks at all times to meet anticipated shipping programs. We will continue alloy steel production at the present rates in view of the fact that all alloy steels are shipped. Our plans concern only carbon steels and particularly rails of which there are on hand 53,000 tons and oil pipe and tubing of which there are on hand 111,000 tons with only very minor shipments planned. You are advised that it only takes from 4 to 6 weeks to put back into production all of the steel items concerned. [Stettinius.]