Allocation & Champagne

A champagne luncheon in the Pan American Room of Washington's Mayflower Hotel one day last week toasted the news that allocations had won out over priorities for the hemisphere as well as for the U.S. The party was thrown by the Ambassador to the U.S. of the first allocatee-to-be: Venezuela. His guest list included State's Dean Acheson, Economic Defense Board's Assistant Director Colonel Royal B. Lord, and two big visiting Venezuelan buyers of supplies (Central Bank President J. M. Herrera Mendoza and Caracas Chamber of Commerce Vice President Andres Boulton).

Their toasts and speeches were exceptionally friendly because EDB's Milo Perkins had finally won his fight to bring the Latin Republics into the U.S.'s own program of scarcity manipulation, instead of insulting them with paper priorities that turned out to be no good.

To make hemisphere allocations work required specific itemization of strategic hemisphere needs alongside of the domestic needs & supply study on which Donald Nelson has been working for weeks. While Don Nelson's inventory study was still in the study stage, Colonel Lord's "globular survey" last week appeared to be coming out of the woods. This week EDB will present to OPM Venezuela's itemized 1942 needs for strategic materials and machinery. No non-strategic items were included, and the list was pared to the bone by Senores Mendoza and Boulton, rechecked by Colonel Lord's office. The agreed-upon total (10% less than Venezuela's actual purchases of similar U. S. materials in 1940): $39,543,700 worth of goods, ranging from $30,000 in steel doors for the vaults of the new Central Bank of Venezuela to:

> $4,000,000 in farm machinery.

> $3,000,000 in truck and bus parts.

> $2,973,500 in chemicals and medicines.

> $2,266,000 in electrical equipment.

> $1,700,000 in textiles, cotton, etc.

EDB does not expect OPM to O.K. all of Venezuela's needs without a battle. First big fight ahead will concern whether EDB can get a blanket approval, or will have to haggle over every item. If Colonel Lord wins that battle it will be a precedent for deals with the other 19 republics. His strongest arguments: 1) these are minimum needs, for which the Latin American countries are willing and eager to pay; 2) if they are not granted, in too many cases the war-straitened economies of these nations may collapse; 3) hemisphere solidarity is worth a few thousand tons of strategic goods, even if it takes U.S. belt-tightening to maintain it.

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