purposes. Such certificates will be considered in relation to the lim-
itation orders affecting identical use in the United States.
   2. The Certificate of Necessity will serve in lieu of a PD-lA form
 with regard to an allocated commodity. In this connection, however,
 the Certificate should contain full answers to the questions thereon,
 particularly as regards the end use of the commodity, existing in-
 ventories, and availability of substitutes. It is recognized that the
 Certifying Agencies in some of the other republics are still in process
 of organization and that all are not yet fully equipped to make the
 detailed investigations necessary to determine end use of allocated
 commodities for presentation on the Certificate form. Nevertheless,
 if such agencies, or any other agencies within the foreign govern-
 ments, are to supervise the distribution of commodities after arrival
 they will eventually need to know such details. Thus the Missions
 are urged to encourage the agencies to persist in obtaining and record-
 ing such information, not only to comply with our requirements but
 also for their own future control purposes.
   There are certain vitally important questions regarding allocations
procedure which cannot be answered at this time. The first is
whether the unused portion of a quarterly allocation will carry for-
ward into subsequent quarters of the year. The problem is so in-
volved that the Requirements Committee has not yet been able to work
out a solution. The heavy industries of the United States are work-
ing against a strict forward time-table to satisfy the demands of the
armed forces of the United Nations, and to attempt to telescope the
unused portion of a quarterly allocation into production schedules
for following quarters presents serious technical difficulties.
  The second concerns the determination of what outstanding licenses
shall be charged against first quarter allocations. For example, in
many cases commodities licensed prior to January 1, 1942 are only
now moving forward, while at the same time there are outstanding
thousands of first quarter licenses for commodities that have moved
forward only in part, and some not at all. The administrative prob-
lem of determining the exact status of the commodities that have
been licensed, and checking them against factory production sched-
ules and export shipments, is an extremely complicated one. How-
ever, the whole problem is receiving urgent attention and it is hoped
that solution will soon be arrived at.
  During the transitional period the Department appreciates that the
position of the Missions in this matter will be a difficult one. How-
ever, the Missions should continue to cooperate as fully as possible
with the Certifying Agencies and encourage the careful issuance of
the Certificates, endeavoring to see that there is no cloaking, and that
established trade channels, and in particular American firms, receive
a proportionately fair share of the trade based on past performance.



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