File No. 763.72112/2672

The Minister in the Netherlands (Van Dyke) to the Secretary of State

No. 493

Sir: In compliance with the Department’s telegraphic instruction 317, of May 26,1 and referring to my provisional reply of May 30, despatch No. 484,1 I have the honor to report as follows in regard to restraints upon commerce between the United States and the Netherlands, more particularly in connection with the British reply of April 24, 1916, concerning the blockade. (Information Series M. No. 90.)

A. Wheat Supply

The greater part of the wheat importation of the Netherlands comes from the United States of America. The net imports of wheat (and wheat flour equivalent) just previous to the war were as follows:

metric tons

1912 1913
616,917 671,594

being a yearly average of 644,255, or about 54,000 tons per month.

The net import during 1915 was 603,587 tons. This appeared to be sufficient for the needs of the country until towards the end of the year, but a serious shortage began to become evident, partly brought about by the British regulations limiting the amount of grain which could be shipped to Holland (even when consigned to the Dutch Government) within certain periods. This prevented the obvious and natural remedy of accumulating large stocks whenever it might be possible in order to provide for periods when the lack of ship room or other reasons might prevent importation.

This alarming situation influenced the Dutch Minister of Agriculture to prohibit the baking of bread from white flour. This was done on April 24, 1916.

[Page 400]

At a recent session of Parliament the Minister of Agriculture was requested to explain the shortage of wheat and wheat flour. The Minister’s response sets forth that the stocks of wheat in the country on September 1, 1915, had run down to about 120,000 tons (about 9 weeks supply) and that some of that was showing signs of being damaged, and that the Commission for Relief in Belgium was earnestly asking for 26,000 tons of that stock.

He said the principal troubles were:

I.
There had been great difficulty in securing freight room; and even after securing it, the freight did not arrive promptly, because of the roundabout journeys enforced on the ships by war conditions.
II.
The detention of ships on the British coast.
III.
The destruction of ships by mines.
IV.
Ships on their way from Chile to Holland with cargoes of saltpeter had been chartered to carry grain after the discharge of their saltpeter. These ships were greatly delayed on their route hither by the closing of the Panama Canal and by the “well-known indefinite detention of the Chile ships in the Channel.”

The Minister of Agriculture gave the following data on the chartering and arrival of wheat ships for seven months:

metric tons freight

Engaged Arrived
August 1915 39,000
September 40,000 35,790
October 20,000 23,012
November 55,000 47,306
December 65,000 34,734
January 1916 53,000 61,465
February 50,000 45,376
March 36,040
Total 7 months 322,000 283,723

The detention in the Channel by British authorities of ships carrying saltpeter has been of great detriment to the Netherlands. This article is imported for use as a fertilizer, and is consigned to the Dutch Government. Almost without exception these ships are detained for long periods. The latest example is the S. S. Andyk which arrived in the British Channel May 12 and was not permitted to reach Holland until June 4.

B. Imports of Fodder Grains in January, February, March, and April

metric tons

1913 1914 1915 1916
185,187 287,804 415,768 133,831

These fodder grains—rye, barley, corn and oats—should be considered together, because one of them may be substituted for others, according to availability and price.

[Page 401]

The above figures show that in the first four months of 1913, 1914 (before the war) the average net import of fodder grains was 236,490. The importation in the corresponding period of 1916 was 102,659 less than the average, a shortage of 43 per cent. But it must be noted that in the first four months of 1915 the importation of fodder grains was 179,278 tons above the average, an increase of 76 per cent. This very large addition to the normal imports must have been either stored as reserve or exported to Germany. The appetite of Dutch cows could hardly have increased to that extent in that year.

C. Detention and Non-delivery of Goods Shipped Under Netherlands Oversea Trust Permits

Formerly all vessels proceeding from America to Holland were detained by the British for examination. The delay incident to this examination was so great (sometimes more than two weeks) that an arrangement was made in July 1915 between the British Government and the Netherlands Oversea Trust under which it was agreed that vessels proceeding to Holland under the Netherlands Oversea Trust license would be permitted to pass the British Channel and discharge in Dutch ports under the supervision of the Netherlands Oversea Trust, with the understanding that if requested by the British authorities the Netherlands Oversea Trust bound itself to return contraband articles to the prize court or to withhold the delivery (until further notice) in Holland of non-contraband articles “where information is in the possession of His Majesty’s Government which shows that the contraband articles (in question) were not intended for home consumption in Holland.” (See Exhibit A attached hereto.1)

It was thought that this arrangement would greatly facilitate the delivery of foreign goods in Holland. It did so for several months. But later the British authorities began sending unqualified orders to the Netherlands Oversea Trust to withhold delivery of certain shipments or to send the goods to a British prize court, without specifying that they had any “information” showing or tending to show that the goods in question were not intended for domestic use in Holland.

A striking case of this method of procedure was that of the two shipments of gold from New York consigned to the Netherlands Oversea Trust with British permit: namely, 10 kegs of “gold dollars” for A. Boissevain, arriving in Rotterdam on the S. S. Rotterdam, November 15, 1915, and the 20 kegs of “American gold coin” for the Rotterdamsche Bankvereeniging, arriving in Rotterdam per S. S. Noordam, December 2, 1915.

These shipments of gold were contracted to be bought, on arrival, by the Bank of the Netherlands which is the Government depository. The Dutch Royal embargo on the export of gold from the Netherlands made it absolutely certain that these shipments must be intended solely for the use of this country. Nevertheless the British authorities peremptorily and arbitrarily forbade the delivery of this gold and ordered it returned to the British prize court for adjudication. [Page 402] This order was not accompanied by any statement of “information” justifying the assumption of enemy interest or destination. The status of this case is fully set forth in my despatch No. 397 of December 27, 1915 and my despatch No. 402 of January 6, 1916. The Netherlands Oversea Trust with the approval of the Netherlands Government refused to send the gold back to Great Britain, and it is now lying in the vaults of the Netherlands Bank, in the name of the Trust, but still undelivered and undeliverable to the Dutch owners. This fact is the reason alleged by the Netherlands Oversea Trust for its refusal to accept the shipments of American gold for the purchase of Dutch tobacco, referred to in the Department’s cabled instructions 282, March 20; 295, April 13; and 302, April 19, and my cablegrams 552, April 11, and 559, April 14, and my despatch No. 457 of April 25.1

In regard to other goods, the Trust has complied in many cases with the order to send them back from Holland to the British prize court. In other cases it has refused to send them back, but has them here undelivered. I am assured confidentially by officers of the Trust that no more goods will be sent back, except in strict accordance with the terms of Article 3 of the Amended Contract (Exhibit A1) and actual production of “information” on which the suspicion of enemy use or destination is based. From the same source I learn that the orders to detain goods have been and are being complied with in all cases. Commercial Attaché Thompson informs me that “practically every item now arriving from oversea is ordered detained or sent to prize court.”

Knowing that great quantities of American goods had been held up in Rotterdam and were still lying there undelivered, I requested Mr. Thompson to obtain from the officers of the Trust if possible the latest figures from their official records. They have obligingly complied, and the list of figures, as made up to May 31, is herewith enclosed. (Marked Exhibit B.1)

The notations in the margin indicate that some portions of the goods listed have been delivered since the list was made; but this is certainly balanced by other goods arriving in the meantime and detained. The list therefore represents approximately the quantity of goods now held up in Rotterdam under British orders.

The list does not give their values. Mr. Thompson has made a provisional estimate, and reckons the merchandise at $1,900,000, which added to the $1,500,000 mentioned above makes a total of about $3,400,000, comprised in 432 entries and arriving in 54 cargoes.

You will observe that the first arrival noted on this list came by the S. S. Oosterdyk, September 16, 1915. This shipment has therefore been held up for nearly nine months without delivery or adjudication. The average time of detention of shipments as shown by the list is about 105 days. These detentions are entirely due to the peremptory orders issued by the British authorities to the Netherlands Oversea Trust. I may add from personal observation that the officials of the Trust are seriously chafing against the restraints imposed upon commerce by these orders, and against the arbitrary manner in which they are issued without the submission of “information.”

[Page 403]

D. Goods Needed in Lawful Trade of the Netherlands

The Netherlands Oversea Trust list of detained goods gives an approximate idea of the articles now most needed in this country (in addition to wheat and wheat-flour which must be consigned in all cases to the Government).

The above-mentioned list does not show that there is an appreciable shortage of tobacco, cocoa, or petroleum. But quantities of motor cycles, automobiles, tires, tanning extracts, dried fruits, honey, canned meats, bacon, fatbacks, cornstarch, leather and hides, copper in various forms, typewriters, and machine tools and supplies, imported for Dutch consumption, are held up and refused delivery at Rotterdam. They are therefore presumably needed.

The shortage of oversea goods in Holland may be attributed to the following causes:

I.
The long detention of ships in British waters.
II.
The long withholding of goods after arrival in Dutch ports by the Netherlands Oversea Trust in obedience to British orders.
III.
The scarcity of tonnage space, which is due in part to the above-mentioned detention of ships, and in part to the destruction of ships at sea by floating mines and German torpedoes, and in part to the requisitioning of ships by belligerent nations.
IV.
Some shortage is probably caused by the inability of American traders to fill the orders with which they are overwhelmed.

The Netherlands Government monthly statistics of imports are so abbreviated and inexact that it is difficult to draw accurate conclusions from them in matters of detail. A few inferences, however, may be made with assurance.

(1)
The statistics of wheat, quoted by the Minister of Agriculture and given in paragraph A, show a shortage of 25 per cent within the last seven months. The only way in which this shortage has been affected by British action has been through the detention of ships, which has helped to create the lack of tonnage for wheat shipments from America.
(2)
There is good ground for the common understanding that there is a lack of machinery and of many kinds of raw material coming from America and used by manufacturers in the Netherlands. The current official statistics, however, do not exhibit this in detail.

Commercial Attaché Thompson reports to me on this subject as follows:

Numerous complaints have come to this office about difficulties of obtaining raw material, such as copper wire, rubber, and cotton yarns, by manufacturers who, though possessing detailed information with regard to their difficulties of importation from the United States, are usually unwilling to have their names used openly as complainants, for fear of being put on the British list of persons to whom permits are not to be granted.

One of these complainants was Henri Wynmalen, manufacturer of automobiles and flying machines in Amsterdam. He said that, although he was engaged largely in work for the Dutch Government, it was practically impossible for him to import his needed raw materials from the United States, while it was always easy to obtain import permissions for British goods. He said he had asked assistance of the Dutch Government in the matter of obtaining permits [Page 404] for the importation of needed raw material from the United States to be used for the Dutch Army, and he had been told by officials of the War Department they were not willing to make any complaints in the matter to the British authorities.

Mr. Jo Elias, a cotton manufacturer of Eindhoven told me that he had been trying for months to arrange for the importation of cotton yarns from the United States, but was unable to obtain the permit, whereas he could arrange the permits for the importation from Manchester, England, without any difficulty, whenever yarns were available in Manchester.

Mr. van Aalst, president of the Netherlands Oversea Trust, admitted to me that the Netherlands Oversea Trust would often issue permits for the importation of goods from England, while refusing permits for similar goods from the United States.

I have now on my desk a letter from Mart C. van de Wal, of Amsterdam, dated May 25, 1916, in which he claims that he represents in Holland a number of American exporters of motor cycles, boat motors, typewriters, and so forth, and that large amounts of these goods intended for him have been in Rotterdam for months detained by the Netherlands Oversea Trust. (This is confirmed by the Netherlands Oversea Trust list, Exhibit B.1) He also states that he has several hundred motor cycle tires shipped from the United States, which are now being detained in London without apparent hope of being released. He says that during all this time his competitors, Hugo Smit and J. Witmondt of Amsterdam, and Messrs. Croese & Co., of Bussum, are regularly receiving motor cycles from British concerns, and that these goods are regularly delivered upon arrival in Holland without undue difficulties.

E. Paragraph 18 of the British Reply of April 24, 19162

This paragraph is an answer to paragraph 14 of the American note of November 5, 1915,3 in which protest is made against interference with goods “intended to become incorporated in the mass of merchandise for sale in a neutral country.”

The British practice in this matter at present amounts in effect to the detention and examination of all goods entering the Netherlands from the United States. The importation of fodder grain is restricted on the theory that the animals which eat it may be exported to Germany. Cornstarch from America is restricted for Dutch importation on the ground that equivalent amounts of domestic potato starch may be exported from the Netherlands to Germany. Cotton yarns from America are refused on the ground that the cloth made from them may be sent to Germany.

Entirely apart from the consideration of the argument of belligerent interest which lies behind this line of action, it must be remarked that its propriety is greatly impaired by the fact that Great Britain grants permissions and privileges to her own merchants and traders which she refuses to merchants and traders of the United States. I specify as follows:

(1)
The import of gold from the United States to Holland has been prevented, while the import of gold from Great Britain has been allowed, to a very large extent, during the same period. (See my despatch No. 402,1 of January 6 and my 397,1 of December 27, 1915.
(2)
The import of coffee from the United States has been prevented, through the Netherlands Overseas Trust, while the import of coffee from Great Britain and France has been allowed during the same period. (See my despatch No. 472, May 16, 1916.4)
(3)
The import of motor cycles, machinery, cotton yarns, rubber, and other articles from the United States has been obstructed, while the import of similar goods from Great Britain has been permitted. (See the report of Commercial Attaché Thompson which is herewith enclosed, Exhibit C.1)

In regard to Mr. Thompson’s report I wish to say that it seems to me somewhat colored by an anti-British feeling. I cannot, however, deny that I have received an impression from the general course of commercial affairs that certain persons in Great Britain, although probably not the British Government, are taking advantage of the present situation to promote the interest of British merchants and traders at the expense of merchants and traders of the United States.

Nevertheless I must record again my opinion that the trade of the United States with the Netherlands has in general prospered during the war, through the intermediation of the Netherlands Oversea Trust, which is a corporation of Dutch origin and a charter, but practically, through its contract, under British control.

I have [etc.]

Henry van Dyke
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  8. Ante, p. 373.
  9. Date on which the note of October 21 was delivered at London. See Foreign Relations, 1915, Supplement, p. 582.
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  12. Post, p. 584.
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