File No. 763.72/7106
The British Ambassador ( Spring Rice ) to the Counselor for the Department of State ( Polk )
My Dear Mr. Counsellor: I think it will be convenient at this moment that I should summarise the state of our negotiations with various neutral countries as to tonnage, since I am afraid that the information which we have supplied you in the past was partly given verbally, and that we have never given you a compendious statement to which you can easily refer. In what follows I have ignored the complicated questions of the Spanish and Japanese tonnage. The Spanish tonnage situation remains in the same condition as when Mr. Balfour wrote to the Secretary of State on the subject of the Cortina agreement.1 The question of Japanese tonnage is one to be treated separately.
1. Norway. The substance of the arrangement proposed by the British Government was that British vessels should be substituted for Norwegian vessels in the Anglo-Norwegian trade and that the Norwegian vessels should be taken over to run in Allied trades; that we should give the Norwegian vessels thus taken over a generous rate, while the British ships substituted for them should be run at cost, thus reducing the price of coal to Norway probably from about £12 to about £7 a ton; that Great Britain should guarantee to produce and license for export Norway’s full requirements of coal and coke; and that in return for these concessions on the part of the British Government all Norwegian ships not already trading to an Allied country or engaged in carriage of essential goods to Norway should be transferred to Allied service.
The Norwegian Government informed the British Minister at Christiania at the end of April that they assented in principle to these proposals. On July 6th the Foreign Office cabled to me that the agreement was now practically completed and that the British Government were proceeding with the execution of various provisions of it.
2. Denmark. Within the last month an agreement has been definitely concluded of which the following are the main points:
Export to Denmark from the United Kingdom in Danish vessels of 100,000 tons of coal a month so long as 200,000 tons dead weight of Danish shipping are chartered to the British Government for trade in European waters. Rates of hire and war risk are provided for, and the British Government state their willingness to provide British crews for Danish vessels time-chartered to them.
Danish vessels of 500 tons dead weight and over, other than those engaged in trade between Denmark, Iceland and the Faroe Islands, and those chartered as above, will engage in trades of interest to the Allies, including the carriage of cargoes for the Commission for Relief in Belgium. Charters of such vessels to be approved by the International [Page 917] Chartering Executive, and no Danish vessel to be laid up or withdrawn from trade except with the concurrence of the British Government.
Danish vessels proceeding to South Atlantic, West Indian and Gulf ports or to the East via the Panama Canal should perform intermediate service; e. g., by loading outward cargoes at United States ports. For this purpose space is to be chartered through the International Chartering Executive. Examination at Halifax or other British ports to be expedited in the case of Danish ships whose cargoes have already been approved.
Special provision is made for Danish sailing vessels continuing to trade between America and Denmark. If proceeding to the South Atlantic they are to perform intermediate service in the same way as the steamships mentioned above. These provisions for intermediate service are intended to provide cargo space from the United States to South America. A monthly statement is to be furnished of the position and trading of all Danish vessels of over 500 tons dead weight, including sailing vessels.
The Foreign Office cabled me on July 6th that this arrangement has been accepted by the Danish shipowners and is in force.
3. Sweden. You already have a copy of a telegram which I handed to you on August 1st as to proposals made by the British Government to the Swedish shipowners.1 So far as I know, no reply of any kind has yet been received to these proposals, and I need not therefore deal with them further here. One definite agreement has, however, been made with one Swedish line; namely, the Swedish Transatlantic Steamship Co. A memorandum dated July 26th, regarding this agreement was sent to Mr. Auchincloss on July 28th.1
4. Holland. The Dutch Government have communicated to the British Government a statement intended to justify the present position of Dutch tonnage. We do not regard this statement as at all satisfactory, but the Foreign Office and the Ministry of Shipping are still examining it and I have not yet received their detailed views. No agreement as yet exists in regard to Dutch shipping, but a modus vivendi was provisionally arrived at about two months ago providing for the performance by Dutch ships proceeding to the South Atlantic or to the Far East via the Panama Canal of intermediate service by the carriage of coal from the United States to the Canal or other coaling stations. You will remember that I informed you of this arrangement at the time, and that we have more than once invited your views as to the cargoes which Dutch ships should be required to carry for the benefit of the United States, both on their voyage from Holland and in the way of intermediate service.2 I gather from recent telegrams from the Foreign Office that the Dutch Government have never fully carried out this modus vivendi.
To sum up the situation, you will see that the problem of Norwegian and Danish tonnage may now be regarded as solved. Both these agreements provide for the employment of neutral shipping for the benefit of the countries associated in the war against Germany, [Page 918] and it only remains for those countries to agree as to the best method of employing the tonnage thus already at their disposal. That matter I need not touch as the Government of the United States is already fully informed as to our desire to discuss the needs of the United States and the Allies and to provide for their satisfaction, and I think it is clearly understood that in all provisions of these agreements, referring specifically to the British Government the latter acts not on its own behalf but as the agent of its associates. The Swedish and Dutch tonnage problems still remain for settlement, but the British Government, again acting not merely on its own behalf, but as agent for its associates, has made proposals, expressed opinions and assumed an attitude which we are sure our associates will take into account.
I hope this explains the position adequately, but if you wish any further information I need hardly say that I shall be only too glad to furnish it.
In general it may be of interest to explain that the two main concessions by which the British Government have obtained the Norwegian and Danish agreements and are seeking to obtain agreements with Holland and Sweden, are the export of British coal to those countries and the granting of permission to their ships to call at ports such as Halifax and Kingston outside the danger zone. To these concessions has been added, in the case of Norway, the very important concession that Norwegian ships are relieved of the most dangerous North Sea trade by British ships.
Believe me [etc.]