File No. 659.119/198, 199

The Chargé in Denmark ( Grant-Smith) to the Secretary of State

[Telegram]

1949, 1951. The following is the text of a note received from the Danish Minister for Foreign Affairs:

February 13, 1918.

Monsieur le Chargé d’Affaires: I have the honor to acknowledge receipt of the note dated the 17th of January ultimo which the War Trade Board on behalf of the American Government were good enough to hand to the Danish Minister in Washington, and copy of which accompanied your note verbale of the 21st ultimo.

In reply to said note I have the honor to state the following:

Group 1. In order to further conclusion of the arrangement which we are now negotiating, I have caused the various rights and obligations of the associations settled upon in the notes hitherto exchanged to be copied, marked A, with a schedule attached of a draft agreement between the United States Government on the one side and the Merchants’ Guild and the Danish Chamber of Manufacturers on the other.

I trust that on examination of the schedule the War Trade Board will appreciate that the associations have been mindful of the situation of the United States in these negotiations, and have shown the greatest possible modesty and resignation in their demands. In order also not to protract the negotiations the associations have made but a few alterations, which they hope will be accepted. I also trust that the conciliatory and fair spirit in which the two associations have endeavored in every possible way to meet the new and complicated conditions contained in group 1, subdivision 3, of your last note will meet with the appreciation of the War Trade Board.

I beg to make the following further explanatory remarks to the different paragraphs of the draft agreement:

To article 1: In the schedule the following items call for an explanation: Crude and fuel oil is inserted with 5,000 tons instead of the 50 tons offered, the last figure being evidently due to a mistake in telegraphing; rice is inserted with 3,000 tons instead of 300 tons for the same reason; various woods, such as mahogany, cedar, walnut, red gum, and poplar, are reentered with 6,000 tons, partly because the figure 300 tons is evidently due to a mistake, partly because the exclusion of this import would cause considerable unemployment in the cabinetmaking trade, and finally because these woods cannot be replaced by imports from Sweden and Norway. Cordage is inserted with 500 tons instead of 5,000 tons, as in the American proposal, this figure being evidently a mistake. Hides are added to the list with 4,000 tons, 600 tons more than in Doctor Taylor’s proposal, but 800 tons less than settled through the negotiations concluded with the British Government. Tanning materials (see group 2, subdivision 5) are also added with 6,000 tons, the same as in Doctor Taylor’s proposal of the 23d of October. Grass seeds [Page 1309]are reinserted, it being most earnestly hoped that the question of the export of this item will be taken up again for favorable consideration, as they are indispensable to Denmark.

To article 6: The associations suggest that the American proposal respecting the limitation of Denmark’s export to the Central Powers of manufactured articles (group 1, subdivision 3) be so altered that the limitation is attached to the quantity and not to the value of the exports in 1917.

To article 8: In this article an attempt has been made to solve the question of stipulating in the agreement the right of raising the question of further goods and of rations without negativing the idea of definitiveness (group 1, subdivision 1). This wording, it is hoped, will meet the requirements of the case.

On behalf of the Danish Government I have the honor to add that in all cases in which the cooperation of the licensing authorities (the Ministry of Justice) is required to enable the associations to fulfill the obligations upon which they have entered in the foregoing draft agreement, such cooperation will be given and that no dispensation will be granted by the Ministry of Justice in conflict with the stipulations contained therein.

Group 2. In reply to the introductory remarks of your Government [concerning] this group I beg to state that on the contrary the Danish Government fully appreciate the situation of the United States in these negotiations. This is evident from the fact that the Danish Government have entered upon a discussion with the United States Government respecting the limitation of Denmark’s export southwards, especially of cattle and horses, in spite of the embargo policy as regards fodderstuff adopted by the United States Government and her associates, whereby we are deprived of the most efficient means of fixing such a limitation; for in order to enable Denmark to undertake such obligations she must either have fodderstuffs or be allowed still further to reduce her stocks of cattle and horses. The first [eventuality] being excluded, we have attempted to carry out the reduction which both your Government and the British Government have previously conceded was necessary, and this is the reason why an extra export of cattle and horses was suggested, with none of which Danish agriculture is anxious to part. The “increase” spoken of in the note of your Government is nothing but a highly necessary safety valve. If now also the carrying through of the second alternative is denied us and we are nevertheless obliged to accept the limitations indicated below, I must in fairness to ourselves give due warning that the Danish Government may not be able to undertake the obligations should it be necessary to keep up the limitations of the export of cattle and horses beyond the autumn, when the animals can no longer be on grass. The Danish Government are also for this reason obliged to propose to limit the duration of the period of these obligations to six months from the date of the conclusion of the arrangement.

Also for this reason alone it will be evident that the Danish Government are unable to accept the conditions contained in the War Trade Board’s note of the 28th ultimo to M. Brun, communicated to me by your note verbale of the 30th of January, 1918, No. 182. It would simply [negate] the whole of our exertions if we were to [Page 1310]agree that the conditions in their letter of the 17th of January respecting Denmark’s exports to the Central Powers should be held to apply as of and from the date of the said letter, should an agreement be arrived at.

I beg to suggest that there should be a possibility of arriving at a satisfactory solution of the butter and bacon question by the fixing of limits, as such must naturally be the primary object of the United States and her associates, and this was also the object of the percentage systems hitherto applied.

In accepting the idea of a limitation we are, on the other hand, ready to go as far as reasonable political precaution, exports to Sweden and Norway, and the existing economic conditions will allow. I have therefore again had a special calculation made for this purpose and am glad to be able to reduce the figures originally given, as will be seen from our proposals indicated below.

The very important concessions now made by the Danish Government are, however, dependent on the willingness of the United States Government to consent to and to facilitate the immediate export from Chile of saltpetre. This is the only way in which there are hopes of getting a harvest sufficiently big to continue beyond the stipulated six months. The Danish Government have already centered their efforts on also obtaining saltpetre from Norway; but, firstly, the Norwegian calcium nitrate has not quite the same fertilizing value as saltpetre, and, secondly, it cannot be had in the quantities required. Hence the enhanced importance of saltpetre import from Chile. The Danish Government would further beg to point out that the United States Government, by adding new conditions to be fulfilled on the part of Denmark in their last note, make the task of the Danish Government, genuinely willing to arrive at an agreement, still more difficult. In the last note an embargo towards the Central Powers is demanded for a series of new articles such as lard, cheese, milk, tallow, fats, fish oil, whale oil, and any other oils and fats except bacon and butter. The Danish Government will, however, agree to make her export prohibitions effective in the sense desired for all the articles except cheese, milk, and eggs and the small quantities of waste fats and waste tallow for which valuable compensations, such as X-ray machines and other indispensable hospital outfits, are received from Germany. The excepted articles are, however, included in the limited exports (subdivision 1).

The Danish Government will, as hitherto, furnish the American Legation in Copenhagen with the monthly statistics published respecting Denmark’s exports.

The Danish Government are thus prepared to make the following further concessions under this group.

(1) The Danish Government will guarantee that the exports to the Central Powers of bacon and butter (including milk calculated at its butter value), eggs, cheese, waste fats, and waste tallow, after our own domestic needs and our exports to Sweden and Norway have been deducted, shall for a period of six months on an average not exceed 700 tons a week, instead of 800 tons originally suggested by us. I sincerely trust that this very valuable concession will be appreciated by the American Government. The Danish Government will do her utmost to allot the amounts on monthly exports [Page 1311]of about equal sizes but must reserve such freedom in this respect as the economic conditions, both of production and sale, require for at least a period of two months. The remainder of our exportable surplus of bacon, butter, and eggs will, as hitherto, be exported to Great Britain, provided this country be willing to pay the same prices as obtained in other markets.

(2) I have repeatedly had occasion to call attention to the great hardship inflicted on the Danish fishermen by the agreement concluded with the British Government respecting the export of fish. I shall therefore only refer to my previous notes on the subject and add that the Danish Government have been obliged to give very substantial financial aid to the fishermen. The condition now stipulated really deals a most serious blow to this trade, in which the work is the hardest and the profit the smallest.

To make a distinction between those who fish for Danish and Scandinavian account and those who fish for German account is extremely difficult, as all Danish fishermen fish with the same boats and same materials all kinds of fish. I venture to suggest, if the conditions fixed by your Government cannot be altered, that a certain amount of petroleum be set aside sufficient to fish for Danish home consumption about 40,000 tons of fish and such smaller export as can be maintained to Sweden and Norway. This amount of petroleum can be fixed at 8,000 tons, and thereby the object of the American Government will be attained.

The Danish Government feel that they should nevertheless limit the export of fish to Germany to 25,000 tons a year, but the American Government will undoubtedly understand that thereby the utmost concession is reached, when Germany must supply the petroleum, so that any deficit in one and more months shall be made good in the following months.

Denmark agrees to maintain the regulations now in force according to which Danish fishermen and Danish fishing boats must land their catch in Denmark and not transfer their catch at sea, and consequently must not deliver to Norway, Sweden, and the Central Powers the export of fish agreed upon to the Central Powers to occur via Denmark.

Denmark will agree not to transfer to a belligerent flag any fishing vessel.

(3) Denmark will for a period of six months limit the export of cattle to the Central Powers to an average of 6,000 head per week, the limitation also to extend to the products of every kind of this number of cattle.

(4) Denmark will for a period of six months limit her export of horses to the Central Powers, to 15,000.

The Danish Government will do their utmost to divide the export of cattle and horses equally [over] the six months, but must reserve for themselves such freedom in this respect as the economic and market conditions require.

(5) Denmark agrees not to export her exportable surplus of hides to the Central Powers and will expect in return to receive tanning materials and heavy hides.

Group 3. I have also caused a draft agreement to be made respecting the tonnage question and beg to inclose herewith two copies [Page 1312]of same, marked “B.” This agreement is framed in the name of the Shipowners’ Association, which embraces owners of steam and motorships but does not embrace owners of sailing ships, who are also not sufficiently organized for such purpose.

The Danish Government learn with satisfaction that the American Government appreciate the fairness of the principle that Denmark shall only cede such portion of the Danish tonnage to the United States Government as is not necessary for Danish requirements, and they acquiesce in this amount being fixed at 400,000 tons deadweight. Steam and motor tonnage is ceded to the United States Government on the condition that the goods mentioned in agreement “A” are supplied to us and that the facilities stipulated in the draft agreement “B” for the free use of the Danish tonnage at our disposal in the way of coals, stores, inspection, etc., are granted so as to make it effective for the limited supplies promised us.

As regards the employment of the tonnage to be ceded to the United States, the Danish Government feel compelled to maintain the standpoint explained at length in their note of the 24th of December, 1917,1 and must therefore refuse to allow the ships to be used in the danger zone. They are all the more obliged to maintain this standpoint as Danish shipowners feel that they have already in action proven their willingness to shoulder their part of the world’s burden by contributing nearly 25 per cent—the 200,000 tons ceded to England—of the total Danish steam and motor tonnage for use in dangerous areas.

Respecting the supply of bunkers, etc., I have instructed the Danish Minister in Washington to call attention to the fact that the new bunker-coal arrangement should be modified so as to suit the conditions of the agreement, as in the opinion of the Danish Government they would invalidate same in most essential respects. I beg to refer to the note handed by M. Brun on this subject to the American Government.2

By entering upon the conditions set forth in the draft agreement Danish shipping shall have finally settled all obligation towards the United States and her associates.

The Danish Government acceded to the request of your Government and have acquiesced in only keeping 400,000 tons for the transportation of Danish supplies, thus 50,000 less than we deemed necessary. Your Government’s new request that we should also cede the 53,000 tons of sailing ships would thus still further curtail the tonnage at our disposal. For this reason we regret that the Danish Government cannot meet your wishes in this respect and therefore hope that Danish sailing vessels shall be allowed free trade on behalf of Denmark and be secured the necessary supplies.

With reference to the final condition of your Government for the conclusion of an agreement—subdivision 9—that Denmark shall agree in principle to provide through the extension of credit for the settlement of trade balances adverse to the United States and her associates, I beg to state that I do not very well see how [Page 1313]such a situation can possibly occur in the trade exchange between the United States and Denmark. The trade balances have for years constantly been in Denmark’s disfavor, and should the present agreement be concluded, the prospects of a change would seem still less. The granting of a credit of the kind mentioned, however, not being within the province of the Danish Government, I am precluded from giving any promise in this respect and can only refer the matter for discussion with Danish financial institutions, should an unfavorable trade balance be likely to manifest itself.

In conclusion I beg to state that so far and so long as the goods mentioned in the draft agreement A (group 1) are supplied by the United States and, in the case of their impossibility of granting certain kinds of goods, others available are granted in their place, the Danish Government will undertake the obligations contained in group 2 and acquiesce in the conclusion on the part of the shipping associations of the draft agreement B (group 3). The Danish Government and the Danish associations have worked in conjunction in order to form an acceptable counterproposal on the part of Denmark, and they trust that it will be acceptable to the American Government and thus lead to a speedy conclusion of an arrangement desired both by your and by my Government.

I avail myself [etc.]

Erik Scavenius

A. Draft Agreement between the United States Government and the Merchants’ Guild of Copenhagen and the Danish Chamber of Manufacturers

  • Article 1. The Merchants’ Guild of Copenhagen or the Danish Chamber of Manufacturers, as the case may be, will furnish the United States Government with a guarantee similar to that which they have undertaken to issue to the British Government in accordance with the Anglo-Danish trade agreement of November 19, 1915, whenever they are satisfied that any goods to be imported into Denmark—and which come within the scope of article 10 of this agreement—are intended for bona fide Danish requirements in accordance with the conditions upon which the present agreement has been concluded.
  • Art. 2. The aforesaid associations do hereby guarantee that no articles imported under this agreement or from the countries associated with the United States in the war shall be reexported directly or indirectly to the Central Powers, the only exceptions from this condition to be the export comprised by article 6 of this agreement and for use in dairies and pig slaughteries.
  • Art. 3. It is further guaranteed by the associations that lubricating oils, kerosene, and gasoline received from the United States shall not be employed in factories or in manufacturing plants of any kind (except in dairies and pig slaughteries) operating to produce commodities of any kind for export to Germany.
  • Art. 4. It is further a consequence of article 2 that no commodity which the United States or its associates may furnish to Denmark shall be used in the production of any commodity to be exported to the Central Powers with the exceptions provided for by articles 2 and 6 of the present agreement.
  • Art. 5. In case of export to any neutral country contiguous to the Central Powers or either of them, of any commodity—imported under the agreement—which by the present agreement has been precluded from export to the Central Powers, no such commodity so exported shall be reexported directly or indirectly to the Central Powers, and the associations undertake to take such steps as will effectively [prevent] any such exports to the Central Powers [from taking] place.
  • Art. 6. The associations undertake to limit the export to the Central Powers of articles manufactured in Denmark to the quantities of the corresponding export during 1917, which undertaking refers to the export of all such manufactured articles, including those manufactured from materials not embraced by this agreement (with the exception of prepared fish, meat, and dairy products, which are treated separately), as well as those the export of which to the Central Powers is allowed under the Anglo-Danish trade agreement of November 19, 1915.
  • Art. 7. The United States Government undertake to grant export licenses for the commodities contained in the schedule attached hereto, and to the extent of the quantity fixed for each item of the schedule, except when the future harvest and other future conditions of production or transportation, which cannot now be foreseen should make it impossible to grant such licenses to the full extent. In such cases the United States Government and its associates will not interfere with the supply from other sources of the quantity which they can not deliver themselves.
  • Art. 8. It is understood that the attached schedule [comprises] only the commodities for which the United States Government has been able and has wished to fix quantities. The noninclusion in the schedule of other commodities needed by Denmark, such as soda ash, caustic soda, drugs, sundry chemicals, bristles, casings, hair, hardware, tools, machinery (including agricultural machinery and implements), iron plates, iron sheets, iron rods, angles, etc., tin plates, black and terne plates, sanitary goods, etc., does not mean that the United States Government will not issue licenses for export, nor that the United States of America will not be able to supply these goods, but applications for the licensing thereof will be favorably considered by the United States Government, and—so far as it can possibly be done—to the extent of the Danish requirements.
  • Art. 9. With respect to all commodities, facilities will be given to the United States Government to effect an equal division of rations over the year, however, with due consideration to seasonal needs and tonnage opportunities.
  • Art. 10. This agreement covers all goods which originate in America or pass through American jurisdiction or are carried in vessels using American fuel.
  • The United States Government will render its best assistance and advice to the associations in order that Denmark may obtain these supplies, so that from time to time the best possible sources may be decided upon. The United States Government and its associates will use their best efforts to effect that these commodities will be obtained in full by Denmark.
  • Art. 11. This agreement is operative for six months from the date of its conclusion without cancellation privileges, provided the war has not meanwhile come to an end. The conclusion of peace will also be the termination of this agreement.

Schedule of Goods for Which the United States Government Undertake to Issue Export Licenses in Accordance with Article 7 of the American-Danish Trade Agreement

(Metric tons are used unless otherwise stated)

[Class of goods] [Quantity]
Sulphur 270
Asbestos 275
Graphite 100
Copper 2,500
Zinc 1,000
Lead 2,000
Silver 14
Antimony 25
Brass wire 34
Brass screws 36
Mineral turpentine 300
Turpentine oil 500
Turpentine, refined 15
Paraffin 600
Kerosene and gasoline 70,000
Coal pitch 600
Lubricant oils and greases (bbls.) 45,000
Crude fuel oil 5,000
Dark fuel oil 15,000
Linseed oil 6,000
Varnishes 700
Rosin 1,500
Shellac 90
Wood tar 900
[Tragacanth] gum and various other gums 90
Glues and limes 500
Wax 100
Zinc and lead paints 2,500
Asphalt 3,350
Flower bulbs 740
Garden and tree shrubs [seeds] 117
Cotton and goods 10,500
Hemp 2,000
Cordage 500
Binder twine 1,600
Mexican fibers, etc. 1,100
Wool 800
Boots and shoes 280
Leather goods 300
Leather soles 800
Leather uppers 640
Apricot and [peach] kernels 50
Cocoanuts 100/200
Other nuts and kernels 250
Bananas 1,000
Rice from Orient 3,000
Coffee 16,000
Tea 600
Cocoa 3,000
Glucose 250
Spices 500
Pepper 168
Starch 2,200
Saltpeter 35,000
Rubber goods, rubber shoes and rubber tires 700
Other rubber articles 255
Phosphate rock 56,000
Electric lamps 70
Machine packing 50
Tobacco 5,000
Silk 100
Feathers 400
Various woods, such as mahogany, cedar, walnut, poplar, and red gum 6,000
[Class of goods] [Quantity]
Sulphur 270
Asbestos 275
Graphite 100
Copper 2,500
Zinc 1,000
Lead 2,000
Silver 14
Antimony 25
Brass wire 34
Brass screws 36
Mineral turpentine 300
Turpentine oil 500
Turpentine, refined 15
Paraffin 600
Kerosene and gasoline 70,000
Coal pitch 600
Lubricant oils and greases (bbls.) 45,000
Crude fuel oil 5,000
Dark fuel oil 15,000
Linseed oil 6,000
Varnishes 700
Rosin 1,500
Shellac 90
Wood tar 900
[Tragacanth] gum and various other gums 90
Glues and limes 500
Wax 100
Zinc and lead paints 2,500
Asphalt 3,350
Flower bulbs 740
Garden and tree shrubs [seeds] 117
Cotton and goods 10,500
Hemp 2,000
Cordage 500
Binder twine 1,600
Mexican fibers, etc. 1,100
Wool 800
Boots and shoes 280
Leather goods 300
Leather soles 800
Leather uppers 640
Apricot and [peach] kernels 50
Cocoanuts 100/200
Other nuts and kernels 250
Bananas 1,000
Rice from Orient 3,000
Coffee 16,000
Tea 600
Cocoa 3,000
Glucose 250
Spices 500
Pepper 168
Starch 2,200
Saltpeter 35,000
Rubber goods, rubber shoes and rubber tires 700
Other rubber articles 255
Phosphate rock 56,000
Electric lamps 70
Machine packing 50
Tobacco 5,000
Silk 100
Feathers 400
Various woods, such as mahogany, cedar, walnut, poplar, and red gum 6,000
Deal [Talc] 150
Apples 2,000
Dried fruits 300
Hides 4,000
Tanning materials (including 300 tons chrome salts) 6,000
Deal [Talc] 150
Apples 2,000
Dried fruits 300
Hides 4,000
Tanning materials (including 300 tons chrome salts) 6,000

B. Draft Agreement between the United States Government and the Danish Shipowners’ Association

  • Article 1. Denmark retains for the transportation of her imports from Great Britain and oversea ports a tonnage of [400,000] tons dead-weight, motor and steam ships.
  • Art. 2. Denmark furnishes for the use of the United States and its associates the remainder of the Danish seagoing tonnage consisting [Page 1316]of motor and steam ships of over 500 tons dead-weight. This remainder tonnage amounts at the moment to 437,301 tons deadweight. Of this it is understood that 200,000 tons dead-weight will be allotted to Great Britain, whereas the balance, including the tonnage already trading between the United States and its associates, falls to the United States.
  • Art. 3. Of the tonnage allotted to the United States, up to one-third may be employed for Belgian relief, whereas the remainder must not be employed in the danger zones in Europe and around the Atlantic islands.
  • Art. 4. No demand shall be raised on the part of the United States or its associates for the replacing of ships which are lost or rendered unserviceable as a result of the war or through other reasons.
  • Art. 5. The ships are to be chartered to the United States Shipping Board on the Baltime charter form, the 24 hours clause contained in section 12 of the Baltime form, however, to be deleted. The time-charter rate in safe trade to be fixed at $8.50, and for ships in service for Belgian Relief Commission to $10.75. Payment to be exempt from all American taxes and dues.
  • Art. 6. The United States Government are liable to Danish owners for all losses through war risk as per the following scale: for ships over 30 years old, $140 per ton dead-weight; for ships between 20 and 30 years, $165 per ton dead-weight; under 20 years, $190 per ton dead-weight.
  • Art. 7. The time charters are to be closed for a period of 6 months, but the cessation of the war between the United States and Germany is to entitle Danish shipping immediately to dispose of the tonnage on the termination of voyages upon which the ships in question are then engaged.
  • Art. 8. The ships shall not be employed in the ore trade.
  • Art. 9. The United States Government shall secure to the tonnage reserved for the use of Denmark licenses for and delivery of necessary fuel, ship stores, and provisions for voyages to and from Denmark, both from United States as well as from places where fuel of American origin is obtainable.
  • Art. 10. On the arrangement coming into operation the distribution of the tonnage shall take place in such a way that the Danish steam and motor ships are exclusively chartered for voyages to Denmark or to places whence cargoes to Denmark may be procured in accordance with this arrangement. The Danish steam and motor ships which at the moment are not employed in this manner shall be allotted to the United States or Great Britain after the expiration of the charters, under which they are now employed, until the conditions in point 2 [of] the present arrangement have been complied with.

The Danish Government would be obliged if a copy of the foregoing were given to their Minister in Washington with as little delay as possible.

[
Grant-Smith
]
  1. See telegram No. 1743 of Dec. 25 and 26, 1917, from the Chargé in Denmark. Foreign Relations, 1917, Supplement 2, vol. II, pp. 1102 1107.
  2. Not printed.