Papers Relating to the Foreign Relations of the United States, 1918, Supplement 1, The World War, Volume II

File No. 656.119/118

The Ambassador in Great Britain ( Page ) to the Secretary of State

[Telegram]

London , January 1, 1918, 3 p.m.
[Received January 3, 7.08 a.m.]

8117. My 7967, December 14.¹ Since sending above, daily informal conferences have been held by Allied representatives and Allied and Dutch representatives on all phases of Dutch problem. These have been conducted by Leverton Harris, Parliamentary Secretary of the Ministry of Blockade. On the arrival of Oppenheimer, British commercial attaché at The Hague, he reported that the (1) sand and gravel controversy, (2) suspension of cable facilities, (3) detention of Dutch vessels in American ports, (4) uncertainty in Holland as to American attitude, had stimulated pro-German feeling in Holland and increased the effect of German propaganda in Dutch circles formerly pro-Ally, to a disquieting extent. In addition to this situation the apparent disposition of the Dutch delegates to meet the Allied views as regards a material restriction of exports to Germany has led British representatives to favor a limited ration of feeding stuffs and fertilizers. The possibility of such a proposal was contemplated by Taylor and Cecil at first meetings of Allies and Dutch. In consequence of Dutch suggestions as to limiting exports to Germany the discussions have proceeded on the possible assumption that fertilizers at least would be admitted so as to increase harvest and thereby decrease tonnage that is more required for imports of cereals. Having this in mind and as the result of many conferences, a series of memoranda have been drawn up to be a possible basis on which the Dutch should submit proposals to the Allies, the British would appear to be willing to approve them. No delegates appear to have had very definite instructions as to the principles to be followed in these discussions and the American representatives in particular have carefully avoided committing themselves. The memoranda as eventually drafted by the Allies, which we are now referring to you, are to be given Snouck, one of the Dutch negotiators, who returns with them to Holland in a few days on the understanding that his Government will present proposals to the Allies tallying as near as possible with the Allied position as shown in the memoranda.

The memoranda are being drafted in two alternative forms, the first now on a limited amount of fertilizers but no feeding stuffs, the second provides in addition to fertilizers the import into Holland of limited quantities of feeding stuffs in consideration for restriction of exports to Central Powers.

The essentials of the first are as follows:

(1) Imports into Holland of 70 per cent of the 1916 overseas imports of fertilizers including Chilean nitrates and American phosphate in proportions to be mutually agreed with the Dutch, in consideration therefor a limit of 2,500 tons of early potato export to Germany with no other export of potato or potato products. No sugar to be exported to Germany except in articles which shall not exceed in sugar value export to England and Belgian Relief. The caloric value of fruit and vegetable exports to Germany not to be greater than 1917 values.

(2) The export to Germany during the coming year of 5,000 old horses only without prejudice to the hides agreement.

(3) The amount of meat cattle export to Germany to be equal only to that exported Allies and Belgian Relief.

The essentials of the second memorandum are:

(1) Import of 250,000 tons of feeding stuffs.

(2) No cattle export except to Allies and Belgian Relief.

(3) Five thousand old horses to be exported to Germany.

(4) No pork products, poultry, rabbit or eggs to be exported except to Belgian Relief.

(5) Eight thousand two hundred and fifty tons of butter and 15,000 tons of cheese only to be exported to Germany.

(6) The Allies and Belgian Relief to be furnished with at least 2,750 tons of butter and 7,500 tons of cheese and any additional exportable surplus of these articles, thus modifying the existing agricultural agreement.

Within the last few days the Dutch negotiators have taken the position that they may not be able to prevail upon their Government to present an offer on the basis of the second memorandum indicated above, as it in effect involves a break in the agricultural agreement with Germany so that they foresee serious difficulty with the Imperial Government if the Dutch do make this second series of memoranda the basis for their proposals. The Allied negotiators will probably consider making the importation of all oils and fats dependent upon the reduction in exports to Germany as per alternative 2 above. All interests of the Belgian Relief are being carefully considered by all delegates at all stages of the discussions. Arrangements will be made for a minimum of monthly credits and further credits depending upon the volume of East Indian-American trade. The British Government is not for the present insisting on making the entire agreement with the Dutch dependent on the cessation of the transit and export of sand and gravel, etc.

In informal conversations with the Dutch, Leverton Harris succeeded in practically obtaining the Dutch consent to the reduction of certain rations determined upon before Taylor’s departure, but on the other hand because of the change of policy noted above, because of the great deficiency in the Dutch 1917 harvest, the Foreign Office apparently desire the ration of bread, cereals, rice, tapioca, sago, starch and malt to be 400,000 tons for cereal year ending November, and it is probable that they will recommend rations of 8,000 tons of cocoa, 100,000 tons of refined petroleum, at least 20,000 tons of gas oil and 13,000 tons of tanning material with an immediate shipment of an extra tanning material ration, the reason for this being that [Austria] is providing Holland with tanning material, together with certain other possible increases. The questions of Dutch tonnage have been the most important and the most difficult for me to face in the absence of a shipping expert and we were guided by Taylor’s interview with Cecil providing division half and half with British which was subsequently abandoned, we understood, by Taylor, on the French representations that the control should be inter-Allied, and until the arrival of McCormick’s telegram on Swedish tonnage¹ I agreed to the American presentation of the Allied control point of view. As a result of the above understanding I have assumed, however, that McCormick’s telegram above noted outlines the policy you desire in regard to neutral tonnage and have proceeded in the discussions on the assumption. Since its arrival I foresee that we shall have difficulty with the other Allies unless it is made clear to them that while control is in our hands employment will be satisfactorily arranged taking other Allied interests into full consideration. The Dutch appear to be reasonably meeting most of the suggestions advanced by British experts as to the employment of their tonnage but still refuse to contemplate its use in the war zone. Discussion of the status of their East India tonnage and its employment is still proceeding and will probably be concluded within a day or two and the result incorporated as a part of the memoranda above noted.

It is not unreasonable to assume that the feasibility of the memoranda as a basis for Dutch proposals will turn largely on the tonnage question especially as regards the East India traffic. The Dutch hold out for as large an amount as possible and [of?] Dutch shipping to be used in the regular trade between the Dutch East Indies and Allied ports keeping this tonnage nominally under their own management but agreeing to the nomination of cargoes by the Allies to meet their position. On this point it is not [now?] proposed to fix voyage rates equivalent to time-charter rates agreed to for Dutch ships trading outside the danger zone. The British suggest 25 shillings per ton dead weight per month as a fair price for a time-charter rate. What are your views? The reason of the Dutch anxiety to retain nominal control over as much of their tonnage as [possible] is to enable them to resist German pressure by showing that Dutch tonnage is trading essentially in the interests of Dutch colonies. There is a general conviction here that it would assist the negotiators to meet the Dutch view as far as is consistent with Allied needs for essential commodities drawn from the Dutch East Indies and it is suggested that the employment of Dutch tonnage be so arranged as to secure useful intermediate services as, for example, Java–United States, United States–Japan or India and thence coal to Java or Singapore. Having this in mind we must determine what is the maximum amount of tonnage which could be usefully employed in trade from the United States to Dutch colonies. I presume this amount would depend on the extent to which the United States would find it necessary to draw on Java for 1918 sugar and arrangements to be made in special agreements for receiving tin and other East Indian products.

The Dutch have mentioned 460,000 dead-weight tons including bunkers as amount now employed in Dutch East India traffic. This figure includes trade on India and Australia and according to view here appears excessive for real needs.

The figures concerning Dutch tonnage and the trades in which it is very advisable will be cabled as soon as they are in shape.¹

Page

1. Foreign Relations, 1917, Supplement 2, vol. II, p. 1155.
1. See telegram No. 6103 of Dec.22, 1917, to the Ambassador in Great Britain, Foreign Relations, 1917, Supplement 2, vol. I, p. 651.
1. They were cabled, Jan. 3, by the British Foreign Office to the Embassy at Washington for communication to the Department of State. (File No. 656.119/119.)