File No. 656.119/166

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

[Telegram]

8621. For your information and for War Trade Board:

No. 146. The following confidential message has been received from Garrett for Sheldon:

Loudon tells me he has told the German Minister of proposals the Dutch are now formulating and that German Minister has stated severe objections to reduction in exports to Germany contemplated in proposal providing for feeding-stuff ration, but it is uncertain how strongly Germany will press these objections. Germans are apparently not objecting to those small restrictions contemplated in the no-feeding-stuff alternative. German Minister has also entered general objections to use as per proposed general agreement of Dutch vessels by Allies but apparently has not yet entered formal protest nor announced the action [as to] counter-measures Germany would take. Shipping circles are not yet taking seriously Germany’s reported threat to withhold coal from all outgoing Dutch vessels. Loudon seems to be pretty confident that German threats will not seriously compromise or even delay conclusion of an agreement. Snouck thinks proposals may be wired to Van Vollenhoven next week.

Since Dutch brought their memorandum from London, the opinion has become prevalent in Holland that it could be taken as a British proposal which was rather favorable but which the Americans would probably not accept. Snouck has said to me that Leverton Harris intimated as much to him. This mis-impression is in fact largely traceable to Snouck who apparently hopes to make America accept the terms of the memorandum by using the Allies against one another or by playing upon our desire not to have all the odium of a miscarriage of the negotiations fall upon America alone. I have pointed out to Foreign Office the nature of the memorandum and that it was thoroughly understood by the Allies mutually that no maritime details had been accepted by any one of them.

At the moment the principal modifications would seem to be: (1) that the Dutch will request assurances that they shall receive the rations agreed upon; (2) that the restrictions [on] exports to Germany, together with the question of fertilizer and feeding-stuff ration, should be considered separately from the remainder of the agreement in order to avoid threatened difficulty with Germans; (3) several larger rations; and (4) a corresponding decrease in ships to be placed at disposal of Allies.

[Page 1395]

Shipowners seem to be offering no complaint against the terms of the permanent agreement.

Snouck is not returning to London, but Valstar will probably return alone on 1st. Convoy sailing after proposals are ready and from there to America if Dutch Government concludes to have a permanent representative there in connection with shipping matters.

Suggest you transmit above to Washington.

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