File No. 656.119/617

The Minister in the Netherlands ( Garrett) to the Secretary of State

[Telegram]

3437. Department’s 1656, June 21, noon. There appears to be a desire among Allied representatives in London for each Ally to have identical contract with Netherlands Oversea Trust. Sheldon has suggested advisability of having single contract to which local joint committee would be the party on behalf of all four Associated Governments. I believe the contracts should be identical but nevertheless concluded separately, although simultaneously. There are many essential details of the contract especially concerning Scandinavian traffic, correlation with agricultural and re-export agreements, etc., about which inter-Allied discussion can much better be carried on here than either in London or Washington. Sir Francis Oppenheimer, who is the one British official most familiar with the Trust, is now here. I respectfully suggest therefore that you authorize me to confer with the Allied ministers here in order to draw a proposal [for] identical Trust agreement which would be submitted to our respective Governments for approval before it would be communicated to Trust. In so authorizing these local discussions, kindly indicate in how far you provisionally approve the following principles:

(1)
All exports to Holland from United States or on vessels which touch a port where United States controls bunkers will be consigned to Trust except as otherwise provided by War Trade Board.
(2)
Trust will furnish War Trade Board representative at The Hague with full manifest of all vessels coming to Holland from or by way of port where United States controls bunkers within 48 hours after arrival in Holland.
(3)
Trust will not proceed with indorsement of bills of lading until so authorized by War Trade Board representative and will withhold indorsement from bills of lading for all shipments indicated by him.
(4)
In case of goods coming on vessels which do not touch at ports where United States or her allies control bunkers, Trust undertakes that no Dutch vessel will bring goods to Holland unless consigned to Trust except as specifically authorized by the Associated Governments jointly.
(5)
Furthermore, Trust undertakes to furnish local joint committee within 48 hours after arrival of each vessel mentioned in foregoing paragraph with full manifest.
(6)
Trust will not proceed with indorsement of bills of lading of such vessels except by approval of the Associated Governments and will withhold indorsement of bills for any shipment indicated by them. In practice the Associated Governments could communicate with Trust through local joint committee for the sake of expediency.
(7)
Trust will not issue import license for goods from any source whatever to persons who are on United States Enemy Trading List or may be separately indicated by War Trade Board representative.
(8)
Trust to maintain present system of requiring guarantees of importers that terms of United States export license or other undertakings required by War Trade Board should be observed.
(9)
Trust to communicate to local joint committee all applications for import.
(10)
To communicate to committee all Trust import licenses granted indicating nature of guarantee.
(11)
No goods to be shipped from Holland on any outgoing vessel whatever if of enemy origin or if imported into Holland from neutral countries via Germany except:
(a)
Goods destined for United States or destined for other countries but to be conveyed on vessels touching ports where United States controls bunkers, for which War Trade Board has issued special license;
(b)
Goods containing less than 5 per cent enemy material or workmanship;
(c)
Goods destined for neutral countries whose shipment may be specifically authorized by the Associated Governments in practice—local joint committee might for expediency’s sake be authorized to speak for Associated Governments in such matter;
(d)
Goods of cargoes and amounts whose export to Dutch colonies may [by] agreement later be approved by Associated Governments.
(12)
All securities shipped from United States to Holland to be consigned to Trust and to be released only upon authorization and under conditions indicated by War Trade Board representative.
(13)
I do not believe at present we should facilitate import into United States of securities which are not allowed thither by British system of control, for if such plan were announced now, it would result in diverting considerable profits into undesirable hands of present holders who have been speculating on the chance to smuggle or ship legitimately into United States securities which are disqualified by Trust in accordance with Trust agreement with England. Furthermore, for the reason that many concerns looked upon by British and also ourselves as enemy traders would immediately demand removal from black lists on the ground that their only offense had been securities traffic which United States now recognizes as legitimate. I do believe, however, that our arrangement should provide for the direct shipment to Federal Reserve Board unhindered by British censor of mail bags containing only securities whose shipment is approved by Trust according to whatever arrangement we may make with Trust. We are now fully capable of controlling this traffic ourselves and it is important from point of view of prestige that we should do so. For the present the arrangement between the Trust and the seven banks in Amsterdam should not be disturbed as it might derange influences which are needed in connection with placing of proposed Allied loan in Holland.

I respectfully ask your authorization as soon as possible to proceed with provisional drafting of arrangement for submission to you. Edwards concurs in foregoing.

Garrett