File No. 656.119/652d
The Acting Secretary of State to the Minister in the Netherlands ( Garrett)
1797. The United States is willing to make the following proposals to the Dutch Government, amplifying and improving the offers already made relating to compensation for requisitioned vessels in the event of loss, and to the option of replacement in kind:1
A. Value. In the case of a ship being lost, the United States is prepared either to replace the ship on terms to be given below, or to pay for it in dollars.
The basis for the money payment will be substantially as follows:
- (1)
- Half the money is to be retained in the United States for two years either by deposit with bankers on such terms as may be arranged by the depositors or by investment in the United States in securities to be selected by the Dutch owners.
- (2)
- The other half to be paid in dollars.
On these financial terms the United States Government will be prepared to apply the following values to the Dutch ships: namely, vessels up to 10 years old, £75 per gross ton; vessels up to 30 years old, £60 per gross ton; vessels up to 39 years old, £52 10s. per gross ton.
B. Replacement. United States Government offer the following improvements in replacement offer already made:
- (1)
- The option to choose between money payment and replacement will rest with the owner until 30 days after he has received notification of loss of vessel, or until 30 days after the acceptance of these terms, in case of vessel previously lost.
- (2)
- The rate of interest on the values from the date of loss to the date of replacement will be 10 per cent per annum.
- (3)
- The United States Government undertakes to replace tramp steamers within 12 months from the declaration of peace, and to replace liners within 18 months.
- (4)
- As the question of replacement may be considered by the Netherlands Government as involving a national interest, distinct from the interest of the particular owner, the United States [Page 1517] Government must stipulate that owners who elect cash payments must secure the consent of the Netherlands Government.
If the Dutch Government rejects this proposal we will be prepared to make the alternative proposal contained in Stevens’ cable to you.
The statement quoted herein is identical with the one cabled you by Stevens except that financial terms have been modified to meet the views of the Treasury and comply with legal restrictions. The British may decide to retain in their proposals the financial provisions cabled you by Stevens; we consider, however, that this is a matter on which divergence in terms will not be detrimental. Shipping Board has today cabled Stevens requesting him to ascertain whether British have any objection to our presenting proposals as above modified and instructing him to cable you if they have not. On receipt of cable from Stevens that British do not object you are authorized to present proposals on behalf of United States.
Stevens has also cabled that British are contemplating making through Townley further proposals regarding payment of charter hire involving payment in florins with ten year loan. United States not now prepared to make similar proposal; matter under advisement. You will receive instructions on this point shortly.