File No. 656.119/617
The Secretary of State to the Minister in the Netherlands ( Garrett)
1974. Legation 3437, July 14, noon, and supplementing Department 1904, August 10, 2 p.m.1 The proposed agreement with the N[etherlands] O[versea] T[rust] should be made with the War Trade Board of the United States. This agreement should be a separate and distinct agreement from the agreement made with the N.O.T. by the other Associated Governments, although the War Trade Board agreement may be concluded simultaneously with the others and be as nearly identical with them as is practicable, in view of the somewhat different point of view of this Government from that of the other Associated Governments. The following is the comment of the Department and the War Trade Board on the points enumerated in your 3437:
Article 1. Is the present arrangement whereby wheat and other foodstuffs are consigned directly to the Netherlands Government to continue or will the N.O.T. be substituted for the Government? See Netherlands agreement print,2 page 3, section 14, and page 37.
Articles 2 and 3. The bill of lading should contain the name of the importer.
Articles 4, 5, 6, 7, and 11. In view of the policy of this Government with respect to the trade of neutrals, it is not desired by the agreement with the N.O.T. to seek to control the movement of ships and commodities except through the control of ships that belong to the United States or persons of the United States, or through the control of commodities coming from or to the United States, or through the prevention of trade with the enemy direct or indirect by persons in the United States, leaving out of consideration for the moment measures of prevention by maritime capture, etc. For these reasons it is not desired that the War Trade Board agreement with the N.O.T. stipulate for the control of vessels that do not touch at ports of United States or elsewhere where the United States furnishes or controls bunkers or other supplies from the United States, or the control of commodities which do not come from or to the United States.
Subject to the foregoing limitations the principles of 4, 5, 6, 7, and 11 are approved. The limitations involved by the policy of this Government as above expressed must however be taken into account in drafting all parts of the agreement, and the suggestions hereinafter made are to be worked out subject to these limitations. A [Page 1525] broader control covering commodities and vessels not coming under the United States territorial jurisdiction may subsequently be secured by voluntary agreement with the Netherlands Government in return for certain concessions which we may make as part of a rationing agreement.
Article 8 raises, by implication, the whole question of re-exports from Holland which should be carefully considered. The British and French agreements with the N.O.T. both provide that the Trust guarantees consumption in Holland of all merchandise consigned to it including all articles and products manufactured or composed from such imported merchandise. This does not, however, prevent reexport to a Dutch colony, and, with the exception of articles enumerated, does not prevent re-export to a neutral country if the Trust guarantees consumption in that neutral country, and if intermediate transportation is not through an enemy country. Effort should be made to obtain from the Trust an assurance that exports will be made exclusively to one of the Associated Governments when the exported articles are made in Holland out of product received in Holland by virtue of the authorization of an Associated Government.
The French agreement, made later than the British, contains a more extended list of enumerated articles not to be exported to neutral countries. The further possible extension of this list should be considered. The British and French agreements contain no clauses specifying who the consignees shall be in neutral countries, but merely require the Trust to guarantee consumption in such neutral countries. Later communications, however, require a guarantee from the Danish associations and from Norwegian individual importers and associations and prohibit exports to Sweden. See agreement print, pages 8 and 9. It should be possible now to revise these arrangements, especially as regards Norway and Sweden, in view of the control machinery now being set up in these countries.
In a supplementary letter to the French agreement, the Trust adds that it will endeavor as much as possible to prevent the export of merchandise existing or produced in Holland which is freed by imports to the Trust and is similar to such imports. The term “similaire” is considered to mean products corresponding to the same needs as those consigned to the Trust. See agreement print, page 32. In the pending negotiations will there not be an opportunity to arrange that Dutch potatoes and perhaps some other foodstuffs be treated as articles “similaire” to bread cereals? In the Swedish agreement all foodstuffs are listed as articles “similaire” to bread cereals. See agreement print, page 30. This would require modification of the agreement by the British and General Trading Association and the Landbouw Export Bureau relating to the export of agricultural products. See agreement print, page 38.
[Page 1526]Articles 9 and 10 seem proper.
Referring further to article 11. It is suggested that it might be desirable to qualify the 5 per cent clause so as to allow objections to be made by the War Trade Board or I[nter-] A[llied] T[rade] C[ommittee] in case of abuse. In connection with this article it might be proper to refer to goods of Dutch origin or goods imported from neutrals via Germany or from the Allies. These three classes are covered in the British and French agreements under licensed goods from Dutch home ports. Section 13 (a)–(e), page 3, and section 13 (a)–(e), page 30, in the agreement print might serve as a basis for this subject. To what extent, if any, is it now expected that the Netherlands Export Co. should take over the N.O.T. functions in this class of cases?
Articles 12 and 13. Treasury Department desires that no financial clauses be inserted in agreement and that for present existing status of financial control be not disturbed. It is desired that in lieu of articles 12 and 13 there be substituted a general clause to effect that N.O.T. will subsequently, when requested by or on behalf of United States, accept such financial clauses as may then be eventually agreed to.
Following additional comments are submitted for your consideration:
- (a)
- The skeleton set forth in your cable does not touch upon the general question of supervision and detention of ships and goods en route to or from Holland. This subject is covered in the first part of both the French and British agreements under which control is left to the British. Should we not share in this shipping control to the extent that it will be exercised regarding ships touching United States ports and lifting cargoes covered by export licenses issued by War Trade Board? See your cablegram January 291 in this connection.
- (b)
- There should be a, clause to the effect that the Trust will furnish as far as practical all information regarding Dutch products and imports and exports whether or not included within the agreement.
You are authorized to discuss the foregoing with your British, French, and Italian colleagues and to draft a tentative form of agreement in accordance with the foregoing instructions. When such an agreement has been drafted the complete text thereof should be forwarded to the Department for the final approval of the Department and of the War Trade Board and that proper instructions may be given for the execution of the same on behalf of the War Trade Board. It is suggested that you obtain from Sheldon, unless you already have them, the form of proposed agreement with the Norwegian [Page 1527] Trade Association and copies of the Swedish and Norwegian agreements. These may be useful to you in drafting the agreement with the N.O.T.