File No. 656.119/859
The Chargé in Great Britain ( Laughlin) to the Secretary of State
[Received 6.49 p.m.]
No. 3372. War Trade Board [from Sheldon]:
No. 1795. In answer to Dutch memoranda referred to in Embassy’s 3199, October 29, 6 p.m., our 1755. Representatives of Associated Governments have made written reply which I have sent you by pouch to the effect that, generally speaking, negotiations of last January cannot be recognized as basis for present negotiations. That provided there will be no exports [from] Holland to Germany the Associated Governments are prepared, so far as their joint requirements permit, to grant such facilities as may be in their power to secure for Dutch such articles as may be mutually agreed to be actual requirements of Netherlands for home needs. Regarding quinine and bark, Dutch delegates, after communicating with their Government, have replied that, though their Government does not consider it has in any way renounced its right to prohibit such exports, yet it will endeavor to arrive at a satisfactory solution of this question. Associated Governments are replying thereto that they must insist that export licenses for shipments under quinine contract be granted at once for reasons already indicated.
In course of negotiations Dutch informally stated regarding coal that pre-war consumption of 9,000,000 tons per year had been cut down to 6,000,000, of which 3,000,000 would have to be imported. Regarding exports to Germany they modified written memoranda referred to in above cable to the extent that they would not desire [Page 1555] to export foodstuffs to Germany with the possible exception of vegetables and a strictly limited quantity of milk; potatoes can probably be excluded from exportation. At conference of Allied representatives with Dutch not present it was considered that some exports to Germany would have to be allowed but that procedure might be a general prohibition of exports with a secret letter permitting export of not exceeding 15,000 cattle with condition that at least three times as many should first go to Belgium and also permitting export of 1,000 horses, 7,000 foals and 1,000 tons of offals per year. It was considered that export of hides, technical fats, and scrap iron and steel should be prohibited. It was also considered that any ration schedule should be headed with statement that rations are subject to ability of Dutch shipping to lift them. It should be understood that Dutch will agree not to demand return of any shipping; that Dutch should cooperate fully with the various Allied purchasing executives and that agreement should contain a clause that Dutch will assist to redevelop evacuated parts of France and Belgium.
Dutch are very anxious for departure of three ships with cargoes of copra referred to in above cable. It was therefore considered that as soon as quinine matter settled, the ships might be allowed to proceed to Atlantic islands subject to condition that delivery of this oil should be made to Allies.
If general agreement be not concluded I expect shortly to send you a cable as a result of deliberations with other American heads of missions here on the question of the continuance of Allied machinery for joint purchases and transportation of commodities which system should be expected to be available for neutrals and possibly enemy countries. The duration of the proposed Dutch agreement would naturally depend somewhat on the decision on this general subject, but I should like to have your views on the specific question of the duration of the Dutch agreement and also on any other points mentioned in this telegram.