Memorandum by the Assistant Secretary of State (Sayre)

Baron van Breugel Douglas14 called on me on Wednesday, October thirty-first, to tell me that in reply to the suggestion which we made to his Government early last summer, in connection with the possible negotiation of a trade agreement between our two Governments, his Government desired to inform us that they welcomed the suggestion of the United States and would be glad to go forward with the contemplated negotiations. He asked whether the matter should be made public and, if so, when. I replied that I was very happy to learn that his Government would be glad to go forward with us and suggested that each of the two Governments now make a thorough study of the trade between our two countries. I said that I would appoint a commission to study the trade from the viewpoint of the United [Page 633] States and hoped that his Government would appoint a similar commission to study the matter from the viewpoint of the Netherlands. I suggested that this study would take a month or two and that when the necessary studies had been completed then we could advantageously exchange lists of desiderata and begin active negotiations. I suggested that he get in touch with me some time in December in order to formulate more definite plans.

I said that it seemed to me very important that no publicity be given to this matter until such studies can be made. If premature public announcement were made of the matter, its effect, I feared, would be to cause domestic producers in both countries to concentrate their efforts in order to prevent any concessions being made which would injure them. I therefore suggested that we keep the matter strictly confidential until later on when, having made the necessary preliminary studies, we will be prepared to enter into more active negotiations. To this Baron van Breugel Douglas agreed.

He next asked what was our general plan in connection with such agreement,—whether to bargain off small advantages on both sides or to seek to reduce trade barriers with the hope of stimulating and increasing the general flow of trade in both directions. I said that our program lay emphatically in the second direction; that we were not so much concerned in trying to out-bargain competitive rivals as in the effort to reduce trade barriers generally so as to increase the total flow of trade in both directions. Baron van Breugel Douglas said that this was also his Government’s desire. He threw out the suggestion that it might be advisable to make a trade agreement which could be modified in a short period, say three months. In this way he suggested more slashing reductions could be made since each side would know that if undesirable results followed the matter could be corrected before permanent harm would be done. He therefore suggested an agreement for a short term with facilities for modifying it in case it produced an excessive flow of trade in either direction. As to this suggestion I was noncommittal in my remarks.

F. B. Sayre
  1. Counselor of the Netherland Legation.