800.6176/30
The Chargé in the Netherlands (Wilson) to the Secretary of State
[Received October 9.]
Sir: I have the honor to refer to the Department’s telegram No. 27, of September 24, 5 p.m., 1936, and previous correspondence concerning [Page 512] the meeting of the International Rubber Committee in London today and to confirm the Legation’s reply No. 42, of September 28, 4 p.m., in which I reported what Professor van Gelderen had to say in reply to informal representations made pursuant to the Department’s instructions. Professor van Gelderen is, as the Department will recall, the Government’s expert on East Indian rubber matters and one of the two chief Dutch delegates on the International Rubber Committee.
Although he was naturally unable to give any assurances concerning the meeting or to say what the position of the Netherlands delegation would be, he did say enough, I think, to show that Colonel Townsend’s visit here and my informal intervention had done no harm and possibly some good. I understand from the Embassy in London that some resentment is felt there at our “suspicions” and what is considered a premature and unnecessary interference on the part of Colonel Townsend. There is no such feeling here and it is almost certain that the Netherlands delegates, while they may not favor a ten per cent increase in the restriction beginning January 1, 1937, will advocate a five per cent change.
Presumably the international exchange situation will make it difficult for the Rubber Committee to do its work today. In so far as the pound sterling is concerned, the sudden strength of the dollar may not be permanent but even if Premier Colijn adheres to a “managed currency” instead of a fixed gold parity devaluation, there is little possibility of the florin not being for a long time approximately twenty per cent cheaper against the dollar. This morning the florin is at 1.80 to one dollar instead of 1.47. This would make the price of Dutch East Indies rubber to American manufacturers about what it was last year before the rise to sixteen and a half cents. With this altered exchange rate, American manufacturers can stock up to their hearts’ content and will probably do so, thereby bringing about a scarcity of world stocks which will automatically force the Committee into further releases of rubber. The situation is not at all clear as yet and wont be for several days but presumably the new situation will contain this possibility.
Respectfully yours,