Memorandum by the First Secretary of Legation in the Netherlands (Wilson)6

I went to see Professor van Gelderen7 at eleven o’clock and had a half hour’s conversation with him and with Jonkheer Loudon8 of his office.

He said that there were certain things which he wished to discuss informally and which had not been put in the official Note which had been sent in reply to the Legation’s Note No. 353.9 I told him that we had received the Note on Saturday and that the general assurances contained therein were most welcome. He then said that the policy of the Government of the Netherlands East Indies had in no way changed and that if the price of rubber had risen in an extraordinary fashion it had been entirely unforeseen and could not be said to be due to the statistical position of rubber production. His information was that it was principally due to speculation very much as the rapid rise in copper had been due to the same cause and that since we had recently passed through a period of rising commodity prices, it did not seem entirely surprising that rubber had gone along with the rest. However, he hastened to add that the present price was too high for Dutch tastes and that they would be satisfied with a considerably lower price, both from the native and the plantation rubber angle. I told him that I was glad to hear that in view of their new policy towards native rubber they had not changed their opinion as to what was a satisfactory price. I presumed that was what he meant. He answered that five gold British pence per pound would be satisfactory and that they still thought so but that a slightly higher price would not seem excessive.

He then went on to say that he wished to say something about the working of the Committee and principally as to the attitude of the British members. He thought that in view of the careful study of the statistical position made by the Committee and of the fact that our manufacturers had four or five months supply in stock, it was difficult to understand our great concern and our periodical efforts to bring pressure for increased percentages of free rubber. He said that the [Page 880] British were in the same position as the Dutch, namely, that rapidly increased production involved a good deal of expense and in some sections required considerable time. He pointed out that whereas in Java production could be increased fairly rapidly, Sumatra presented an entirely different picture because of the labor problem. The British had these problems too and were not in favor of too rapid increases in the percentage of free rubber because they could not produce to that extent any more than the Dutch. In any case, he thought we were perhaps suffering under an illusion with regard to the British attitude. He had found them very conscious of their responsibilities and not at all anxious to bring about excessive prices—on the contrary, anxious to avoid speculation. He added that a vote had never been necessary in the Committee, for the British and Dutch delegates had seen eye to eye on every occasion, basing their opinions on carefully gathered statistical information. It had been and was the purpose of the Committee to decrease the restriction as rapidly as seemed justified and to stimulate production along sensible lines as rapidly as that seemed justified by market conditions.

I thanked him for telling us this and said that neither Mr. Emmet nor I had heard the opinion expressed that the restriction was being used for any purpose except the one which was announced in June of 1934. I added, however, that despite the repeated assurances that the Committee’s actions would take care of the price situation, there had been an extraordinary rise in the price of rubber and that the fears of the American manufacturers had seemed to have been fully justified.

He then said that he had in mind some plan whereby the consumer-manufacturers in America, Germany, England, etc. would combine in a purchasing plan whereby some guarantee of the steady control of purchases might be assured on an annual basis, thereby giving the producing territories something of a guarantee or at least an incentive to increase production. I told him that I could express no opinion as to whether this would prove an acceptable idea, but that it was my understanding that cooperation between the large American companies was more evident this year than it had been before, although I could not say to what extent this cooperation was or could be carried.

Finally I told him that Mr. Emmet had received instructions to make strong representations to the Government of the Netherlands and would do so in the afternoon at the Ministry of Foreign Affairs.

Warden McK. Wilson
  1. Transmitted to the Department by the Minister in the Netherlands in his despatch No. 638, January 27; received February 9.
  2. J. van Gelderen, rubber expert of the Netherlands Ministry of the Colonies and Chief Delegate for the Netherlands on the International Rubber Committee.
  3. Alexander Loudon, First Secretary of the Netherland Legation in Switzerland.
  4. Dated December 28, 1936, not printed; see the Legation’s despatch No. 614, December 28, 1936, Foreign Relations, 1936, vol. i, p. 519.