Memorandum of Conversation, by Mr. John C. Ross of the Division of Trade Agreements

Participants: Baron Hervé de Gruben, Counselor of the Belgian Embassy.
Mr. Sayre, Assistant Secretary of State.
Mr. Ross, Division of Trade Agreements.

Baron de Gruben called on Mr. Sayre by appointment at four o’clock this afternoon. Although it had been understood that Baron de Gruben wished to discuss trade-agreement matters, the purpose of his call was to discuss the attitude of this Government, in the event of war, with reference to the shipment in American vessels of Belgian purchases in this country, particularly purchases of raw materials.

Baron de Gruben stated that he had not received instructions from his Government to discuss this matter. He said that if war should break out in Europe his Government would endeavor to remain neutral and would doubtless establish a rigid control of foreign trade. Belgium would be even more dependent upon the United States for its supplies of essential raw materials than at present. His country would be willing to pay cash for such supplies but it would probably be necessary to ship them in American vessels, as Belgium does not have a very large merchant marine. The Counselor was not aware of any specific requirement of American law at present that would prevent such shipments but was anxious lest some executive or legislative action might impair the ability of his country to obtain essential supplies from the United States in time of war.

Mr. Sayre pointed out and emphasized that it is quite impossible to predict the nature of any legislation Congress might pass in this connection and that it is equally impossible to predict any action the Executive might take pursuant to such legislation. In the event of war, there would probably be a conflict of pressures for various courses of action and no one could prophesy the outcome. [Page 219] One important consideration might be the question of transshipments of war supplies to belligerent countries.

Baron de Gruben said that the question of transshipments should not create difficulties, because his Government, which would take control of all aspects of foreign trade, would not permit such transshipments. He said that he understood fully the difficulty of predicting developments in American neutrality policy in the event of war.

The Counselor then mentioned the decline in Belgian exports to the United States during the first half of 1938. He agreed with Mr. Sayre that this decline was probably temporary and due to the economic recession in the United States. He went on to say, however, that Belgian exporters often found themselves between the Scylla of our anti-dumping legislation and the Charybdis of our anti-monopoly legislation. On the one hand they often could not quote a low price for fear of anti-dumping proceedings and, on the other, they could not agree upon a higher price with American producers of like articles for fear of anti-monopoly proceedings.

Mr. Sayre suggested that, if the Counselor would submit a memorandum on any specific cases he might have in mind, the Department would be very glad to look into the matter.

Mr. Sayre then mentioned the Belgian counter-draft of general provisions for the trade agreement between the two countries. The Department had expected to receive this counter-draft for some time and Mr. Culbertson had discussed certain aspects of the matter with Belgian officials in Brussels at the end of April. Mr. Sayre suggested that the Department would be glad to do whatever it could to expedite the matter. Baron de Gruben said that he would try to ascertain the present status of his Government’s counter-draft.