811.24 Raw Materials/253
The Chargé in Belgium (Wilson) to the Secretary of State
[Received August 8.]
Sir: With reference to my telegram No. 92 of July 26, 1939, 6 p.m.,32 stating that the Belgian Government had encountered certain difficulties in connection with the proposed exchange of wheat for tin referred to by the Belgian Minister for Foreign Affairs in his note of July 10, 1939 (see my despatch No. 389 of July 11), I have the honor to inform the Department that I have had conversations on July 26 with Mr. Van Langenhove, the Secretary General of the Ministry for Foreign Affairs, and on the previous day with the Prince de Ligne, in which the subject of these difficulties was discussed.
In the course of these conversations I gathered that the Belgian Cabinet is giving its continued attention to the proposed barter, but that the Belgian authorities are encountering considerable opposition and certain technical difficulties. A number of wheat-producing countries with which Belgium has concluded commercial agreements, such as Argentina and Canada, have heard of the proposed exchange and are making representations to the Belgian officials, alleging that if American wheat should be acquired in this manner Belgium would be according privileged treatment to the United States. They claim [Page 453] the right under the terms of their agreements to deliver this wheat to Belgium provided they can offer equally satisfactory terms. I pointed out to Mr. Van Langenhove that these representations of the aforementioned governments could be properly answered by informing them that the proposed exchange of tin for wheat was in no sense a commercial transaction and could not, therefore, constitute a valid ground for protest, and was informed in reply that the Belgian Government intended to take this position. In addition to the foregoing I was told that certain members of the Cabinet are not entirely in favor of the proposed transaction and that a number of Belgian commercial interests have also expressed disapproval, the Chamber of Commerce at Antwerp, for instance, which apparently dislikes direct intergovernmental trade, and a number of Belgian exporters to wheat-producing countries with which commercial arrangements have been made, who fear that their business will suffer if their markets should be affected by retaliatory action taken by the countries in question.
On the subject of tin, the Prince de Ligne stated to me that the Belgian Government has approached a number of leading Belgian producers. The latter, however, do not show any eagerness to dispose of any of their product, as they are now selling their entire quota to private interests and fear that if they should divert some of their sales temporarily to the Belgian Government, they might thereby lose regular customers. Another aspect of this matter is the problem of where the Government will find the necessary funds, as such purchases would, of course, entail a burden on the budget. The Prince de Ligne told me in this connection that he had consulted with Mr. Gutt, the Minister of Finance, in regard to obtaining the tin through negotiations with the Cartel. No inquiries have as yet been made in London by the Belgian officials who, I gather, apprehend that the Cartel would not show any enthusiasm for the proposed transaction, as the tin to be acquired thereby would probably be obtained at reasonable prices, it being the policy of the Cartel, on the other hand, to reserve the production of its members for more advantageous sales, such as might be effected in the event of war. It appears that Mr. Gutt considers it advisable to wait until September, when an important meeting of the Cartel will be held in Brussels. He suggested to the Prince de Ligne that at that time a request could be made for a general raise in production quotas for the benefit of the United States, as he understood that the American Government desired a very large quantity of tin. I pointed out to the Prince de Ligne that such a project would apparently constitute a purchase and not an exchange, and could not, therefore, be considered under the present plans. To this he rejoined by stating that he had heard that Congress had appropriated a large sum for direct purchase and that these [Page 454] funds could be used as indicated above. In reply I stated that I did not have before me the latest information on this subject and maintained the views I had expressed concerning the necessity for an exchange of materials and not a purchase.
At the conclusion of my conversation with the Prince de Ligne, I indicated that the approaching end of the Congressional Session might delay ratification of such a barter arrangement until next year unless very prompt action should be taken, and urged that the Belgian Foreign Office send me as soon as possible a note giving the present status of the matter. To judge from my subsequent conversation with Mr. Van Langenhove, it would appear that the Belgian Cabinet is now studying and discussing the matter actively. It is hoped that the Belgian officials will be in a position to reach some definitive conclusion within the next few days.
- Not printed.↩