811.24 Raw Materials/91: Telegram

The Secretary of State to the Minister in the Netherlands (Gordon)

30. The Department has taken the occasion of the visit of Dr. G. H. C. Hart2 to Washington on other matters to open up conversations regarding the possibility of exchange of American cotton and wheat for strategic materials, especially rubber and tin. Dr. Hart of course had no instructions regarding this subject but after consultation with the Minister he expressed his own reflections. The following summary of the impression received as to his views is offered solely for your information. In his opinion such exchanges would be advantageous to the Netherlands by supplying an extra-market outlet for rubber and tin, and by affording the Netherlands reserve stocks which would lessen supply and shipping problems in times of international conflict. He foresees a number of difficulties from the standpoint of the Netherlands, however, including the fact that the policy of that Government toward extensive emergency stocks has not been clearly defined; the problem of clearing accounts between the Netherlands Indies, supplying rubber and tin, and the Netherlands Government; political questions which would arise if action by the Netherlands legislature is required; and the fact that, in view of the undeveloped state of the spinning industry in the Netherlands, reserves of cotton could be carried only in the form of yarn. He also doubted that the Netherlands could commit itself to holding the stocks acquired as reserves for an indefinite period; in his opinion the Government would wish to liquidate stocks whenever the threat of war passes.

Conversations may be continued here, but it is believed that the principal discussion of the proposal must be carried on in The Hague. You are instructed, therefore, to present the matter to the Netherlands Government, referring to the conversations already held here. You may be guided in general by the Department’s instruction to London,3 a copy of which is being mailed to you from London. You will feel free to place the proposal before the highest officials of the Netherlands Government, since this Government is very much interested in arranging exchanges along the suggested lines.

It is hoped that the Netherlands Government will at least be interested in exploring the feasibility of such exchanges, the details to be worked out after further study and consideration (including, in all probability, clearance with the international committees controlling [Page 658]rubber and tin, cooperation between the British and Netherlands Governments, and perhaps discussions with other Governments producing these materials). It will be helpful to have full reports from you as to the response of the Netherlands officials and their opinions regarding problems and difficulties to be studied, together with your own recommendations.

One immediate difficulty is the apparent impression that this Government alone is interested in the proposed exchanges. Consideration may be given, therefore, to Dr. Hart’s tentative suggestion that the possibilities offered by this idea might be explored by the international rubber and tin committees and then be brought, by members of those committees, to the attention of the British and Netherlands Governments. In any event, an active interest on the part of rubber and tin producers should encourage those Governments to give full consideration to the idea.

The proposal is being discussed also with the Belgian Government, particularly with respect to the supply of tin.4

You are requested to mail a copy of this instruction to London and to keep the Embassy there informed of developments at The Hague. A copy of the memorandum of conversation with Dr. Hart will be mailed to you in the first pouch.5

Hull
  1. Director of Overseas Trade and Shipping in the Netherland Ministry for the Colonies.
  2. See telegram No. 267, April 18, noon, to the Ambassador in the United Kingdom, p. 234.
  3. See pp. 438 ff.
  4. Memorandum not printed.