811.24 Raw Materials/107: Telegram

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

59. In handing me the aide-mémoire the Foreign Minister gave certain additional explanations which may be summarized as follows:

In order to stimulate all branches of its production and exportation, in trade agreements with various other countries The Netherlands has consented to take various articles which it does not particularly need or want in order to be able in return to dispose of diversity of Dutch products. More particularly in various trade agreements The Netherlands has agreed to take wheat which either on account of its price or quality is not particularly desirable to The Netherlands. In various trade agreements likewise The Netherlands disposes of a certain amount of the valuable and much sought-for commodities of tin and rubber only upon the other parties consenting to take a variety of other Dutch products. The Dutch Government accordingly feels that if it should now consent to our proposed arrangement all these other countries would object strenuously and demand that The Netherlands furnish them with tin and rubber on a barter basis for a limited amount of products of these other countries without insisting as under existing agreements that they take other Netherlands goods as well; thus, the Dutch claim, their commercial position would be greatly impaired.

It was quite evident from the conversation that the country which the Dutch principally fear in this connection is Germany—quite apart from political considerations the Dutch send approximately 15% of their total exports to and receive approximately 21% of their total imports from Germany. In this connection, however, the Foreign Minister also referred to trade agreements with the Argentine, Rumania and Turkey under all of which the Dutch import wheat.

The reply on this phase of the question boils down to the fact that the Dutch say they neither need nor want our cotton or wheat to form reserve stocks. I fear that this is a fact as regards cotton, and the statement that from other countries they are already getting grain which they do not particularly need, while to my mind not conclusive, nevertheless represents their present attitude. I say not conclusive because I understand that at the end of March the Dutch had only some 3 months reserve supply of wheat and as their winter wheat crop was approximately a 90% failure, unless they import more foreign wheat than they are doing this reserve will be pretty well used up by the time the next domestic crop is in hand.

The suggestion as to cash purchases of rubber and tin of course envisages furnishing such supplies over and above the present release [Page 661]quotas established by the rubber and tin committees. The rubber people here have pointed out to the Government that if the International Rubber Committee were to be approached in ordinary routine fashion with respect to authorizing increased quotas the matter would take a long time and accordingly they are prepared if we desire it to send a Billiton7 official—probably Vandenbroek—to the United States to negotiate with a view to expediting matters. This of course means that the Netherlands Government for its part will approve an increase in release quotas for this purpose.

While the last paragraph of the aide-mémoire may seem to be one of courtesy only I trust that it may contain greater possibilities than that, and if we can devise other ways of approaching the matter I think that the Dutch are prepared to give them full and proper consideration.

As indicated above, however, the present status of the question is simply that the Dutch do not consider our proposal a good business proposition. They unquestionably are looking at the matter primarily if not exclusively from the angle of their own self-interest and so far it seems apparent that no considerations of higher politics, as may perhaps be the case in England, have entered into their calculations.

To sum up, I trust it is clear that if the cash purchase suggestion is not feasible I hope we may urge reconsideration of our barter proposal, but to do so with any chance of success the foregoing will indicate that we will have to offer some additional inducement.

Gordon
  1. Dutch East Indies island.