894.6363/388
Memorandum of Conversation, by Mr. Alger Hiss, Assistant to the Adviser on Political Relations (Hornbeck)
Baron van Boetzelaer42 called upon me at his request and said that the Legation had received a telegram raising some questions about our policy of granting export licenses for petroleum shipments to Japan while refusing to grant the necessary payment licenses for the same exports under the freezing regulations. He said that his Government had expressed a reluctance to adopt a similar practice for fear that it might lead to unnecessary misunderstanding with the Japanese. He explained that the Japanese might think that they were entitled to export shipments for which export licenses had been granted and would then feel unnecessarily irritated if they found that due to payment restrictions this was not the case.
I told Baron van Boetzelaer that as a matter of fact according to my understanding we had issued only three export licenses for permitted petroleum shipments and that thereafter in the course of conversations with representatives of the Japanese Embassy on the issue of payment it had been more or less mutually agreed that as a matter of practice we would no longer issue export licenses until the manner of payment for the particular shipments involved had been agreed to. I said that it seemed to me that if his Government preferred not to issue export licenses until all matters relating to the shipments under consideration had been clarified, there would be no divergence of fundamental policy from our practice. [In this connection we have been notified by the British Embassy that the British intend to make their export licenses the final act of control over all shipments to Japan. Messrs. Stopford and Dent have said that they understand this to mean that before an export license is granted all necessary payment requirements and shipping requirements will have been met.]42a
Baron van Boetzelaer went on to say that he felt the important point was that there be no shipments in fact without full understanding of the policy involved between his Government and the American Government. He said that the Netherlands Government had thus far refused to permit shipments on three tankers which have called at Indies ports and that one of these tankers sought diesel oil at Tarakan which was of a quality and quantity that placed it within any Netherlands quota that might be established as the equivalent of even the reduced quota for diesel oil which the United States has under consideration. This refusal had been based on the fact that we had not [Page 877] permitted exports of similar oil because of our financial requirements even though export licenses therefor had already been issued by us. [In connection with the Netherlands East Indies attitude on payment matters see note at end of this memorandum.]
Baron von Boetzelaer then said that he had further been informed that the Netherlands Indies Government, which as we had previously been informed considers that our quotas for crude oil, diesel oil and fuel oil are too high, is willing to reduce its comparable over-all quota for permitted exports of petroleum products from 800,000 tons (which he understood to be the 1935–1936 level) to 570,000 tons annually. He went on to say that in terms of specific commodities for the rest of the year 1941 this figure would mean 60,000 tons of low grade gasoline, 2,000 tons of kerosene, 40,000 tons of fuel oil, 30,000 tons of crude, and 40,000 tons of diesel oil.
Baron van Boetzelaer then said entirely on his own initiative that he believed that his Government would be prepared to cut off all exports of petroleum if the United States were to adopt a similar policy although he thought that such action would raise political questions for discussion between his Government and the American Government before the action was finally decided upon.
I told Baron van Boetzelaer that I would convey the information which he had supplied to Mr. Acheson and others in the Department interested in the matter. He said that he would like to call upon Mr. Acheson to discuss the question because his Government was anxious that a definite policy be arrived at as soon as possible. He said further, however, that he was trying to collect a good deal of other related information which he hoped to obtain within the next day or so and that it might be well for him to wait to see Mr. Acheson until this information had reached him. He said that this information related in part to the question of what imports into the Indies from Japan the Indies Government considered essential. He thought that only cotton textiles were involved but he was not in a position to say so definitively at this time. Nor could he at this time estimate the quantity and value involved. He also hoped to receive shortly from his Government information as to whether any official announcement of export policy had been communicated by the Indies Government to Japan in recent weeks. [We have been informed by Mr. Grew, see Tokyo’s telegram number 1310, of August 26,43 that the Dutch Indies authorities have recently expressed to the Japanese Consul General in strong terms their adherence to a policy of hereafter forbidding the exports of all oil to Japan unless Japan publicly declares that she does not intend to attack the Indies and unless Japan withdraws its troops from southern Indochina. According to Mr. Grew’s information [Page 878] this statement was confirmed to General Pabst, the Netherlands Ambassador at Tokyo, by the Netherlands Government.] Finally Baron van Boetzelaer hopes to obtain more definite information than he has at present as to Dutch policy with respect to exports to Japan of other important commodities such as rubber and tin.
[Note: We have heard from a number of sources that the Indies Government wishes to cause the Japanese to use up their present blocked guilder balances in the Indies in order to be in a better position to require the Japanese to supply such articles as the Netherlands Indies find it necessary to import from Japan. In this connection it seems relevant to point out that, according to information received from the British Embassy, the Government of India, which also desires certain essential imports from Japan, has adopted a different policy in order to accomplish the same result. The Indian Government will not permit the use of blocked Japanese funds in India to pay for exports to Japan but requires fresh imports from Japan as a source of purchasing power for exports to Japan. It would seem that this policy is more likely to be effective in compelling the Japanese to supply needed imports than is the current Dutch policy and is at the same time less likely to appear to be at variance with our own freezing policy vis-à-vis exports to Japan.]
- Minister Counselor of the Netherland Legation.↩
- Brackets throughout this document appear in the original.↩
- Vol. v, p. 281.↩