Memorandum of Conversation, by the Assistant Chief of the Foreign Funds Control Division (Reinstein)

Participants: Mr. D. Crena de Iongh, Representative of the Netherlands Ministry of Finance
Dr. Feis, EA
Mr. Roosevelt,12 A–A
Mr. Reinstein, FF

Mr. de Iongh called by appointment to discuss the Netherlands Ambassador’s letter of July 2 transmitting a statement of Dutch resources and Dutch needs, and suggestions as to methods by which this Government might provide financial assistance to the Netherlands Government.13 Dr. Feis explained to Mr. de Iongh that he had been asked to make a report to Mr. Welles concerning the nature of the Dutch needs and the methods which they proposed to be adopted to meet them, and that he was not empowered to negotiate the extension of financial assistance but merely wished to get a clear picture of the problem. After this picture had been developed, a decision would be reached as to the manner in which further discussions would be carried on. Dr. Feis said that he did not know whether such discussions would be with the State Department or with financial agencies of the Government.

The discussion was devoted principally to questions designed to clarify the statements contained in the letter transmitted by the Ambassador [Page 459]on July 2. The following specific points were raised with Mr. de Iongh:

1. What part of the Dutch budget set forth in the letter will be expended in sterling?

Mr. de Iongh said that the expenditures are for the most part in sterling. He did not have exact figures. Almost all of the Navy expenditures and all of the expenditures of the Department of Colonies are in the sterling area. The larger part of the Department of War expenditures are also in the sterling area. The Debt Service expenditures are almost entirely in the sterling area. Mr. de Iongh said that the British Government does not furnish any assistance to the Netherlands Government for the maintenance and operation of the Dutch Navy, a large part of which is operating in the European area. The Debt Service item of the budget was explained by Mr. de Iongh as constituting the payment of interest on behalf of private Dutch individuals or corporations. He did not explain why such an obligation was undertaken by the Government.

2. Is the budget statement of expenditures of the Netherlands Government alone or does it include the expenditures of the Indies Government? What contribution does the Indies Government make in the defraying of these expenditures?

Mr. de Iongh said that the budget is a combined budget for the Empire. He said that the Indies Government bears only a small part of the total expenditures, specifically the cost of the maintenance of Naval forces in Australia, the Dutch Flying Camp in Mississippi and those expenditures which are directly attributable to the interests of the Indies, such as salaries of the Indies Government personnel.

3. Is the request of the Dutch Government that the United States Government assist it in the meeting of sterling expenditures?

Mr. de Iongh said that this was the purpose of the proposal.

4. Has the Netherlands Government requested the British Government to furnish it with the supplies it is now purchasing for the Navy in the sterling area or has it asked for a loan on the basis of Netherlands private assets in the United Kingdom?

Mr. de Iongh said that no request for such assistance had been made to the British Government.

5. Does the Netherlands Government have any sort of current income whatever?

Mr. de Iongh said that income from the operation of the Dutch merchant fleet is only adequate to cover costs and that, in fact, the fleet has recently been incurring a deficit. In response to a question, he indicated that no request for an adjustment of charter rates had been made to the British Government. He said that the taxation of Dutch individuals and corporations resident outside of occupied territory had been abandoned as impractical. In response to a question, he said that Dutch corporations which have transferred their seats to Curaçao are being taxed only by the local Government for local needs.

6. Have some of the expenditures contemplated in the Netherlands budget been met by Lend-Lease? Mention was made specifically of the expense of building and maintaining the Flying School in Jackson, Mississippi, and the supplying of Netherlands forces in Australia?

[Page 460]

Mr. de Iongh thought that there had probably been some change since the budget was prepared, as a result of Lend-Lease assistance, but it was agreed that the amounts involved would not affect the total picture substantially. Further information on this point will be developed by Lend-Lease.

7. Under the agreements which the Dutch are negotiating with the British, will the liquid assets held by the British Custodians of Enemy Property “on behalf of the Royal Netherlands Government” be made available to the Netherlands Government?

Mr. de Iongh said that the sums would be made available. He explained that the agreement would be a model agreement as far as the British are concerned. Similar agreements will be included with governments of other occupied countries. The vagueness of the language of the agreement in this respect was insisted on by the British to enable them to deal differently with the different exile governments, if it seems desirable.

8. Does the loan proposal envisage recognition of the Netherlands Royal Decree of May 24, 1940 vesting in the Netherlands Government title to Dutch private property held abroad?

Mr. de Iongh said that some steps would be necessary to transfer securities to the name of the Government, so they could be put up as collateral for the loan. He pointed out that this could be done under the Decree. He said that since it would take some time to transfer the securities to the Government’s name, it is contemplated that the loan would originally be secured by the gold of the Netherlands Central Bank and that the gold would be released as the securities became available for collateral.

At the conclusion of the discussion Mr. de Iongh offered to provide any other information which might be desired. It was arranged that the draft statement to be submitted to Mr. Welles on the Netherlands needs and resources would be shown to Mr. de Iongh for his comment prior to its submission.

  1. Kermit Roosevelt, Jr., assistant to Assistant Secretary of State Acheson.
  2. Covering letter of July 2, 1943, not printed; for the document transmitted, see p. 449.