Memorandum by the Secretary of Commerce (Jones) to the Secretary of the Treasury (Morgenthau)26

When Mr. Van den Broek, Minister of Finance of the Netherlands, first spoke to me about a loan for post-war reconstruction, he stated that his Government wanted to be in a position to place orders for some raw materials and equipment so that when the war is over, and materials can be made available, they would be in a position to proceed with their reconstruction problems without delay.

[Page 467]

He stated that they wanted a loan of $300,000,000, payable in installments over a period of 15 years, and at a satisfactory rate of interests—say 3%; that investments in our own country, acceptable to us, would be pledged as collateral; that it was to be a strictly business transaction; and that, pending such time as title to the securities is determined to our entire satisfaction, their gold in this country could be pledged. He stated that they would need particularly railroad materials and equipment, motive power, etc.

I gave Mr. Van den Broek a copy of our loan agreement with the British under which we loaned them $425,000,000. He would like a loan for the Netherlands on approximately the same basis and terms.

I appreciate that our own resources will be heavily drawn upon in the further prosecution of the war, and that means and methods of financing post-war reconstruction in the war-torn countries cannot now be definitely determined. However, the more of us that are ready immediately to get at the job when the war is over, the better.

The Dutch will have not only their homeland to rebuild, but their territorial possessions that are also occupied by the Axis.

I think we can admit that the best way to help people and governments, is to help them to help themselves. If we can help the Netherlands to do their job, they can—and I am sure will—help others that might properly or customarily look to them.

My thought as to what we might say to Mr. Van den Broek at this time is that, assuming we will be in a position to make his country a loan, and that no general plan by all governments to finance reconstruction is adopted from which the Netherlands would get the credit needed, we would make them a loan on acceptable U. S. investments. A condition of the loan would be that we have the right to require that all or any part of the proceeds of our loan shall be expended in our own country, and generally in cooperation with us in post-war reconstruction.

While such a commitment would be clearly a conditional one, it would say to them that we will make them a loan if we are in a position to do so, other demands upon our Treasury considered, provided other sources of credit are not available to them.

I would expect the loan to be set up on a basis which, at our option, could be passed along to private investors—generally along the lines that the RFC has made and sold loans throughout our own depression-recovery period, when credit was not otherwise available on fair terms.

I have discussed the matter at length with Finance Minister Van den Broek, and he recognizes the necessity for our making the commitment conditioned upon future circumstances that may be beyond our control.

He also feels very strongly that because of the cordial relationships long existing between our two peoples and the fact that the Dutch [Page 468]have long been substantial investors in our country, we would want to be of every possible assistance to them in their reconstruction work. There is, of course, no question about that.

Incidentally, our steel mills and other manufacturers will need all of the orders they can get if we are to provide employment for our returning soldiers and others now engaged in war work. To the extent that this can be done through sound loans such as this, the easier it will be on our own Treasury.

A condition of the commitment should be that orders placed by the Dutch would not conflict with our war production or with our postwar plans, and that before placing any orders the appropriate authority of our Government would be consulted by them.

Jesse H. Jones
  1. Copy attached to Secretary Morgenthau’s letter to Secretary Hull dated August 31, 1943, infra.