Memorandum of Conversation, by the Under Secretary of State (Webb) 1

  • Subject:
  • 1. Dutch Security Apprehensions regarding the Justice Department’s Anti-Trust Action Against the International Oil Cartel.
  • 2. EDC Ratification
  • 3. France and the Tunisian Case in the UN.
[Page 1286]
  • Participants:
  • Dr. J. H. van Roijen, Netherlands Ambassador
  • The Under Secretary
  • L/E—Mr. Metzger
  • WE—Mr. McClelland

Ambassador van Roijen said that he wished to speak about the anti-trust litigation between the U.S. Justice Department and the international oil concerns. He recalled that Dr. Luns had raised the matter with the Secretary in their conversation of September 10,2 particularly its impact in Indonesia. The Ambassador said he was instructed to reiterate his Government’s “grave concern” regarding these developments, and to express their fear that the disclosure of information regarding the operations of these oil companies outside of the U.S. and Europe might result in strategic impairment to the Netherlands. His Government was especially concerned, the Ambassador emphasized, over the position of Royal Dutch Shell in Indonesia. There was already tangible evidence of the difficulties which could arise from the U.S. action. The Indonesians, for example, having agreed to a date on which discussions were to be held with the Dutch regarding various oil property financial arrangements, had immediately pulled back when the news of the U.S. anti-trust action broke and had postponed further action indefinitely. Given the existing strong opposition in the Indonesian Parliament to the oil companies, the levelling of an official accusation in the United States against these concerns for illegal acts made the position of the Indonesian Government doubly difficult.

Ambassador van Roijen went on to say that he had been instructed, secondly, to tell us confidentially that the Netherlands Government was seriously considering what measures should be taken to prevent their oil companies from handing over documents which might prejudice national security interests. He said that his Government hadn’t yet decided what course to adopt. It was not yet certain whether they would follow the procedure of sending a letter to the oil companies requesting them not to surrender documents used by the British in the Anglo-Iranian case. He was inclined to think, however, that the Netherlands Government might go even farther and pass a decree forbidding the companies to do so.

I replied that we had taken it for granted that sooner or later the Dutch would be in to see us on this matter. We had already had numerous approaches by U.S. and British oil concerns. The Department was, of course, well aware of the serious international complications which could result from the Justice Department’s [Page 1287] action. With respect to the release of documents, I told the Ambassador that while we recognized its serious implications, I was afraid that our courts would sustain the subpoenas. It was my understanding, I added, that to date no Dutch concerns, properly speaking, had been subpoenaed, but only the Asiatic Petroleum Corporation, which was a United States concern.

The Ambassador confirmed the correctness of my statement, adding that he believed Royal Dutch Shell maintained only a representational office in the United States and did not operate here as such. Dr. van Roijen noted that a complicating factor in this respect, nevertheless, was that one of the directors of Asiatic Petroleum, Mr. Wilkinson, was also a director of Royal Dutch Shell.

In response to my query, Mr. Metzger explained that the arguments of the oil concerns to quash the subpoenas would be concluded today, and that the court was expected to render a decision later on in the week. Mr. Metzger went on briefly to describe the nature of the subpoenas served on Asiatic Petroleum, and emphasized that as yet no Dutch concerns were directly involved.

Ambassador van Roijen remarked somewhat wryly that although this might, in fact, be correct, the subpoena against Asiatic Petroleum was obviously only a first step.

I observed that this also could be taken for granted. The Ambassador then described laughingly the position of a common Dutch acquaintance of ours who was at present in Canada, and who, he said, had no intention of setting foot across the border under present circumstances.

I told the Ambassador that unfortunately there was almost nothing I could say at the moment about this whole affair. We had, of course, assumed in advance that the Dutch would be making representations to us regarding Royal Dutch Shell. Ambassador van Roijen rejoindered that he hoped very much some way could be found to safeguard Netherlands security interests in respect to the action against these companies. I told him we hoped that some screening of the documentary material to be presented could be carried out, but that I could give him no definite assurances on this score. Unquestionably the whole matter had dangerous aspects.

The Ambassador reacted promptly and with obvious interest to my mention of the possibility of screening, and wondered how much could be done in this respect. I told him that depended, of course, on just how the Justice Department made its case. The Department of State had no legal right to intervene, but, at most, the possibility of perhaps bringing some moral pressure to bear. Mr. Metzger observed that the Department could, for example, call attention to any evidence involving extreme security considerations. I remarked that what might affect security, however, might be quite [Page 1288] different from information which could have very unpleasant political repercussions. About the only comfort I could give the Ambassador, I said, was to state that we are greatly concerned regarding the potential effects of this action on our own foreign policy. We also realize that it complicates the Indonesian situation.

[Here follows discussion of the European Defense Community and the Tunisian question at the United Nations.]

  1. Drafted by Roswell D. McClelland of the Office of Western European Affairs.
  2. A memorandum of this conversation is in the Secretary’s Memoranda, lot 53 D 444, “September 1952”.