811.24 Raw Materials/233
Memorandum of Conversation, by the Ambassador in Belgium (Davies)27
By appointment, the Ambassador, accompanied by Miss Willis,28 called on the Prime Minister at 10:30 A.M. on Friday, July 7, 1939. Mr. Pierlot received the Ambassador with Mr. Van Langenhove, the Secretary General of the Foreign Office, and Baron van Zuylen, the Chief of the Political Division.
The Ambassador opened the discussion by stating that he was leaving early next week for the United States and that he very much desired [Page 448] to have some definite reply from the Belgian Government in regard to the American proposal for the exchange of strategic raw materials which had been under discussion for some time. The Ambassador stated that in his opinion the question was a simple one, and involved principally a question of policy on the part of the Belgian Government which could be readily determined. Questions of details and in regard to prices, quantity, and quality, etc., could be determined relatively easily because of the fact that the matter had been canvassed very thoroughly in the British-American barter agreement. He hoped therefore that a decision could be had so that he could transmit a favorable reply in principle to his Government before his departure.
The Prime Minister stated that the Government was in favor of such an agreement in principle but that there were details which were of paramount importance to them. He stated further that there were two aspects of the question: (1) the amount of tin the Belgian Government could supply to the United States, which depends upon the tin cartel, and (2) a problem which is far more vital to Belgium, that is, the continuation of the supply of foodstuffs should a war break out, and Belgium remain neutral, and Great Britain establish a blockade. The Ambassador replied that in regard to tin, the United States Government was prepared to take any amount whatever that the Belgian Government could supply. He suggested that the tin cartel was working only on a basis of 50 to 60% of capacity and that there was therefore a margin above Belgian requirements available, and that his opinion was that the cartel would probably accommodate the Belgian Government. To the second point raised by the Prime Minister, the Ambassador replied that this was not a problem which was envisaged by the American proposal, as the American Government was interested in the exchange of stocks of raw materials to be made before war should break out.
In reply, the Prime Minister stated that the mere exchange of strategic raw materials did not interest the Belgian Government unless at the same time some promise could be obtained from the United States that Belgium could continue to obtain foodstuffs after the outbreak of a war. He added that it was not necessarily a juridical agreement which the Belgians wanted, but some indication that the American Government would take the measures necessary to make possible the shipment to Belgium of wheat, for example, and other foodstuffs. The Prime Minister again brought out the point that there were no storage facilities in Belgium for large supplies of wheat and even if Belgium agreed to take a large amount of wheat in exchange for tin, the problem of transportation after the outbreak of war would present itself, and he inquired whether storage could be arranged for the wheat in the United States.
[Page 449]The Ambassador readily admitted that the Belgians must be concerned about the food supply in time of war, but urged that first things be considered first and that what we were concerned with was an exchange of our cotton or wheat for their tin or other commodities now and before war should come. The Prime Minister replied that it was all very well to talk of considering first things first, but that there is an old French saying that “To govern is to look ahead”, and the Belgian Government therefore could not neglect the second problem, that is, feeding the Belgian population after the outbreak of war. The emphasis was placed by the Foreign Office on wheat instead of cotton, as had been the case in preceding discussions. The Ambassador indicated that he believed the American Government might be willing, in addition to an agreement in regard to the exchange of stocks of raw materials, to agree informally to use its good offices with the British Government in case of war to allow foodstuffs to be shipped to Belgium. He made it clear, however, that the American Government could not possibly guarantee anything in this respect because the results would depend upon the British Government.
The Prime Minister stated that perhaps it would be better to await the passage of the American neutrality legislation, which at present appears to be in a somewhat confused state, before attempting to reach an agreement.
The Ambassador expressed the opinion that it would be unfortunate not to arrive speedily at some arrangement; that if it were to be done, it would be advantageous psychologically to do it promptly. He repeated that although the United States could give no formal guarantees in regard to the delivery of foodstuffs to Belgium in war time, the friendly feeling of the United States for Belgium would assure that, as in the last war, Belgium could count on the sympathetic consideration of its problems by the United States. The Ambassador observed that Belgium’s supply of wheat came from Rumania, South America, or the United States. In case of war, the Rumanian source of supply would very likely be cut off, and if there were a British blockade, the United States would probably have more influence than the South American countries in persuading Great Britain to let food supplies pass a British blockade to Belgium.
In a summary the Ambassador brought out four points:
- 1.
- Is the Belgian Government prepared to exchange tin for cotton now?
- 2.
- If it is a question of the exchange of wheat, does the Belgian Government desire to acquire a stock of wheat in the United States, subject to Belgian order, possibly with the understanding that the United States Government would, after the outbreak of hostilities, use its best efforts with the British Government to secure their cooperation in delivering to Belgium, in case of a British blockade?
- 3.
- He emphasized again the value of an agreement quickly arrived at between the United States and Belgium for the exchange of stocks of raw materials. In this connection, he pointed out that while the question of the amount was important, everyone recognized the financial limitations in the amount involved. Nevertheless, it would be beneficial for both countries to do whatever was necessary, promptly and expeditiously.
- 4.
- In the event that Belgium’s policy or commitments to any other nation prevented or constituted an obstacle to the conclusion of such an agreement, the Ambassador indicated that it would greatly clarify the situation if that were admitted now, before further negotiations.
The Prime Minister did not comment directly on all four of the above points because, as they were being translated for him, when the fourth point was reached he immediately asked if the Ambassador had any special nation in mind, for example, Germany, and the Ambassador replied in the affirmative; whereupon both the Prime Minister and Baron van Zuylen said, “No; there is nothing in our relations with Germany which could preclude the type of agreement sought by the United States in this connection.”
The Prime Minister said that he would like to re-examine the question with his Minister of Finance and Minister of Economic Affairs, but he threw out the suggestion that in view of the difficulties of transportation, etc., it might be possible to arrange for a sale of tin now to the United States Government and the constitution of stocks later. The Ambassador quickly replied that if we wanted to buy tin, we could go out into the market and buy it without having to come to Belgium to get it, and that what we were looking for was not only a stock of tin but also an outlet for some of our farm products. The question then came up in regard to whether it was the desire of the United States to have an equal value of cotton or wheat exchanged for an equal value of tin. The Ambassador replied in the affirmative and the Prime Minister then said that such an exchange would require Belgium probably to take more cotton and wheat than she really wanted. The Ambassador again emphasized that the question of the amounts to be exchanged was entirely secondary. We wanted the tin and were ready to take as much as the Belgians could provide, or were willing to trade, and he added that we were aware of the fact that the budgetary problem would present itself and that the Belgian Government would have to consider how much tin it could afford to acquire in order to exchange it for cotton or wheat.
The Prime Minister concluded the discussion by saying that he would examine the question in the light of the new information given him by the Ambassador and that he hoped to have a reply for the Ambassador by Monday afternoon.29