894.24/1567
Memorandum of Conversation, by Mr. Alger Hiss, Assistant to the Adviser on Political Relations (Hornbeck)37
| Participants: | Dr. Loudon, Minister of the Netherlands, and |
| Baron Van Boetzelaer, Minister Counselor of the Netherlands; | |
| Mr. Noel Hall, Minister, British Embassy; | |
| Mr. Dean Acheson, Assistant Secretary of State, and | |
| Mr. Alger Hiss. |
Mr. Acheson talked first briefly to Mr. Noel Hall and told him that it had been decided that the wisest policy for this Government to follow with respect to advice to the Standard-Vacuum Company regarding that company’s shipments of petroleum from the Netherlands East Indies to Japan would be to inform the company substantially as follows:
- (1)
- As to the contract entered into in November 1940 between the Standard-Vacuum Company and the Japanese Company we would suggest to the Standard-Vacuum Company that it not make application to the Netherlands East Indies Government for export licenses for shipments of petroleum called for in the contract. It would be presumed that the purchasing company, i. e., the Japanese Company, would be sufficiently interested to make such applications if it desired to continue to receive shipments of petroleum under the contract. The Japanese Company appears in any event to be the appropriate party to make such application;
- (2)
- With respect to the company’s normal business with Japan carried on by its own branch in Japan under a quota established by the Japanese Government, it would be wise to make no decision at the present time and the company should make no application for the present for export licenses.
Mr. Noel Hall said that he considered the proposal wise and that his authorization was sufficiently broad to permit him to say without hesitation and without referring the matter to his Government that the British Government would adopt a like policy with respect to the Shell Company.
At this point in the conversation Dr. Loudon and Baron Van Boetzelaer were received by Mr. Acheson, Mr. Hall remaining with the conferees.
Mr. Acheson thereupon explained to the Netherlands representatives the above proposal of this Government stating that the British Government was in accord with our position. Mr. Acheson went on to explain that we felt that the Netherlands Indies Government should be in position to determine with complete freedom of action what, if any, [Page 253] part of the companies’ shipments of petroleum should continue to go forward to Japan under present conditions. It was explained that in order to make it clear that this Government was not recommending that the Netherlands Government decide to continue existing shipments but was leaving the matter up to the Indies Government, this Government had requested the American Company—the British Government is taking similar action with respect to the Shell Company—to make no applications and no representations in the matter. Mr. Acheson further stated that
- (1)
- in order to accord any decision of the Netherlands Government full support he wished to say that in the event that the Netherlands Government decided to issue export licenses for any petroleum products belonging to the two companies, the United States Government would authorize payment from blocked Japanese funds in the United States to the companies concerned and,
- (2)
- on the other hand, in the event that the Netherlands Government decided to refuse any export licenses for petroleum products, this Government correspondingly would refuse to issue licenses under our freezing orders for payment for such shipments and, further, would be glad to announce this publicly in order to show that we were in full agreement with the Netherlands Government and that, in fact, it would be useless in any such case for the Netherlands Government to authorize export licenses since by virtue of the policy of the United States Government payment could not be made for the authorized shipments.
Dr. Loudon and Baron Van Boetzelaer listened attentively and asked a number of questions. They expressed their appreciation for the consideration shown to the Netherlands Indies Government and said that they would obtain the reaction of that Government to the proposals Mr. Acheson had outlined, Mr. Acheson made it clear that with respect to the normal or quota business our tentative decisions to hold the matter in abeyance would remain in effect for about a week, at the end of which time the matter could be reconsidered, we hoped with the benefit of the views of the Netherlands Indies Government.
Dr. Loudon remarked that, as was obvious, political as well as economic considerations were involved. He said that the Indies Government might wish to discuss the relevant political questions with the United States Government before arriving at a decision. Mr. Acheson replied that he understood this perfectly and that if it developed that the Indies Government did desire to raise political questions, Dr. Loudon should take such questions up with the Secretary of State.
At this point Dr. Loudon had to leave the meeting in order to keep an appointment with the Under Secretary. Mr. Acheson then made available in strict confidence to Mr. Hall and to Baron Van Boetzelaer copies of a memorandum38 prepared in CO39 listing the detailed [Page 254] restrictions now in effect with respect to the export of petroleum prodducts from the United States to Japan. This memorandum indicated which items are on a completely prohibited basis and as to the other items set forth the quantities which will be permitted to be exported during the remaining half of this year. Mr. Acheson orally described, again in strict confidence, the other restrictions vis-à-vis Japan with respect to exports and imports. Both Mr. Hall and Baron Van Boetzelaer expressed their appreciation for the information which had been supplied to them and said that it would be helpful to their governments.
Previous to the above meeting Mr. Acheson had informed Mr. Walden, Chairman of the Board of the Standard-Vacuum Company, of the Department’s decision. Mr. Walden had expressed himself as completely cooperative in spirit and had said that he would impress upon Mr. Wilkinson of the Shell Company the importance of the Shell Company’s following the same procedure.