File No. 763.72/5165

The British Embassy to the Department of State


The British Government has been in negotiation with the Netherlands Government on various trade matters, including shipping. Pending a favourable reply from the Netherlands Government to the proposals made to a Dutch representative in London, the British Government has decided, as a modus vivendi, to allow Dutch ships sailing to or from Dutch ports to call at a British port outside the danger zone for examination, provided that all such ships inward bound to Holland carry only approved cargoes, and provided that ships outward bound to South America or to Pacific destinations via the Panama Canal will agree, so far as cargo space will permit, to call at a United States port and load American coal outwards to the West Indies, the Panama Canal, the Plate or even the Atlantic islands (Canaries and Cape Verde) if required.

This modus vivendi will, however, only last till June 9, by which time a reply from the Netherlands Government is required to the full British proposals. Under this arrangement, Dutch vessels will be able to leave Dutch ports for the United States in ballast. Ballast voyages westwards have always been necessary owing to the absence of cargo for American destinations, but if the United States requires goods from Holland, or elsewhere which could be carried by Dutch vessels, the British Government would doubtless be glad to add this to the conditions, …

It will be seen that the above arrangement, purely temporary in its character, only endeavours to meet one of the many requirements of [Page 1120] the Allies in the matter of Dutch shipping. The efforts of the British Government have always been, and must continue to be, directed to release Allied ships so far as possible from such essential overseas services as the supply of coal to the Atlantic coaling stations and also to release British ships, and the ships of other European Allies to as great an extent as possible, from transatlantic trades, so as to divert such shipping and also British coal resources to the service of the Allies in European waters. Thus this modus vivendi with Holland dovetails to a certain extent with other proposals already made to the United States Government, notably the suggestion that American ships should, so far as possible, take over the carriage of goods from the United States to the United Kingdom, Italy and France, which are at present carried in British or other European Allied ships, thus releasing the latter for the carriage of coal and other supplies from the United Kingdom to Italy and France.