DEPARTMENT OF STATE Memorandum of Conversation
Date: March 15, 1949
Subject: United States - Danish Shipping Problems
Participants: Mr. Gustav Rasmussen, Danish Foreign Minister Mr. Henrik de Kauffmann, Danish Ambassador Mr. Frants Hvass, Danish Foreign Office Mr. Povl Bang-Jensen, Danish Counselor
The Secretary Mr. Charles E. Bohlen, Counselor Mr. Ernest A. Gross, Assistant Secretary Mr. John D. Hickerson, Director, EUR Mr. Benjamin M. Hulley, Chief, NOE
Copies to: S/S, N, C, EUR, TRC, NOE, LE American Embassy, Copenhagen
Shipping matters brought up by the Danish Foreign Minister in talking with the Secretary on March 15, 1949, are covered by the following transcript of the conversation.
MR. RASMUSSEN: The first is the proposed bill about fifty per cent of cargoes being necessary to send on American keel. Our Ambassador has taken this matter up with the State Department and I shan't go into the details, but I would only like to mention that we follow this question in Denmark with some concern , a concern which I am sure has been given expression, also, from other countries.
Then, there is another shipping business which I would like to refer to and that is the remaining settlement of the indemnifications from those Danish ships which were taken over during the war. As you perhaps may recall, forty Danish ships were requisitioned during the war and there have been lengthy negotiations about the compensation problem and, in the main, this problem has been fully settled and the indemnification has been paid out for thirty-five of the forty ships. Although the settlement for the thirty- five ships is definitely in order, there still remains an amount that is about three million dollars, which the American Treasury has not paid out so far. This amount has been retained partly as security for taxation claims amounting to four hundred thousand dollars, and partly because the Controller General has not recognized the amount fixed by the American Maritime Commission as a compensation.
Ambassador de Kauffmann has had all these negotiations for years, he recently sent a note to the State Department, a note of the 15th of January, this year, in which this problem has been taken up again. I would only like to say that in Denmark we have had some difficulty in understanding the attitude of the American Government because, as we have seen it, this settlement, after so many years of negotiations, has now been reached and we thought that-it came as a surprise that a part of the compensation could be kept back from the Danish ship owners on the ground that the Controller General refused to recognize the amount of the compensation fixed by the Maritime Commission and, perhaps even more surprisingly, because of this tax claim which we have difficulty in finding justified. But that all refers to what is left in connection with the thirty-five ships for which a settlement was reached.
Now, there are five more ships in respect of which no settlement has been reached so far. The Danish ship owners have claimed compensation amounting to three million, three hundred fifty thousand dollars ($3,350,000), and the Maritime Commission has offered a lesser amount, that is, about two million, nine hundred thousand dollars ($2,900,000). Now, under American law, we understand that a ship owner in such a case is entitled to claim seventy-five per cent paid out of the compensation fixed by the Maritime Commission, and in order to do so it has been necessary to file suit here in the States and I understand that the attitude of the ship owners, supported by the Danish Government, is fully appreciated by the State Department, but that, also, in that case, the Controller General has interfered and refused payment on the ground that he can't recognize the amount fixed by the Maritime Commission. Also, this matter has been dealt with in Ambassador de Kauffmann's latest note of the 15th of January, and I should be very glad if you see your way to find an arrangement to speed the matter up so that, after so many years, the story could find a satisfactory conclusion.
MR. ACHESON: Well, this particular matter is a very difficult one for me to deal with, because the law firm with which I used to be a member has been involved, I think, in this claim and my participation in it would be somewhat misunderstood by critics. But what I shall do is to ask the legal adviser and the Under Secretary to look into the matter and see if there is something that can be done on it. But I think as far as I am concerned, I'd better not deal with it in any way.
MR. RASMUSSEN: Well, Mr. Secretary, I hope you will forgive me, but when I have this rather rare opportunity of speaking to you, I felt bound to relieve my heart on this matter.
MR. ACHESON: Well, I am very glad you did and we shall pass on what you have said to the Under Secretary and I know he will do whatever he can to see that action is taken. What sort of action, I don't know.
MR. RASMUSSEN: Thank you.
MR. ACHESON: What you really want is to get something moving.
MR. RASMUSSEN: Yes.
MR. ACHESON: On the first matter that you mentioned, Mr. Minister-what is the present status of that, that is in the ECA bill, isn't it?
MR. GROSS: The Bland bill.
MR. ACHESON: Is it a separate bill?
MR. GROSS: It is a separate bill. I don't know what the status is, Mr. Secretary.
MR. HICKERSON: Mr. Secretary, we have had representations from Ambassador Kauffmann and from all of the maritime countries and we have duly communicated those to our people who are interested, and I can't at the moment tell you the exact status. It is a problem we recognize-but we have a very difficult legislative situation and here is something the Maritime unions, the ship owners, the ship builders, are united on, one of these rare things where the unions and ship owners are together.
MR. GROSS: One difficulty, as you know, is that it is not in the charge of the House Foreign Affairs Committee. The points of view which that Committee might have on the matter, which would be more likely to coincide with the views of the State Department, are not being brought to bear in the same way as if that Committee had charge of the bill. We have had some difficulty because of that.
MR. BOHLEN: The bill was introduced by the Chairman of the Committee-the Congressman who introduced it is also Chairman of the Committee.
MR. ACHESON: Well, this is a matter which is receiving attention and I have talked with the President about it and I remember he is personally concerned about it, and everything that can be done will be done.
Reporter: H.A. Deeds:aj