FOREIGN TRADE: Over the Tulips

Two of The Netherlands’ top plant pathologists arrived in Washington, D.C. last week on an important commercial mission. They were there to talk the Department of Agriculture out of limiting imports of Netherlands bulbs (1946 imports: $8,000,000). The department wanted to cut bulb shipments to “amounts needed for propagation.” Its ostensible reason was the threat of importing contagious plant diseases along with the bulbs.

But the real pressure for the ban had little to do with disease; it came from Washington and Oregon nursery men, who resented the popularity of Dutch bulbs among U.S. home gardeners. Whispered one member of the department: “The problem is commercial, but we are trying to solve it biologically.”

Squaw Grass. Such biological warfare annoyed not only the Dutch, but also Mrs. Frank Ball, representative of the Virginia State Federation of Garden Clubs, who is convinced that without Dutch bulbs, U.S. gardens will degenerate into “patches of broom sage and squaw grass.” Cried Mrs. Ball: “Are we going … to deny [the Dutch] the opportunity to earn in trade the very dollars we are called upon to give them?”

But while the department deliberated, the Dutch government took its own swing at free trade.

One of Holland’s largest corporations is the Royal Dutch Petroleum Co., a $440,000,000 concern. An estimated one-fifth of its stock, or $45,000,000 worth, is held by U.S. investors, who, like the Dutch stockholders, have first option to buy any new shares issued. Last week the company announced a whopping new $114,000,000 stock issue. But the Dutch government, by means of new currency controls, virtually froze U.S. investors out.

Investors could buy the new shares only in Holland and at the official rate of 38¢ to the guilder, more than three times the free market rate in New York. They could either sell their options in the U.S.—at a huge discount caused by the Dutch regulations; or in Holland, where the proceeds would be frozen. The Dutch blandly said they were only trying to prevent a dollar drain.

Whatever their aim, they had made a pretty good answer to the U.S.’s highhanded threat to ban bulb imports.