MAR 15 1968

PROF DR E. H. VAN DER BEUGEL

DEN HAAG, March 12, 1968

SMIDSWATER 1
TEL. 070-113567

My dear Henry,

Thank you so much for your letter of March 7.
The dates suit me very well. Let me propose the following.

I arrive in Boston late in the afternoon of the 8th.
I very much like to meet Milton and Vivian Katz and perhaps
I could spend an evening with them.

I have my seminar on the 9th and either we spend the
evening together in Boston or when you would be in New York,
I fly back to New York and we can spend the evening of the
9th there. I will keep the morning of the 10th also free.

Could your secretary book a room for me for the evening
of the 8th and dependent on your plans also for the 9th in
the Ritz Carlton.

I cannot tell you how much I look forward to see you
and talk for hours.

Prof. Henry A. Kissinger
Harvard University
Center for International Affairs
6 Divinity Avenue
CAMBRIDGE (Mass.) 02138
U.S.A.

U.S.A.

CAMBRIDGE (Mss.) 05138

6 Divinity Avenue

Center for International Affairs
Hrvasard University

Prof. Henry A. Klaasen

With warmest regards,

and talk for hours.

I cannot tell you how much I look forward to see you
the Ritz Carlton.

of the 8th and dependent on your plans so far for the 8th in
Could your secretary book a room for me for the evening
8th there. I will keep the morning of the 10th so far.
I fly back to New York and we can spend the evening of the
evening together in Boston or when you would be in New York,
I have my seminar on the 8th and either we spend the
I could spend an evening with them.

I very much like to meet Milton and Vivian Katz and perhaps
I arrive in Boston late in the afternoon of the 8th.
The dates suit me very well. Let me propose the following.
Thank you so much for your letter of March 7.

My dear Henry,

PROF. DR. E. H. VAN DER BEUGEL

MAR 15 1968

TEF 030-113287

2MID2WATES 1

DEM HAVG. MARCH 15, 1968

MAR 21 1968

PROF. DR E. H. VAN DER BEUGEL

DEN HAAG, March 18, 1968

SMIDSWATER 1
TEL. 070-113567

My dear Henry,

Do you think that there is any use in seeing the people
of the Kennedy outfit in Harvard?

You always had in mind to arrange something of this
kind but I do not know how the circumstances are at the
present.

If you still think that this contact is useful, the
morning of the 9th of May would perfectly fit in the program
you envisage.

U.S.A.

CAMBRIDGE (Mss.a.) 05138

6 Divinity Avenue

Center for International Affairs
Harvard University

Prof. Henry A. Klaasen

With warmest regards,

you envied.

morning of the 9th of May would perfectly fit in the program
If you still think that this contact is useful, the
present.

kind but I do not know how the circumstances are at the
You always had in mind to arrange something of this
of the Kennedy outfit in Harvard.

My dear Henry,

MAR 21 1968

TEF 030-112263

2MID2WATER 1

DEN HAVG. March 18, 1968

## Professor Paul Samuelson

**Office:**
E52-383C Economics Department
MIT
Cambridge, Massachusetts

**Phone:** 864-6900, extension 3368

**Home:**
75 Clairmont Road
Belmont, Massachusetts

**Phone:** IV4-6497

## Professor Raymond Vernon

**Office:**
Center for International Affairs
6 Divinity Avenue
Cambridge, Massachusetts 02138

**Phone:** 868-7600, extension 2124

**Home:**
1 Dunstable Road
Cambridge, Massachusetts 02138

**Phone:** 547-3494

## Professor Adam Yarmolinsky

**Office:**
Langdell Hall
Harvard Law School
Cambridge, Massachusetts 02138

**Phone:** 868-7600, extension 4111

**Home:**
6 Longfellow Park
Cambridge, Massachusetts

**Phone:** 864-0275

## Professor Francis Bator

**Office:**

Institute of Politics
Littauer 125
Harvard University
Cambridge, Massachusetts 02138

Phone: 868-7600, extension 4251

**Home:**

8 Wyman Street
Cambridge, Massachusetts 02138

Phone: 864-3533

## Professor Robert Bowie

**Office:**

Phone: 868-6700, extension 2124

**Home:**

170 Coolidge Hill
Cambridge, Massachusetts 02138

Phone: 876-9524

## Professor Richard Neustadt

**Office:**

Institute of Politics
Littauer 127
Harvard University
Cambridge, Massachusetts 02138

Phone: 868-7600, extension 2512

**Home:**

10 Traill Street
Cambridge, Massachusetts 02138

Phone: 491-6127

(Area code for all above telephone numbers: 617)

SCHEDULE

Mr. Van Der Beugel:

Wednesday, May 8

Arriving afternoon

Dinner with Mr. and Mrs. Katz, 6 Berkeley Street, Cambridge

Thursday, May 9

<table><tr><td>10.30 a.m.</td><td>Dean Ford, University Hall 5</td></tr><tr><td>11.30</td><td>Professor Vernon, Center for International Affairs, 6 Divinity Avenue</td></tr><tr><td>12.00</td><td></td></tr><tr><td>12.30</td><td>Lunch at the Faculty Club with Profs. Kissinger, Bator Neustadt and Yarmolinsky</td></tr><tr><td>2 - 4 p.m.</td><td>Seminar at the Center for International Affairs<br>Subject: The present situation in Europe, and Europe's relationship to the United States.</td></tr></table>

DEN HAAG, June 13, 1968

SMIDSWATER 1
TEL. 070-113567

JUN 18 1968

My dear Henry,

The combination of a columnist and a radio and television commentator is extremely rare in the Netherlands. One of the very few examples is Dr.G.B.J. Hiltermann who probably is the most influential and popular writer and commentator in the field of foreign policy in this country.

He will be in the United States from the 15th of July till the end of August and I would be very grateful if you could spare him some of your valuable time.

His schedule is co-ordinated by "AVRO representative Klaas Jan Hindriks - 4000 Tunlaw Road Apt. 121 - Washington D.C."

I think the simplest way would be if your secretary would let him know a few alternative dates on which you could manage to receive Mr. Hiltermann.

Of course there is no question of any publication on the conversation you might have with him. He is just in the United States to refresh his impressions.

Professor Henry A. Kissinger
Center for International Affairs
Harvard University
6 Divinity Avenue
CAMBRIDGE (Mass.) 02138
U.S.A.

U.S.A.

CAMBRIDGE (Mass.) 05138

6 Divinity Avenue

Harvard University

Professor Henry A. Klaasen

United States to refresh his impressions.
the conversation you might have with him. He is just in the
Of course there is no question of any publication on
could manage to receive Mr. Hiltermann.

I think the simplest way would be if your secretary
Washington D.C."

Klass Jan Hindrika - 4000 Tunisaw Road Apt. 151 -
His schedule is co-ordinated by "AVRO representative
could spare him some of your valuable time.

He will be in the United States from the 12th of July
commentator in the field of foreign policy in this country.
propably is the most influential and popular writer and
One of the very few examples is Dr.G.B.J. Hiltermann who
television commentator is extremely rare in the Netherlands.
The combination of a columnist and a radio and

JUN 18 1968

TEF 050-113823

SMIDSWATER 1

DEN HAVG. June 13, 1968

AUG 9 - 1968

PROF. DR E. H. VAN DER BEUGEL

DEN HAAG, 30 August 5, 1968

SMIDSWATER 1

TEL. 070-113567

My dear Henry,

/- will

When you receive this letter you will know how things went. These days I be tense for you because they will also be decisive for your personal future in the next years.

If Rockefeller does not make it you will have the feeling of a vacuum but you should know that it must give you satisfaction that, anyhow, you were in the camp of the best candidate. Be assured that my thoughts are very much with you.

This is not the only reason that I write you today. I write you today because I read yesterday (coming back from a two weeks vacation in France) your Bismarck article and I simply cannot wait to tell you how deeply impressed I am. This is the kind of article you read once or twice in five years. I have read, I think, every piece you published and you know that apart from some disagreements on minor points, it is always a joy to read your books and articles. This Bismarck article, however, in my opinion beats everything you have done in the last 4 or 5 years. I read it last night and the only thing I can say about it is, contrary to reading almost every other article, that I felt a shock that I couldn't go on reading 50 pages more of it. It is superbly written, on every page there are thoughts and expressions which gave me a thrill and filled me with admiration. In summary: a great article !

Do let me know how you are when you have five minutes to spare for a devoted friend.

Prof.Henry A.Kissinger,
Harvard University,
6, Divinity Avenue,
CAMBRIDGE

Knickerbocker
International

A NEW LOOK AT EUROPE-U.S. RELATIONS

*An analysis by Prof. Dr. E. H. van der Beugel*

ROAD-CAR RATIO: A WIDENING GAP

*Car park quadrupled in decade*

PROBLEMS OF CONTAINING CHEMICAL EXPANSION

*The search for new location*

UPWARD TRENDS IN STEEL

*Big boost in investments*

LONG HOT DECADE AHEAD

*Shaping the fundamentals of a new society*

THE MAGAZINE OF ANALYSIS AND ADVANCED PLANNING

MONTHLY EDITION, VOLUME 30, NUMBER 8, AUGUST 1968

One image can't fit all Norelco products

IN BROADCASTING, FOR EXAMPLE, Norelco products include a camera that was a key breakthrough in color television, the first portable TV camera of broadcast quality to be marketed, monitors, microphones, video tape recorders, CCTV systems and Plumbicon tubes, to name a few. In addition, scientists, engineers and technicians at our plants, laboratories and research centers are creating a vast

array of other products for industry and government. Everything from X-ray equipment to electronic reservation systems. Even an Oscar-winning motion picture projector. Yes, the familiar Norelco trademark that you see most often on our shavers, radios and tape recorders also represents one of today's largest, most diversified and most advanced industrial corporations.

North American Philips Company, Inc., New York, N.Y.

Knickerbocker
International

Vol. 30 No. 8

August 1968

First issue published November 15, 1938

IN THIS ISSUE

page

THE RESTLESS PROGRESSIVES 7

WHAT'S NEW 9

UPWARD TRENDS IN STEEL 12

A NEW LOOK AT EUROPE /
U.S. RELATIONS 14

THE ROAD-CAR RATIO:
A WIDENING GAP 16

PROBLEMS OF CONTAINING
CHEMICAL EXPANSION 19

CREATING 6000 ACRES IN THE
NORTH SEA 20

LONG HOT DECADE AHEAD 22

ATLANTIC OBSERVER 24

PERSONAL NOTES 29

NEW INDUSTRIAL
DEVELOPMENTS 30

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AUGUST 1968

5

We might deplore it, we might cry for
the moon of a strong, unified, cohesive
Europe, but there is no substitute for
American leadership and commitments.

A New Look At
Europe-U.S. Relations

When I reread the article I wrote in "Knickerbocker International" of April 1967 on the state of the Western alliance and tried to compare it with to-day's state of affairs, I came to the sad conclusion that many elements of our situation have further deteriorated. Therefore I think the question where we are going is a legitimate one.

Let us first have a short (and there-
fore by necessity oversimplified) look at
the main actors. When we start in Europe
we see a *United Kingdom* which is still
in the full and painful process of adjust-
ment to its limited role in the world
based on limited resources. Or to put it
more bluntly, which is still in a full
balance of payments crisis. Its application
to join the process of European integra-
tion has been brutally vetoed for the
second time by France. Its currency has
been devalued but there are still no signs
that this "has done the trick". It is going
through a period of domestic political
malaise in which a declining confidence
in the present government is not clearly
combined with a growing trust in the
opposition. The malaise is not only
directed against the government but
against the political system. Two years
ago if one had said that the Scottish
question could become a real issue, one
would have met with an incredulous
amusement. But to-day it is an issue,
because it is symptomatic of the urge
to look for a "third" solution when one
is fed up with the two traditional options.
This state of affairs primarily concerns
the British people. But it also affects us
because this combination of factors
prevent our British friends to play their
indispensable role in the affairs of the
Western alliance. Britain, not being a
world power anymore, is still a major
factor because of its democratic matu-
ry, because of its huge reservoir of
human talent and because of its expe-
rience in world affairs. A recovery of the
British situation is a prerequisite for an
improvement of the Western alliance.

To write about France during these
weeks is even more complicated than

usual. There is no question in my mind
that Gaullist foreign policy has the doubt-
ful honor to qualify for a very high prize
if not the golden medal for destructive
activities in the Western alliance.

It is a long and rather frightening list of
policy decisions, inspired by an irrational
combination of the search for grandeur
and a feeling of contempt towards the
United States and France's European
partners. The only clear benefit resulting
from this policy has undoubtedly gone
to the Soviet Union which received the
desintegration of the Western alliance
— one of its permanent and unchange-
able objectives — on a golden platter
without paying any price for it.

The frontal attack on NATO and the
withdrawal from its military organization,
the double veto of the British application
to join the Common Market, the vitriolic
way in which the problems of the dollar
were approached, the dubious attitude in
the Arab-Israel conflict, the unprecedented
arrogance of the Quebec performance
and above all the effort to make selfish
and narrow nationalism respectable with
its consequence for policies of other
European countries are a few examples
of the liabilities on the balance-sheet of
French policy. Are there any assets? I
do not see them in the foreign policy
field and certainly not after Algeria. And
on the domestic scene it has become
quite clear that the alternative "chaos
or me" is the classical example of the
selffulfilling prophecy so characteristic of
the Gaullist regime. If one first helps to
destroy all the other options and then
solemnly declares that there are only two,
then there is a real possibility that this
becomes true, not because it cannot be
avoided but because that situation has
been deliberately created. The "arrogance
of lack of power" can be more destruc-
tive than the "arrogance of power". The
only thing one can say to-day is that the
France of De Gaulle will never be what
it used to be. The bluff has been called.
It is an open situation again.

Germany desperately is trying to find
an acceptable solution for the discrepancy

between its huge economic power and
its weak international position. It is still
a divided country in the heart of Europe
and it has not much hope left that reuni-
fication will emerge from the deliberate
policies of its Western allies. It is per-
fectly understandable that with the
decline of the impetus of European
integration and Atlantic cohesion — two
pillars of post-war German foreign
policy — its national aspirations have
moved up on its agenda. Till now it has
acted with great restraint. It has tried to
develop a new East policy but contrary
to France, it has tried to do this in con-
sultation with its main allies. It has tried
to balance between Washington and
Paris knowing that Paris from the point
of view of security never can be an
alternative to Washington, but knowing
also that breaking with Paris implies the
end to a policy which has firm roots in
German public opinion. It can, of course,
go on for a limited period to show this
restraint and this understandable lack of
a clear policy. But not for very long. If
the desintegration continues in the West,
then one day there will be a purely
German policy and there is a danger that
this policy will not be in the interest of its
allies nor in the long-term interest of
Germany itself.

It is perhaps even more difficult to
write about the *United States* in June
1968 and try to see through the all-
absorbing tragedy of these days. One
of the very encouraging signs of the
health of the country during the last two
or three months was the way in which
democracy was at work, how the aliena-
tion of many from the political system
was gradually transformed into a near
total involvement of nearly every indi-
vidual in the democratic process. With
all the excesses of the political campaign,
often difficult to understand even by
America's closest friends, it was never-
theless undoubtedly a working democ-
racy in which one fought for improve-
ment of the system but not against the
system. And now a senseless murder
puts even that in jeopardy again.

14

KNICKERBOCKER INTERNATIONAL

The feeling of "a democracy at work" was a very welcome sign in a situation of great complexity and impending danger for the role of the U.S. in the world. The cumulative efforts of the Vietnam war, the problems of race and poverty and a major balance of payments crisis could undoubtedly lead the U.S. more than at any moment since 1945 to a reappraisal of its priorities and policies.

I happen to belong to the few outside the U.S. who have followed the Vietnam intervention with a mixture of concern and understanding for the terrible dilemma of the Administration and even today I refuse to join the battalions of those who see the picture in black and white. But nobody can deny that Vietnam has drained away American leadership and vitality from practically every other field of foreign policy. Nor can anybody deny that what looks like the first unsuccessful intervention in American history will have certain consequences for America's position in the world. When this happens in the same period in which grave and explosive problems in the American society come into the open and the position of its currency is constantly threatened, the logical conclusion must be that this reappraisal of American power, priorities and commitments might lead, not to anything comparable to American isolationism, but to a certain retrenchment of its role in the world. But this is not the whole picture. There is no doubt a very serious generation problem in the Western World. To escape it by calling it an irresponsible action of an irresponsible and tiny but violent minority does not meet the seriousness of the problem at all. Trying to link it to specific circumstances in specific countries does not lead to anything. The classrooms at the Sorbonne were overcrowded, but were they at Columbia? Where is the negro problem in Amsterdam, or the Springer concern in Rome?

The Vietnam war was perhaps a more general target of discontent. But nobody should have the slightest illusion that after the Vietnam conflict is solved, this clash between the young and what they consider the established order will be terminated. This is not the place even to try to analyze what the deeper causes are for this generation problem. In the field of foreign policy, however, and more specifically in the question of cohesion and vitality of the Western alliance the generation problem is one of the first magnitude. Those who have not lived through the thirties in which our student generation witnessed the terrible consequences of the lack of will power and force in the West which brought the Second World War over us, who have neither lived through the simpleness of purpose of the Second World War nor through the joy of re-

construction and integration of the Western World, will approach basic issues of foreign policy in a different way. The feeling that the Cold War and the leadership of that period belong to the established order and therefore should be changed is very strong indeed among the younger generation. In their appraisal of the changed relations between East and West the young are not alone, certainly not in the judgement of what it means in terms of necessary cohesion and strength of the Atlantic World.

There is a growing feeling in the West that something basic has changed and that the underlying assumptions of our policies of the post-war era have either been wrong or should be fundamentally changed. For some the changes in the Eastern European countries are the proof that the concept of the bipolar world is outmoded, for others the emergence of China as a world power will of necessity change the posture of the Soviet Union towards the Western World and again for others the changes in the Soviet Society are so fundamental that to speak of a continued Soviet threat to the countries of the Atlantic Alliance is a fossil remnant of a former period. In other words there are fundamental differences in the appraisal of what one generally calls the phenomenon of detente.

While not denying any of these developments in the Soviet world and the impact they might have on the balance of power in the world, I do think that it is much too early to draw far-reaching consequences from it in terms of the necessity for strength and cohesion in the Western World. In the first place it would be paradoxical if at the same moment when our policies of the last 20 years might lead to a real detente, we ourselves would destroy the instruments which helped to bring about that situation.

But there is more. We have no proof whatsoever that what we call detente is more than the desire of the two main powers to avoid a nuclear confrontation. The Soviet bloc is still at the Elbe, their military power increases every day, their policy objectives have remained the same, i.e. to consolidate and strengthen their Western flank and to try to remove United States power from Europe and especially from Germany. If they succeed, nobody could expect them not to fill the power vacuum which then would result in Europe. And there are other means to fill a power vacuum than by overt military action. Of course we follow with great interest and even with emotion the struggle for more freedom in the countries of Eastern Europe. For a foreseeable future, however, there are no signs that this movement will affect the basic power structure or will be allowed to do so.

Finally, the impact of the emergence of China is in my opinion still in the area of pure speculation, and it would be highly irresponsible to base our policy on the wishful possibility that this in the near future will have drastic consequences for the policy of the Soviet Union towards the Western alliance.

Difficult as it may be to analyze our present situation it is an easy task compared to saying something sensible about what will happen to our alliance in the next few years without making the classical mistake of confusing what *will* happen and what *should* happen; in other words to confuse the desirable and the obtainable. One thing seems clear to me. In the next two years it will be decided whether we now go through a temporary valley of a process of integration of the Western World, or whether we are near the end of an effort to structure our part of the world, the end of a dream. Whether it is only a *temporary* relapse will be primarily conditioned by the possibility of the United States to revitalize its foreign policy and to reassume its leadership.

It might sound grossly unfair after everything the United States has done since 1941, to appeal again to our American friends, the more so because of its present predicaments and in the light of the greatly improved economic conditions of its European allies. There is, however, no substitute for American power, leadership and commitments. We might deplore it, we might cry for the moon of a strong, unified, cohesive Europe, we might embrace the attractive concept of the Atlantic partnership between the United States and an equal unified Europe, but in doing so we substitute what is obtainable by what is desirable, certainly on a short term.

*(continued on page 28)*

PROF. DR. VAN DER BEUGEL
"Something basic has changed"

AUGUST 1968

15

KNICKERBOCKER INTERNATIONAL ANALYSIS

# THE ROAD-AUTOMOBILE

## Car Park Quadrupled in Decade

Roads are the arteries of Netherlands prosperity. Small and densely populated, with a highly developed economy, now and in the future The Netherlands must constantly concentrate on providing the most efficient possible facilities for transport. In the total context of modern transport routes, through the air, over the sea and by rail, roads fulfill an essential connecting function. It would be disastrous if the construction of roads snagged or bogged down because of lack of planning.

The highways and roads of The Netherlands are good ones, at least in comparison with the road systems of most surrounding countries. Dutch motorists abroad notice this often enough. They feel a certain patriotic pride when they drive on their own national highways, even though they raise a row as often as they are held up by traffic congestion.

The Netherlands lies totally within the triangle that forms the economic center of the European Economic Community, which is delineated by the lines Le Havre, Straatsburg, Hamburg and the coast. Within this triangle there is another triangle, which forms the nucleus of heavy industry. It includes the Ruhr region, the Belgium-North France area and Lotharingen. In this triangle, 90% of EEC coal is mined, and 70-80% of EEC steel is produced. In all three of these industrial areas, more than half of the population works in only three branches of industry: mining, metals and chemicals. These sectors are all strongly dependent on transport facilities to bring in ores and raw materials, and to carry away finished products.

Transport from the second triangle has been traditionally and specifically directed at The Netherlands. Three great rivers flow through this triangle, all three of which empty into the sea on Netherlands territory: the Rhine, the Maas and the Schelde rivers. In the deltas of these rivers, three great sea harbors arose: Amsterdam, Rotterdam and Antwerp. Thus The Netherlands is situated in the focal point of economically extremely important heavy EEC transport.

The situation is reflected in related statistics. No less than nine percent of Netherlands national income stems from the transport sector, and of this, more than six percent is booked by export transport services. In 1965 the $972,000 trade balance deficit was covered by $720,000 from these services. Calculated per ton/kilometer, international transport accounts for 70% of inland shipping. Even the Netherlands Railways, which cannot carry goods beyond the border but must transfer it to a foreign associated line, gets almost half of its total transport from the international sector. In The Netherlands, the freight truck, a typical short distance carrier primarily, still handles about 30% international freight. (See Knickerbocker International, April 1968: Dutch-German Transport Fight Is On)

Almost 30% of the total Netherlands transport production comes from the harbor area of Rotterdam. Amsterdam and the ports of Zeeland also have important transport production; Amsterdam much more of course, since the great international airport of Schiphol is in the vicinity of the Dutch capital. All

these centers of international transport can only function at maximum efficiency if the flow of goods to and from these places can take place smoothly. Herein lies a problem which is worrying Netherlands transport economists: though there are many good roads in The Netherlands, there are too few high-quality continuous connections with the industrial centers of Western Europe. The connection with the Ruhr region is excellent, but the routes to Hamburg, Antwerp, Luxembourg, Lotharingen and the Belgian coal district reveal serious handicaps. Schiphol Airport is completely up-to-date, but the connecting road systems will only be finished a few years from now. An excellent belt highway is now being constructed around Rotterdam, the world's largest harbor, but one wonders whether the connections with other roads will guarantee a sufficiently rapid through-flow of traffic.

Throughout The Netherlands one sees road construction work going on, either building new roads or improving existing ones. What is still lacking, according to one insider, is precise and comprehensive planning. "Sometimes I have the strange feeling that they are just busy jumping from pillar to post," a road construction man told us. "For instance, somewhere a fine four-lane highway is being built, but further on, on the same road, a completely obsolete narrow bridge is left untouched, so the capacity of the road is not enlarged."

### IMPORTANT PRESSURE GROUP

Though less scientific in its language, this opinion is the same as that which is continuously being emphasized by Stichting Weg (Road Association), which repeatedly stresses the necessity of more planning and coordination. With the vigorous support of the business world, the Association was founded a few years ago in order to (we quote the statutes) "promote such managerial, financial and organizational measures, to be taken within the shortest possible period, which will solve traffic and transport problems in order to ensure the free development of economic, work and recreation facilities." The Road Association has since acquired a certain fame for its series of high level publications and meetings.

Such a well-equipped pressure group supporting road construction is needed. The Rotterdam sociologist, Prof. Dr. P. J. A. ter Hoeven is well known for his theory that road construction must remain a source of concern in a democracy. Road building serves everyone's interest and therefore no one's interest in particular. Except for a small group of road builders, it is of primary importance to no one, and of secondary importance to all. Nobody therefore exerts sufficiently strong political pressure on government policy to promote road building. Consequently, it all too easily becomes the last item on the government budget.

There is another reason why the Government's financial planning for road construction tends to fall short. The Road Association has pointed this out in its publications. In the footsteps of John Maynard Keyes, road construction is regarded as a useful instrument of economic policy. By giving orders

16

KNICKERBOCKER INTERNATIONAL

vided by special lamps. Bronze tools only were used. Once the ship was secure in drydock, the ship's pumps began pumping out the contaminated cargo to the API separator of the NDSM tank cleaning station. Later the cargo was pumped directly into tank barges. Repairs, requiring at least 400 tons of steel, are also being carried out by NDSM.

The "Rode Zee" (9000 ipk), L. Smit & Co's Internationale Sleepdienst N.V. newest salvage tug vessel was recently launched at the dock of the Arnhemse Scheepsbouw Maatschappij. With the scale enlargement of sea-going vessels, and the construction of ever more drilling islands, the demand for bigger and more powerful tugs has increased. As a result of this development, a number of smaller L. Smit & Co. tugs are being equipped with new engines of 3000 ipk, and gradually the tugs with a capacity of 2000 ipk will be replaced by bigger and stronger units. When the "Rode Zee" is commissioned in August 1968, the L. Smit & Co's tug fleet will consist of 21 units: three of 9000 ipk, two of 4500 ipk, four of 4000 ipk, three of 3000 ipk, four of 2000 ipk and five of 1350 ipk.

The Middle East crisis and the sterling devaluation were the main factors which accounted for a definite decline in results of Ned Lloyd Lijnen, an operating company in which Stoomboot Maatschappij "Nederland" (SMN) and Koninklijke Rotterdamsche Lloyd have combined their shipping interests. The continued rise in costs and growing competition were also influential. SMN's 1967 operating profit dropped to $7 million from $8 million, with 1967 consolidated net profit at $1.8 ($1.5) million. The 9% dividend will be repeated. Koninklijke Lloyd's operating profit last year declined to $6.14 million from $7.3 million, with net profit unchanged at $1.3 million. A 12% dividend was maintained.

The first of its kind to be built in The Netherlands and suitable for worldwide operations, a derrick barge for the offshore assembly of drilling construction will be built by the Dutch yard Van der Giessen de Noord by the U.S. Sante Fé Drilling Company. The order is valued at $7 million. The barge, with accommodations for 100 workers, will be delivered at the end of this year. The crane, with a revolving capacity of about 450 tons and a static capacity of 725 tons, will be supplied by the Gusto yard of Schiedam.

## AVIATION

A major expansion of passenger facilities at John F. Kennedy International Airport has been carried out by KLM Royal Dutch Airlines in preparation for the use of high capacity aircraft of the future. This is the first phase of a plan

to double KLM facilities at the airport. The expansion will facilitate large-scale passenger check-in and baggage handling, which will be brought about by the introduction of simultaneous departures of Douglas Stretch DC-8 aircraft, and by the eventual use of Boeing 747 high capacity planes. For the present, passenger check-in stations will be increased from 15 to 24, the baggage handling area will be doubled, and second floor waiting room area will be increased substantially. Elevators now leading to upper floor will be replaced by a double bank of escalators to the second, and a third escalator to the lounge areas on the upper floor. The next phase of the project will be carried out in 1971, when KLM acquires additional terminal space.

The Australian airline Trans-Australia Airlines has again placed an order with the Royal Netherlands Aircraft Factories Fokker of Amsterdam, this time for four F.27 Friendships. Previous to this order, the Australian line had purchased twelve Friendships. The aircraft ordered are of the quick-change type, which can be rapidly converted from passenger to freight carriers and vice-versa. Each is worth more than one million dollars. The latest order brings the number of Friendships sold to 465. The American aircraft factory Boeing has placed orders with Fokker to supply 100 installations for the triple-engined passenger jet Boeing 727. The order is worth about $550,000.

## UPWARD TRENDS IN STEEL

(continued from page 12)

The annual capacity of this steel concern, which mainly manufactures for other parties, is currently being expanded to between 500,000 and 600,000 tons. Half of the firm's production is exported. At the end of 1967 capacity was about 300,000 tons but it was not completely used. In 1968 a capacity of about 400,000 tons will be achieved but actual production will be about 350,000 tons. Because of its comparatively small production, the Nederlandsche Kabelfabrieken is able to satisfy special consumers' specifications. This puts the company in a strong competitive position. The Company's vast investments in the steelworks, amounting to some 70 to 80 million dollars through 1967, were made at a time when the trend for steel was downward. Earning power on this part of its invested capital was therefore reduced substantially. The steel market in Western Europe has meanwhile improved considerably and as a result the higher production of the steel plant of the Nederlandsche Kabelfabrieken starts at a very auspicious moment.

Profits of the Nederlandsche Kabelfa-

brieken decreased 20% in 1967, mainly because of a general hesitation to place orders in the first half of the year. But particularly during the last quarter of 1967 there was a pronounced recovery which continued during the first months of 1968. Prospects for a higher use of production facilities in the cable factories and also in the steelplants are bright. This will result in a rather considerable improvement in profits. Investments will again be relatively high but they will remain under the level of depreciation, thus improving the company's already ample liquid position. Higher profits may possibly lead to a higher dividend. (1967 dividend: 16%).

### HOOGOVENS

<table><thead><tr><th></th><th>1965</th><th>1966</th><th>1967</th></tr></thead><tbody><tr><td>Capital and reserves (x $mill.)</td><td>400</td><td>392</td><td>416</td></tr><tr><td>Sales (x $mill.)</td><td>291</td><td>312</td><td>331</td></tr><tr><td>Total employees</td><td>15,980</td><td>16,450</td><td>16,710</td></tr></tbody></table>

### NED. KABELFABRIEKEN

<table><thead><tr><th></th><th>118</th><th>128</th><th>136</th></tr></thead><tbody><tr><td>Capital and reserves (x $mill.)</td><td>118</td><td>128</td><td>136</td></tr><tr><td>Sales (x $mill.)</td><td>180</td><td>196</td><td>190</td></tr><tr><td>Total employees</td><td>11,175</td><td>11,226</td><td>10,694</td></tr></tbody></table>

## EUROPE-U.S. RELATIONS

(continued from page 15)

This in no way implies that we should throw the whole burden again on the United States and then sit back and enjoy it. On the contrary. It would be unrealistic to think that we could ask this reassertion of American leadership without playing our part to a greater extent than we have done till now. What I want to say, however, is that I do believe in the absolute necessity of an integrating and structured Atlantic alliance and I do not see this happening without the strong leadership (which is something entirely different from hegemony) of the United States. Not because it is fair, not even because it is always agreeable all the time, but just because there is no substitute. Attractive concepts cannot replace power nor policy. A strong and leading America and European countries which understand that they should play their part, also in their continuing struggle for unification, constitute the only hope for survival of our alliance, adjusted to an evolving world but as necessary as at any time since 1945.

Professor Dr. Ernst Hans van der Beugel is Professor of International Cooperation at Leyden University. He is a former Netherlands State Secretary of Foreign Affairs, former President of KLM Royal Dutch Airlines, and he is a director of many Netherlands and international business concerns such as S. G. Warburg & Co., Ltd.; Koninklijke Hoogovens; Algemene Bank Nederland; Nationale Nederlanden, and Merck Sharp & Dohme Europa.

28

KNICKERBOCKER INTERNATIONAL

NEW ROYAL DUTCH AIRLINES ADMINISTRATIVE COMPLEX

Preliminary work is now in progress on the construction of a new head office for KLM in Amstelveen, a short distance from Schiphol Airport. A scale model is shown above. The project comprises a main building, built in the shape of a star with three eight-storey wings 200 feet long and 95 feet high, plus a separate computer center to house the automation, telephone, sales and space control departments. The new KLM complex was designed by the R. H. Fledderus firm of architects in Rotterdam, and construction will be carried out by two Rotterdam contracting firms. The main building, which will accommodate 850 employees, is intended for KLM management and staff. The computer center, shown at the right, measuring 200 feet square, is three storeys high and has upward expansion possibilities. This center, where 450 people will work, is expected to be in use by the middle of September 1969.

ordered for the transport of gases under pressure and ammonia, and the company's London storage area will be expanded. Van Ommeren management attributes its positive 1967 results — despite troubled and uncertain international conditions — to three factors: its seagoing ships earned $1.4 million more than the previous year; interest charges declined by $360,000, and taxes were one million dollars less, at approximately $3 million.

Returning after a three week business trip abroad, which included a visit to Japan, shipbuilder C. Verolme said his concern will cooperate with Japanese shipyards by exchanging know-how, sending engineers to visit each other's yards and by acting as a service station for ships built in Japan. At the same time, ships built by Verolme can be serviced in Japanese yards.

British Railways recently opened a container service between Harwich and Rotterdam with three sailings in both directions weekly. The vessels of British Railways are equipped for the transport of containers of 20, 30 and 40 feet and standard pallets. In Rotterdam, they will be handled at the European Container Terminal in the Prinses Margriet-haven.

At the Marine Mining Division of the Industriele Handelscombinatie Holland in Amsterdam, a dozen draughtsmen and engineers are busily engaged in designing a vessel equipped to mine

manganese at sea depths varying from 197 to 658 feet. One year from now, it is anticipated, the project will be ready to be carried out, involving a sum between $14 and $28 million. Investigations have shown that there are rich mineral deposits on the bottom of the Pacific Ocean, including manganese nodules five to ten centimeters in diameter, as well as nodules of nickel and copper. During exploratory studies, pieces of ore have been scooped up in a basket dragged over the sea bottom.

The complex operation of cleaning the tanks of the Norwegian tanker "Tank Countess", measuring 58,350 dwt, which sustained heavy damage when it struck rock off the Norwegian coast, was recently successfully completed by the Netherlands Dock and Shipbuilding Company (NDSM) of Amsterdam. When the giant tanker went into dry dock, there were still some 10,000 tons of cargo oil in the ship, as well as 20,000 tons of damage water and water ballast (to correct the list). Extensive safety measures had to be taken. To prevent the formation of an explosive gas-air mixture, nitrogen had been blown into the damaged tanks before the ship left Norwegian waters, and more was added during the final discharging. Another precaution that was taken was covering the oil in the tanks with a thick layer of foam, preventing gas formation to a high degree. Electricity was cut off, which meant crane assistance was not available, and light was pro-

AUGUST 1968

INTERNATIO
GROUP

OLD ESTABLISHED -
MODERN MANAGEMENT

Activities:

INTERNATIONAL TRADE IN
PRODUCE AND RAW MATERIALS

TRADE IN SEMI-MANUFACTURED
AND MANUFACTURED GOODS

INSTALLATION

INDUSTRIAL PRODUCTION

INSURANCE

INTERNATIO

OPERATIONAL UNITS

THE NETHERLANDS
BELGIUM/WESTERN GERMANY
FRANCE/GREAT BRITAIN
U.S.A./SOUTH AFRICA
AUSTRALIA/HONG KONG

BOARD OF MANAGEMENT
OF THE GROUP:

29, WESTERSTRAAT, ROTTERDAM-2

27

U.S.A.

CAMBRIDGE (Maa.) 05138

Harvard University,
6 Divinity Avenue,

Prof.Dr.Henry A.Kissinger,

All the best,

chat.

New York in the beginning of January and that we can have a long
I hope that you have received my January schedule in
challenge and strain with which you will be confronted.

My thoughts are very much with you and with the tremendous
as appeared in practically every serious newspaper in Europe.

have this time done their job and have sent to you what has
inflated and mostly highly misleading information services
I hope that the United States embassies with their
assumption.

in the European newspapers as was the case with your
appointment has caused such a flood of favourable comments
that to let you know that in my memory never an

My dear Henry,

TEF 030-112867
2MIDSWATER 1

DEN HAVG. december 13, 1968

DEC 18 1968 [L]

ERNST HANS VAN DER BEUGEL

## Biographical Information

Educ.: University of Amsterdam

Government service (Netherlands) 1945-60

Director, Bureau of the Marshall Plan, Ministry of Foreign Affairs
1947

Director General Economic and Military Aid Programme, 1952

Secretary of State for Foreign Affairs, 1957-58

Ambassador and Special Consultant to the Minister of Foreign Affairs, 1959

Deputy President, KLM Royal Dutch Airlines 1960-61

President, KLM Royal Dutch Airlines 1961

Grand Cross of the Oak Crown (Luxembourg)

Grand Cross of the Order of Leopold II (Belgium)

Knight Commander of the Order of St. Michael and St. George (U.K.)

Grand Officer of Dannebrog (Denmark)

Commander, Legion d'Honneur (France)

Knight Netherlands Lion, Officer, Oranje Nassau