840.48/2604

The British Chargé ( Lindsay ) to the Secretary of State

No. 67

Sir: With reference to previous correspondence on the subject of the relief of distress in Central Europe His Majesty’s Government understand that certain proposals which were discussed in Paris between Mr. Rathbone and Mr. Blackett99 have been transmitted to Washington by telegraph. I have received a telegram from my Government informing me that His Majesty’s Treasury feel it necessary to formulate the following reservations in regard to those proposals, and that British participation in relief should be on the following basis.

The grant of any credit should be coupled with the requirement that the States benefiting should cooperate with one another to remove economic barriers, and in particular that any credits to be granted to Poland should be subject to the execution by that country of its contracts with Austria, It is hoped that American credits will be granted only on this general condition.

His Majesty’s Treasury further consider that in order to secure a reasonable probability of a comprehensive scheme for the relief of Austria and Poland, British participation should be contingent on the cooperation of the Allies, for instance, France and Italy, and of the principal neutral States including Holland, Spain, and the Argentine Republic. They would in these conditions agree to a contribution by His Majesty’s Government of a sum not exceeding one half of the sum contributed by the United States Government to a total not exceeding £10,000,000 in all. Application of the British contribution should be governed by the same conditions as apply to the American credits. If these are restricted to the purchase of American products, British credits similarly should be restricted to the purchase of British products and each country should supply freight for its own goods at market rates. British products can only be supplied where there is a surplus available for export.

As it is contrary to the policy of His Majesty’s Government to further increase their indebtedness in America and in view of the exchange situation, my Government can enter into no arrangements which could involve them in further dollar obligations.

I have [etc]

R. C. Lindsay
  1. Controller of Finance, British Treasury.