Papers Relating to the Foreign Relations of the United States, 1931, Volume I
561.311D1/79
The Chairman of the American Delegation (McKelvie) to the Secretary of State
Gentlemen: I am transmitting herewith copy of my report to the Federal Farm Board relative to the World Conference of Wheat-Exporting Nations held in London May 18 to 21 [23].
[Page 643]May I suggest that the American Embassy in France will be very glad to have a copy of this? The Embassy in London did not request it but, since Mr. Cox was secretary to the American delegation, I think they would be glad to have it.
Very truly yours,
Report of the Chairman of the American Delegation (McKelvie) to the Federal Farm Board
The Conference of the Wheat Exporting Countries of the World, called by the Canadian High Commissioner, Mr. Ferguson, was held at Canada House, London, May 18th, 1931. Eleven countries, representing ninety-five per cent of the world exportable surplus of wheat, sent delegates. The resolutions of the Conference are appended.69
The meetings of the Conference were held in camera. The reason for this as expressed by Chairman Ferguson was to develop a full and free discussion. No observers were admitted. Communiqués were given to the press from time to time but these were in no sense significant of the discussions that took place in the committees, or in the plenary sessions of the Conference. Therefore news stories were based in no small part on what the reporters could gather wherever and however possible. Such delegates as were willing to talk gave color to their own views. This inevitably resulted in conclusion arrived at ex-parte. Aside from the formal statement of the Delegation from America, released in conformity with plans agreed upon in Washington, your delegates refrained from talking to the press until the Conference was over. We then sought to clarify our position without reference to what may have been said by other countries in press interviews.
The Delegation from America was in complete harmony as to the course we should pursue. The counsel of Dr. Taylor was invaluable on account of his intimate knowledge of the subject and his experience in other international conferences. So were the services of Dr. Olsen in interpreting the policy of the United States Department of Agriculture regarding acreage readjustment, land utilization and statistical data. Early in the session it devolved upon the writer to take a place on the Committee on Agenda. It was in this committee that many of the more intimate discussions took place, and the resolutions substantially as adopted were written by it. May I suggest as a result of this experience that any such conference in which the United States takes part is fraught with the possibility of serious implications.
[Page 644]The statement of the Federal Farm Board was presented on the second day. It was the only effort made by any country at a clear exposition of the world wheat situation. One was obliged to feel that many of the delegates were bored by it for they had not come to the Conference prepared to take a careful look at the facts. Instead they had plans, mostly impossible, for making their growers feel that the underlying laws of economy could be circumvented. Interest was expressed in that part of our conclusions in which it was said that stabilization supplies will not be “dumped.” This was seized upon and repeatedly “interpreted” to mean that the United States was prepared to enter into a quota agreement. Your delegation permitted no such impression to prevail, though it finally took more than diplomatic language to make it clear that the Federal Farm Board would not be influenced by outside sources in determining its course in stabilization.
To enlarge upon this point: Poland and the Danubian countries have for many months been seeking international agreements based on export quotas. Associated with this plan are other factors of undoubted seriousness, such as preferential markets and international financing. At this time, the countries advocating the quota plan would have been well content with a recognition of the principle; indeed, that was all they proposed. Having gotten that the next steps would have come along in logical form.
The discussions hinged about this throughout the Conference. Russia gave hearty endorsement to it for the reasons (1) they would demand a quota equal to their five-year pre-war average (164,000,000 bushels), (2) they would claim the right to be financed during the period of so-called “orderly marketing,” (3) limited exports by other countries would enable them to sell more wheat for more money, and (4) they would be joined with the United States in a mutual agreement among nations. It is only fair to say that Russia was more frank in stating their position than some other nations that indicated their support of quotas.
In course of the discussions, your representatives called for a statistical exposition of how the quota plan would work: What would be the quantities that each country might export; how would the periods of marketing quotas be determined and by whom; and how would the “pool” be controlled? No effort was made to give the answer. In fact one prominent delegate said that if this information was insisted upon we had as well adjourn. He should have said that to attempt such an agreement would mean prompt dissolution of the Conference for the responsibility for the surplus would then have been fixed and none of the countries except the United States had even recognized this fact, to say nothing of making an effort to rectify it. Apparently [Page 645] they were willing to say to their farmers that they could continue to grow as much wheat as they wish and other countries (principally the United States) would take care of it.
We then asked what authority the delegates had to pledge, or even propose a pledge of their various countries to the quota plan. Perhaps Russia alone could have given an affirmative answer. Several said they had no such authority. This again indicated that it was a recognition of the principle and not the plan that they wanted. In some instances it was a clear case of political face-saving.
Your representative said that we alone had made contributions to the solution of this problem. For months on end the United States had been out of the export market, and as a result of this we had helped every other exporting country. At no time had we dumped our wheat nor would we. This should not be construed to mean that we would continue to “hold the umbrella.” Meanwhile we had urged our growers to reduce acreage and production. We had no intention of abandoning the world market but we hoped to get back to a pre-war export basis. All of this had been done in the interests of our own growers and we asked no sympathy or commendation for it. We did hope other countries would do likewise. Meanwhile they were in a poor position to ask our approval of a policy that was unsound in principle and wholly unworkable, except as it might come about through the organization and cooperation of growers themselves. Governments could not hope to do it.
The Committee then prepared the resolutions wherein substantial recognition was given to principles that are in accord with what the United States Department of Agriculture and the Federal Farm Board have been trying to accomplish.
All in all the Conference may be regarded as having been worth while. Largely speaking each country will have to approach the question in its own way. This is facilitated and expedited by conversations that lay bare the underlying facts. Acreage reduction is coming about in Australia, Argentine and Canada through sheer necessity. It will be hastened by a realization that there is no legerdemain by which such abnormal quantities of wheat can be disposed of at a profit to the grower. It is apparent that Russia is not so happy with her situation, and some of the Balkan States are looking to other crops than wheat. These are encouraging signs.
The proposal to develop a clearing house of information has very good possibilities. Mr. Olsen will serve on the committee that will study this question. It looks to the development of more accurate information regarding acreage, crop conditions, out-turn and unloadings in import markets. Russia’s approval of this proposal should mean that important information needed from that country will now [Page 646] become available, and if it is, one of the most highly speculative elements in the market will have been removed. The form that the clearing house may take remains for the Committee to recommend to the several governments.
The conversations were spirited at times but good feeling prevailed throughout. At the close, Russia was inclined to be critical of the United States and gave out a statement blaming us for what they regarded the failure of the Conference. We made no reply, being content to feel that the failure of Russia to get the commitments she wanted did not signify the failure of the Conference. Rather the reverse was true. We had no favors to ask and could be unprejudiced in our views.