[Enclosure—Memorandum]
London, December 18,
1933.
I called on the Prime Minister at the House of Commons this afternoon
at 5 o’clock at his request. Mr. MacDonald referred to my visit of
last week, reported in my despatch No. 387, December 16th,73 and read me the draft of a note he was
intending to send to the various “rapporteurs” of the World Economic
Conference,74 seeking suggestions as to future effective work by
this body. He then referred to the intense economic nationalism that
was to be found generally in the world today, and expressed the hope
that the future work of the Economic Conference might in some way be
able to combat this tendency. He then referred briefly to the
unsatisfactory financial situation existing in France and Italy
today, but stated it was impossible to rely on any discussions with
these two nations since it was very difficult to make them live up
to any agreement if it were reached. I was able to gather, partly by
inference, that the Prime Minister also had in mind the negotiations
going on at the present time between England and France for a new
commercial treaty, the conclusion of which, I am informed, may be
expected at an almost immediate date. The Prime Minister asked one
or two questions as to conditions in the United States, and said
that the foreign exchange value of the dollar in relation to the
pound at $5.13 was causing trade losses to British
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manufacturers, who, in turn, were
appealing to their members of Parliament for an expression of
Government policy. The Prime Minister said he realized that with the
meeting of Congress in January fresh considerations must be met by
the Administration, and the British Cabinet were loath at any time
to “consider measures of retaliation”, since any such Government
policy was merely another spoke in the ultimate recovery of
international trade which, he felt very strongly, was the necessary
accompaniment to world recovery.
In the matter of war debts, he said that the token payment of last
week,75 which was not favored by the whole
British Cabinet, had aroused considerable resentment in many
important quarters in England, and this resentment was greater than
had been anticipated, particularly in view of the less generous
attitude of other countries. The Prime Minister then asked as to the
feeling in America regarding the British debt payment, and we
discussed whether the position set forth in the British note of
about a year ago76 was
clearly understood. The Prime Minister went on and said that Senator
McAdoo, when he visited him some time in the autumn, had laid before
him a proposal that England surrender her West Indian possessions to
the United States in return for debt cancellation. Mr. MacDonald
added that any time a Ministry presented such a scheme to Parliament
it would fall over night.
The Prime Minister then outlined British disarmament policy and
objectives almost identically as outlined in the Embassy’s telegram
No. 339, November [December] 16, 5 p.m. He
did add, however, that England today stood solidly by the British
disarmament plan and that any attempt of Hitler to suggest in his
memorandum of December 11th,77 the text of which was forwarded to the
Department in my despatch No. 386, December 16th,78 that a modification of the
plan had been agreed to was entirely erroneous. The Prime Minister
laid stress on the fact that Sir John Simon in his Geneva
discussions had merely stated that under certain circumstances
certain modifications might be considered. The Prime Minister also
laid stress on the fact that if England was unable to reach any
agreement with Germany in the matter of rearmament it would merely
mean that Germany would rearm without regulation. Consequently the
British Government were continuing inquiries and conversations with
the Germans based on Hitler’s memorandum of December 11th but had
not yet discussed the matter with France, especially since the
Chautemps Ministry up to the present moment had been too engrossed
to carry on such conversations. However, during the last few days
Lord Tyrrell had been
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able
to make some headway in Paris and Sir John Simon would be arriving
there the end of this week.
Mr. MacDonald pointed out that it must be realized England stood
squarely by the League. It was evident, he pointed out, that if this
disarmament question were attempted by Germany outside the League
with a series of bi-lateral agreements, none of these agreements
would correspond and what, for instance, would be defensive weapons
in any agreement with France would be offensive weapons with Denmark
and Czechoslovakia. Also a pact of non-aggression with Holland could
not be in any way similar to a pact of non-aggression with Poland.
Therefore, if disarmament was really to have any effective benefit
it must carry through some central agency such as the League. The
Prime Minister referred to M. Avenol’s recent visit here and added
that he could imagine there might be a certain amount of necessary
redrafting of the Articles of the League, not only to win back
League members who had resigned, but also possibly to gain new
converts. In particular, the Prime Minister had in mind the
elimination of a situation whereby the small Powers without
responsibility or military strength could by vote in the League
force military action upon the great armed Powers.
The Prime Minister asked several questions as to business conditions
in the United States, as to Secretary Hull’s immediate plans and
movements, and the possibility of the return of Mr. Norman Davis to
Geneva.
In conclusion, he said he would be glad if I should come to see him
for a purely informal exchange of views once a month, and that he
would make the appropriate arrangements with the Foreign Office that
these meetings would be quite understood as informal and
exploratory.
