550.S1/710: Telegram
The Chargé in Great Britain (Atherton) to the Secretary of State
[Received May 3—5:11 p.m.]
97. From Norman Davis. In spite of the apparent progress made in Washington towards curbing economic nationalism and paving the way for success of the Economic Conference, which is highly applauded, strong doubts are expressed here as to the wisdom of abandoning the trend of England’s policies these last months by which she has gained substantial benefit towards overcoming the depression, for the more ideal but less probably realizable program evolved in Washington during MacDonald’s visit. If the Prime Minister is not able to curb this tendency on his return home it will tend to nullify success. One may note that while the Prime Minister was in Washington discussing measures to remove harmful restrictions to trade the Government here has been moving rapidly in the opposite direction by the conclusion of trade agreements containing quota and preferential clauses.
While it is generally admitted that the program outlined in the communiqué issued by the President and MacDonald on April 2683 would be beneficial and successful if strongly supported by both Governments, strong doubt exists as to whether this program can be made realizable in an appreciable time. In other words, MacDonald will have to stem the tide which has been running during his absence and to persuade Parliament that Great Britain as a result of the Washington conversations will be best served in international matters by immediate cooperation with the United States in preparation for a successful World Economic Conference even though this involves subordination of some of her own economic problems for the moment. The opponents of MacDonald are making a vicious use of the reported failure of the United States to uphold the gold contract on United States securities, and they are also arguing there should not be any economic truce without a debt truce, and in anticipation of possible failure of the Economic Conference they are, of course, trying to put the blame on us. They further argue since the United States cannot compel cooperation from England without endangering its economic life, which the United States is not prepared [Page 587] to do, that England should not jeopardize her present favorable position without those sureties she has consistently demanded.
Nevertheless in the best informed circles it is felt that MacDonald’s prestige with the public is such that he will be able to force his own views. He is to make a direct appeal to the country by radio on Friday night.84 I am hopeful he will get the Cabinet to agree at once to the tariff truce so that we may get that settled. I am therefore remaining here to see him on that as well as disarmament. [Davis.]