Foreign Relations of the United States, Diplomatic Papers, 1933, General, Volume I

550.S1/768: Telegram

The Chargé in Great Britain ( Atherton ) to the Secretary of State

London , May 12, 1933—11 p.m.
[Received May 12—10:15 p.m.]

122. From Norman Davis. Referring to my telegram 121, May 12, 9 p.m., Organizing Committee discussed for over 3 hours draft of tariff truce, the situation being complicated by the fact that the instructions received by several governments were incomplete. There was first a long informal discussion off the record as to the position of the various governments. It soon developed that all the governments were in accord with the general principle and after protracted negotiations it was agreed that the various reservations and explanations should all be included in the procès-verbal and the text of the resolution¹⁴ left unchanged.

A formal meeting of the Organizing Committee¹⁵ was then opened by Simon at whose request Major Elliot, the British Minister of Agriculture, explained that the reference to the annotated agenda did not in the opinion of the British Government cover the case of any export subsidy. The French representative then proposed that the reference to the annotated agenda be eliminated from the text and included as a footnote which was unanimously accepted.

In indicating our acceptance of the resolution I made the following statement based on the instructions in your 101, May 9, 7 p.m.

“It is my understanding that in accepting the resolution none of the governments thereby bind themselves in advance to accept the interpretation which any other governments may place upon any reservation which it has made or as regards any changes which any government may make under the reserves contained in the reference to part 1 B, sub-section 2 of the draft annotated agenda of the Preparatory Commission of the Monetary and Economic Conference. The resolution is a declaration of general purpose and intention and it rests with each government to act fairly in accord with its spirit.”

You will note that I made slight textual changes in the instructions you sent to me as I found that many of the other representatives desired to cover the same point and also I wished to embrace within my statement the interpretation of the various reservations introduced by other governments as well as the reference to the annotated agenda. My statement as quoted above was concurred in by the entire Committee.

The French representative then introduced the following interpretations:

1. It should be understood that only those countries which accept today’s agreement will benefit by the advantages which it contains.

2. Since a general tariff stabilization cannot be considered without a corresponding monetary stabilization the application of indispensable measures designed to compensate for monetary disturbances in the import market should not be regarded as being contrary to the terms of accord concluded this day.

3. Finally the application of tariff or fiscal measures arising from laws voted or projects of laws introduced or in the process of introduction should not be regarded as a new initiative contrary to the terms of today’s agreement.”¹⁶

Grandi explained to me privately that he was in a difficult position because he had received from his Government rather incomprehensible instructions which he said had neither head or foot. He explained that this was due to Mussolini’s absence but that he would reach him by telephone and hoped to clear the matter up in the course of the day, hence in the Committee he accepted the draft ad referendum with the statement that his Government approved in principle. Among the reservations which the Italian Government apparently had in mind was one to cover them in the event of discriminatory commercial action by states not bound by the resolution and also a reservation to cover fluctuating currencies. Grandi hoped to be able to eliminate the former of these reservations, and the latter is covered by the French.

Ambassador von Hoesch for Germany explained that Germany had most difficult economic and financial problems to meet and was suffering more than other states from the burden of indebtedness, that new problems were arising and that if the situation of the German people required it because of emergency conditions Germany must reserve the right to take protective action. Every effort was made to induce Von Hoesch to modify the very general and sweeping character of the German reservation but it was clear that he had no discretion under his instructions.

Simon then stated that he proposed to include in the procès-verbal a statement to the following effect:

“If during the currency of this resolution any unforeseen emergency or critical situation arose which materially affected the operation and application of the resolution, then I, as Chairman, would, on the request of a government that was materially and adversely affected, summon the Organizing Committee in order that that Committee should reconsider the situation in the light of the new facts which had arisen.” This was accepted.

Simon explained that in this suggestion he had in mind such an emergency situation in Germany as that referred to by the German Ambassador or a new situation arising as a result of further substantial currency depreciation to which the French representative had alluded.

In connection with the foregoing reservations and interpretations and particularly with the reservation regarding fluctuating currencies I stated that it should be understood the resolution must be carried out in good faith and in the spirit in which it was adopted and that if any state claimed that a situation had arisen which under its interpretation of the resolution called for protective measures the state taking such measures would have the burden of proof to show that its action was justified. Further, Simon in making the suggestion indicated above had in mind that this would tend to force states wishing to make exceptions to call for a meeting of the Organizing Committee and explain and justify their action.

While theoretically the reservations weaken the resolution, as a practical matter it seemed far preferable to force it through even with the reservations rather than spend another week in an endeavor to induce the respective states to modify or withdraw their reservations.

The communiqué issued to the press by the Foreign Office tonight states that the resolution was unanimously approved, then quotes the resolution in full and concludes with the following paragraph:

“Certain explanations and qualifications were included in the procès-verbal. The Chairman was requested to communicate the above resolution to all the other governments participating in the World Conference, together with a copy of the procès-verbal, inviting them to adhere to its terms without delay.”

• [Davis.]
• Atherton

14. Infra.
15. The proceedings of this meeting are recorded in League of Nations, Council Committee for the Organisation of the Monetary and Economic Conference, Minutes of the Meeting (C. O. C./Conf.ME/P. V. 7 (1), Annex to C. 328.1933.11).
16. For expanded and final form of French reservation, see letter of May 23, 1933, from Mr. Davis, p. 612.