550.S1 Monetary Stabilization/19: Telegram

The Chairman of the American Delegation (Hull) to the Acting Secretary of State

37. For the President from Warburg. I endorse Sprague’s today’s cable to Woodin and for your information should like to add the following. As you know we had quite a struggle to obtain chairmanship of Monetary Commission. Immediately after agreeing to nominate Cox, Bonnet asked for reassurance as to the attitude of the American Government in monetary matters. We told them that we could give no assurance whatsoever except that we would recommend to you the authorization of a declaration such as that embodied in Sprague’s [Page 645] cable. The French were willing to proceed on this assurance realizing that it was perfectly possible that you might not agree with our recommendation. Your decision is therefore in no way prejudiced. In addition to the text of the declaration as cabled by Sprague we have agreed to recommend that you authorize us to agree also to the following statement: “The Governments and banks of issue of the United Kingdom and the United States have stated that the stabilization of their currencies on a gold basis under proper conditions forms the ultimate objective of their policy”. This statement goes no further than what we have said in all our preliminary conversations and goes no further than the Secretary of State’s speech to the Conference. The only reason for treating it separately from the rest of the declaration as cabled by Sprague is that it does not properly fall within the terms of reference of Sprague’s mission and belongs rather to the field of the Economic Conference. We hope that you will authorize this addition to the declaration and that you will approve of the plan as a whole as nothing could give a more auspicious beginning to the meeting of the Monetary Commission under our chairmanship next Monday58 than an announcement of this sort. We have tried to protect your freedom of action to the utmost at the same time giving the assurance that can reasonably be asked of us as leaders in the monetary field to the effect that we are not going to be wilful and unnecessarily violent in our monetary policy. Finally I realize that you are probably flooded with cables like one I received from the Committee of the Nation. We feel that those who think stabilization a mistake do not realize the full significance of the alternative which among other things would be that it would be practically impossible to assume a leading role in attempting [to] bring about a lasting economic peace among the nations. So far we are getting along excellently. We have won our first major tactical victory in getting monetary chairmanship and preliminary meeting this morning indicates good prospect of carrying through our program if we can get over this first hurdle. [Warburg.]

Hull
  1. June 19.