550.S1 Monetary Stabilization/66: Telegram
President Roosevelt to the Acting Secretary of State 98
[Received 5:40 a.m.]
18. Please send following to Hull and notify Secretary of the Treasury and Baruch:
“Have received Hull’s 80, of June 30, and Sprague’s 79. In regard to suggested joint declaration I must tell you frankly that I believe the greater part of it relates primarily to functions of private banks and not functions of governments. Other parts of declaration relating to broad governmental policies go so far as to erect probable barriers against our own economic fiscal development. As to paragraph 1 (a) of suggested joint declaration this language assumes that immediate stabilization in international monetary field will create permanent stability. This I gravely doubt because it would still allow a country to continue unbalanced budgets and other financial operations tending to eventually unsound currencies. France is an example.
As to paragraph 1 (b) we must be free if gold or gold and silver are reestablished as international measure of exchange to adopt our own method of stabilizing our own domestic price level in terms of the dollar regardless of foreign exchange rates.
As to paragraph 3 this would be possible only if we are fully free to maintain stable domestic price level as our first consideration. Also it is most advisable to insist on addition of words ‘gold and silver’ to any possible currency reserve.
As to paragraph 4 I do not think this means anything on our part. I know of no appropriate means here to limit exchange speculation by governmental action. I am clear that this is not at the present time at least a government function but is one that could be undertaken only as a private banking function and only if governmental action is not implied or contemplated thereby. In other words, I cannot assent to private action now which might morally obligate our Government now or later to approval of export of gold from the United States.
At this time any fixed formula of stabilization by agreement must necessarily be artificial and speculative. It would be particularly unwise from political and psychological standpoints to permit limitation of our action to be imposed by any other nation than our own. A sufficient interval should be allowed the United States to permit in addition to the plan of economic forces a demonstration of the value of price lifting efforts which we have well in hand. These successful forces will be beneficial to other nations if they join with us toward the same end.
It would be well to reiterate fact that England left gold standard nearly 2 years ago and only now is seeking stabilization. Also that France did not stabilize for 3 years or more. If France seeks to break up Conference just because we decline to accept her dictum we should take the sound position that Economic Conference was initiated [Page 670] and called to discuss and agree on permanent solutions of world economics and not to discuss domestic economic policy of one nation out of the 66 present. When Conference was called its necessity was obvious although problem of stabilization of American dollar was not even in existence.
I have no objection to delegation using the import of this telegram as basis for a statement of American policy.”
- Transmitted to the Chairman of the American delegation as telegram No. 91, July 1, 8 a.m.↩