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

561.311F1/14

Memorandum by the Economic Adviser (Feis)

[Washington,] March 31, 1933.

Memorandum of Meeting on March 29

There were present: the British Ambassador; Mr. Bewley, the Financial Adviser of the British Embassy; Mr. Chalkley, the Commercial Adviser of the British Embassy; the Secretary of State; Mr. Moley,¹ and myself.

After some further general remarks in regard to silver, it was suggested that we consider the idea of an international agreement dealing with wheat. A general interchange of information bearing on the subject took place. It was brought out that wheat might be made the subject of an international restriction agreement more easily than most commodities, by virtue of the fact that only a small part of the total production passed over national frontiers. Attention was called to the fact that even if the United States through its legislative activities restricted American production through a self-sufficient basis, the problem of over-supply and over-computation in the world market would be made. It was pointed out that the increase in production in recent years was almost entirely in Europe and it had been fostered through various forms of extreme tariff production, quotas, and the like. The British representative gave some details regarding the present British wheat subsidy, declaring that it was a very minor factor in the situation because the potential increase in acreage was small.

The problem primarily concerned the four largest wheat exporting countries, Canada, Australia, Argentina, and the United States. It was recognized that the Balkan States were also considerable producers and exporters, and that attention would probably have to be paid to them in any agreement. Russia had intermittently been a very important source of export wheat and might again become so; at the London Conference² Russia had asked for her pre-war place as her allotment.

The British Ambassador said that he believed that his Government would take a relatively compliant attitude towards any plan of international control, even though Great Britain was a large importer of wheat. The British Government could not, of course bind the Dominions.

The Secretary expressed the view, to which everybody gave consent, that the basic way out of the situation could be looked for primarily through an increase in consumption, and by a reduction of tariff barriers which would permit countries now growing wheat under very disadvantageous circumstances to lessen their tariffs on wheat and import wheat because they were able to pay for it by virtue of tariff reductions made by other countries. He emphasized the many important parts of the globe in which wheat consumption was negligible and where an increase of trade and improvement of the standard of living might open up broad new markets for wheat.

This led to a general discussion regarding nationalism and tariffs and the problems they created.

1. Raymond Moley, Assistant Secretary of State, March 6–September 7, 1933.
2. Conference of Wheat Exporting Countries, held at London, May 18–23, 1931; for correspondence concerning participation of the United States in the Conference, see Foreign Relations, 1931, vol. i, pp. 632 ff.