561.311F1/142: Telegram
The Acting Secretary of State to the Chairman of the American Delegation to the Monetary and Economic Conference ( Hull )
112. For Morgenthau from Wallace. In the event that Canada and Argentina should be willing to join us in an unconditional acreage [Page 810] reduction in plantings for 1934 harvest but Australia would be unwilling, we could agree to such a plan on condition that our acreage reduction would not apply to Washington, Oregon, and Idaho. Since these States produce approximately 10 percent, of our production, we would be willing to make a 17 percent, acreage reduction in the rest of the country against a 15 percent, reduction in Canada and Argentina.
Approximately 60 percent, of the wheat produced in the Pacific northwest is exported, almost entirely to the Orient. If Australia will not agree to acreage reduction, we feel that we should not reduce our acreage of competing wheats, but should continue to hold our share of the Oriental markets. The plan suggested would enable us to do this and still cooperate in reducing the surplus pressing on European markets.
Perhaps Canada would prefer to have same system apply internally, with no acreage reduction in British Columbia.
There is already ample surplus wheat in the Pacific northwest; in the event that Australia does not enter the reduction agreement, we could provide especial financing to assist in the export of that soft wheat to the Orient, and so reduce our surpluses of that type in spite of continued Australian competition.
Use these suggestions so far as you deem advisable to help bring Australia into the reduction agreement. [Wallace.]