561.311F1/179: Telegram
The Ambassador in Great Britain (Bingham) to the Secretary of State
[Received 11:20 a.m.]
244. For Wallace from Murphy. Returned to London yesterday from continental trip. Europe has another large wheat crop of excellent quality. My impression is most countries now realize necessity cooperating with exporters and making readjustments their grain policies to maintain prices. About 20 countries will be represented Conference. Preliminary discussions with Canadians, Australians indicate [Page 819] plan outlined our cable June 30 will require considerable modification of tentative figures because crop changes. It now appears import demand probably will not exceed 575,000,000 against 750 then estimated. Since this affects quota figures materially we need new instructions regarding maximum acceptable to the United States, also your estimate probable total disappearance wheat United States this year. Latter figure will have important bearing on any allocation quotas for old crop surplus Canada and United States, which is one difficult problem now facing us. Subsidized exports wheat from France, Germany may also give trouble. However Canadians, Australians prepared to seek an agreement within 2 or 3 days. Ferguson in Canada and Bennett sailing August 26. We have given full notice of August 24 dead-line. Can you suggest a way private or otherwise to help Russia finance surplus carried in storage, otherwise it may be difficult to get them in agreement.
Following draft is proposed by exporters after discussions with certain importers for acceptance by importing countries on Monday.
“The wheat importing countries being desirous of cooperating with the wheat exporting countries
- (1)
- Agree henceforth not to encourage any extension of the area sown to wheat and not to take any governmental measures the effect of which would be to increase the domestic production of wheat;
- (2)
- Agree to adopt every possible measure to increase the consumption of wheat and are prepared to bring about the progressive removal of measures which tend to lower the quality of breadstuffs and thereby decrease the human consumption of wheat;
- (3)
- They agree that a substantial improvement in the price of wheat should have as its consequence a lowering of customs tariffs and are prepared to bring about such adjustment of customs tariffs when the international price of wheat reaches and maintains for a specified period an average price to be fixed. It is understood that the rate of duty necessary to assure remunerative prices may vary for different countries, but will not be sufficiently high to encourage their farmers to expand wheat acreage;
- (4)
- They agree that in order to restore more normal conditions in world trade in wheat the reduction of customs tariffs must be accompanied by modification of the general regime of quantitative restrictions of wheat imports and accept in principle the desirability of such a modification. The exporting countries for their part agree that it may not be possible to make substantial progress in these modifications in 1933–34 unless the crops are unexpectedly poor, but the importing countries are prepared to make effective alterations in 1934–35 if world prices have taken a definitely upward turn from the average price of the first quarter of the calendar year 1933. The objective of these relaxations of the various forms of quantitative restrictions will be to restore a more normal balance between total consumption and imports, and thereby to increase the volume of international [Page 820] trade in wheat. It is understood that this undertaking is consistent with maintaining the home market for domestic wheat grown on an area no greater than at present. It is obvious that fluctuations in the quantity and quality of the harvest resulting from weather conditions may bring wide variations in the ratio of imports to total consumption from season to season.”
- [Murphy]
- Bingham