710.G1A/295: Telegram

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

31. For Phillips, personal. Your 44, December 6, noon. The sole purpose of tariff and commercial proposal is as a long-term plan. It contemplates exceptions and reservations reasonably necessary for temporary or for emergency panic relief, tariff and trade barriers. The general aim is to keep alive the permanent policy of reducing existing barriers and liberalizing commercial policy by simultaneous action of nations comprising 75 percent of world commerce when and as such temporary and emergency high tariffs would at all permit. I can so indicate in express terms in my proposal while retaining the fundamental doctrine of moderate tariff reductions and liberal commercial policy. The temporary or emergency rates would rest upon unusual necessity such as may now exist or later arise while general governmental tariff and commercial policy such as is contained in section 2 of the London proposal is our ultimate objective and in my judgment should by all means not be abandoned. So long as extreme high tariff demands generally are acceded to reciprocity bilateral trade agreements, however strongly emphasized, will be restricted to a limited number of commodities as to South America and they will be virtually noncompetitive commodities. Hence the importance of preserving at least the fundamentals of a future permanent policy of simultaneous and substantial tariff reduction by the nations of the world and liberal commercial policy.

I would consider it unfortunate if our Government should not thus keep alive the foregoing broad proposal with the exceptions and reservations mentioned. The alternative would offer a very narrow and limited domestic policy alone with no indication of any other for the future.

I feel constrained to offer this frank opinion which is based upon the assumption that we ultimately expect to reenter foreign trade. If this is not in mind it of course would not be necessary to keep alive any policy for the future.

Please confer and wire immediately.