841.5151/557
Memorandum by the Chargé in the United Kingdom (Atherton)8
At the request of the Chancellor of the Exchequer I called at his office in the House of Commons this afternoon. Mr. Chamberlain stated that for some time past he had intended to have a talk with the Ambassador or myself because he was disturbed by indications received lest there develop in Washington a prejudice against British policy and methods, which he would personally deeply deplore and to dissipate which he was quite prepared to do anything he could, for it could not in any way help the general outlook. He asked me if I were conscious of any such attitude on the part of his opposite number in Washington, or the Administration generally, or on the part of the President, and he said that fundamentally in his opinion the differences existing between London and Washington were not differences of viewpoint but differences of method of government. This often caused misunderstanding until it was fully grasped: that, for example, even if an English official had the same viewpoint and aims as a corresponding American official, the Englishman had to bear in mind that the American could never make a binding commitment for the legislative branch of the American Government had to enter into any agreement which the Executive branch might reach. That realization had taken a long time to permeate into all departments but it was now understood.
The Chancellor then referred to the numerous people coming and going who had attempted to explain to him the attitude of the Administration, and said that it was from these people that he had been given the idea of possible misunderstanding arising. I said that for my part I felt that the viewpoints of the two countries in that they stood for peace and liberty and the well-being of the individual were identical. The method of achieving these aims was one to be worked out, and in a measure the progress in working them out depended on an understanding between the personalities involved. Furthermore, there were important matters in which, if the collaboration of the two nations could be achieved, it would mark a forward step for each of the two countries and for the world in general. At the present moment, I said, the most practical proof of any common understanding of world events was how far Great Britain and the United States could exhibit a common purpose in working for the restoration of economic well-being through the stimulation of world trade by the removal of tariff and other barriers to freer commercial intercourse. I then set forth at some length the aims and purposes [Page 538] of America’s commercial policy as explained and practiced by Mr. Hull, and pointed out the way in which British policy had in recent years run more or less counter to American policy, and very carefully detailed the representations which Mr. Hull had made to Sir Ronald Lindsay,9 backed by the representations of this Embassy in recent weeks.
Mr. Chamberlain said that he hoped I realized that such arrangements as the Spanish agreement,10 etc., were in the English viewpoint abnormal—abnormal agreements made in an abnormal time and distasteful to the British Government. I informed him that I had already been advised on those lines, but that I felt that if the case was as strong as that, the British Government could go very far in openly making a strong statement of policy which would show agreement with the United States in a common aim and which would be very constructive in world economic centers.
He said that he understood that Mr. Eden had handed the Ambassador a memorandum11 not long ago and he hoped that Judge Bingham was very satisfied with this. Was that not my impression? I said that my impression was that he was pleased that the memorandum did not close the door but indicated the possibility of working something out. However, I said this memorandum had been transmitted to Secretary Hull and that we had had no indication from him as to his reaction, but we most certainly expected further instructions regarding the matter. Mr. Chamberlain said that he was most anxious to know Mr. Hull’s reaction to it and he assured me that he was waiting to give Mr. Hull’s reply his every consideration.
The Chancellor then expressed appreciation of the information reaching him through the kindness of Mr. Morgenthau,12 containing the views Cochran had obtained on the gold bloc situation, which bore out his own information. He did not feel that the French were at present prepared to devalue, due to internal political reasons; he thought that they would most likely put on restrictions which would be less satisfactory both to Great Britain and to the United States. In any case, whenever the French were prepared to devalue, the British Treasury would be forced to adhere in the given circumstances to its established policy in not predetermining definitely at what point the pound would in this relation be held. He particularly asked me to understand that this was no deviation from their past procedure.
He then asked me if my Government fully understood how the British Equalisation Fund worked, and he said he asked me this because suggestions he had received from Washington indicated the [Page 539] possibility of daily collaboration between the American Treasury and the British Treasury. Without waiting for any reply he then went on to explain that in the operation of the British Equalisation Fund only questions of policy were determined by the Treasury; that the execution of policy was left entirely in the hands of the Bank of England; that the Treasury did not attempt to enter into, much less to determine the day to day transactions which the Bank of England undertook; and that therefore it was impossible, given the nature of these well established arrangements, for the British Treasury to inform the American Treasury of what the day to day transactions of the Bank of England were to be, in spite of all the good will in the world. He seemed most anxious that Washington should fully understand the separation of functions between the British Treasury and the Bank of England, which entailed that any day to day cooperation with America should be through the Federal Reserve, the Bank of England’s opposite number.
He then went on to ask me if I thought this would be understood in Washington, not from the point of view of any British predilections but from the point of view of what was practical in London, and the Chancellor was evidently most anxious that Mr. Morgenthau should have a clear appreciation of the picture from this end. He said it was often difficult for people separated by great distances to understand the internal economic or political motives that predetermined policy, and then he repeated almost verbatim his introductory remarks, emphasizing that the possibility that there might be antagonism between London and Washington was something which he and his colleagues would deeply deplore, and that he hoped that a difference of technique did not necessarily mean an incompatibility of views, and that they were most anxious to work out with us any common purpose and remove any misunderstanding.
- Transmitted to the Department by the Chargé in his despatch No. 2261, June 16; received June 23.↩
- See pp. 629 ff.↩
- Clearing agreement between the United Kingdom and Spain, signed at Madrid, January 6, 1936, League of Nations Treaty Series, vol. cxxvi, p. 283.↩
- See telegram No. 281, May 26, 11 p.m., from the Ambassador in the United Kingdom, p. 663.↩
- Henry Morgenthau, Jr., Secretary of the Treasury.↩