611.4131/155d: Telegram

The Secretary of State to the Chargé in the United Kingdom (Atherton)

103. My despatch 1130 of February 13, 1936. I am appending hereto a memorandum I have drawn up on the subject of the general trade policies to which I referred in my conversations with the British Ambassador here on January 22 and February 5, 1936. I will leave to your judgment the propitious moment for bringing this matter again to the attention of the British Government in a manner and at a time when it will receive the study its importance warrants. I am today giving a copy of this memorandum to the British Ambassador as well as a copy of the memorandum which accompanied my instruction No. 1130 transmitting to you memoranda of my two conversations with the British Ambassador here:


Referring to oral conversation between the British Ambassador and myself on two occasions, one in January and the other in February last, relative to the pursuit by important nations, and particularly Great Britain and the United States, of a comprehensive and practical program [Page 648] for international economic rehabilitation, I regret to learn that the British Government construed my proposal, which was in the nature of an inquiry, to embrace minor and other subordinate questions of a controversial nature. This was entirely foreign to my purpose.

The single outstanding question I sought to raise with the British Government was whether that Government could see its way clear to pursue virtually the identical course the United States Government has pursued under the Trade Agreement Act of 1934.21 By this program is meant an announcement to the world by a given government, the British in this instance, that it is high time the drift of the nations further and further toward economic isolation should be halted, and a gradual but definite movement with an adequate program having for its chief objective the restoration of the normal processes of international trade and other normal economic relationships between nations should henceforth be carried forward. This mere announcement by the British Government would be followed by similar announcements by other governments, with the result that the moral effect of a pronouncement so urgent and so sound would inspire confidence in the industrial and business world as it would also quiet much of the high tension in both the economic and political situations. This announcement by the British Government would in no sense imply an obligation immediately to proceed with final steps with respect to a lowering of trade barriers generally, the abandonment of undesirable trade methods and practices deemed necessary for the time being on account of depression conditions, or any lengthy or definite step with respect to exchange stabilization.

The course of the United States Government in the administration of the Trade Agreement Act with the program it comprises best illustrates the one question this Government is undertaking to raise with the British Government, and that question is as stated at the outset, whether the British Government cannot see its way clear to make the world announcement that in its own way but to as full an extent as practicable and consistent with its domestic welfare, it proposes to join in support of the program and the movement for the restoration of the normal processes of international trade and general economic relations between the nations.

It is thus apparent that my references to certain trade methods of the British Government embodying bilateral and clearing practices in harmony with purely economic nationalism were only intended to illustrate my one outstanding proposal to the British Government by showing first that if this course of nationalism is pursued indefinitely [Page 649] it will in the long run be disastrous to all governments pursuing it and to the world as well, and secondly that the pursuit of these nationalistic trade methods by a great country like Great Britain to a large extent prevents other nations like the United States from going forward successfully with the broad program for international economic restoration and fair and friendly trade methods and trade practices between nations, all of which afford the only solid foundation upon which to restore full and stable prosperity and conditions of permanent peace.

  1. 48 Stat. 943.