641.0031/64: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Bingham)
234. Your 323, June 25, and 326, June 26. I am disappointed that the British Government appears to have decided to defer the statement regarding their general aims and objectives in the field of commercial policy.
Will you seek an early and suitable opportunity to resume discussion of this matter with the members of the Cabinet with whom you have [Page 673] been talking, and leave with them informally the following response to the messages conveyed to me through you:
“Amidst the difficulties of opposition, at home and abroad, to the effort to bring about a lessening of trade restrictions, there has been nothing more reassuring than the word received that the British Government would be glad to reaffirm at an early and suitable opportunity those principles outlined in its recent memorandum as the permanent bases of British commercial policy. That the British Government now appears to have decided to defer this statement is a disappointment of corresponding magnitude.
I believe this Government has a correct understanding of the immediate conditions and considerations which might seem to make postponement of the declaration advisable, but I do not believe that it is to the main interest of any of the great trading countries that these considerations should be given dominant weight. The same conditions and considerations in one form or another are, I believe, also confronting us here.
I know that the type of trade arrangement being negotiated between countries having controlled and completely conditioned exchange and trade systems is operating to displace and handicap the trade and investment interests of other countries like Great Britain and the United States. The permanent entrenchment of these arrangements will mean the permanent stagnation of international trade and change its character to one determined by bitter struggle. If this is to be avoided it is essential that the governments of those countries which desire that trade be permitted again to flourish along lines of economic advantage should act vigorously and promptly to convince the whole world that this is their definite ultimate objective.
If, among the other important trading nations, Great Britain hesitates and defers action, its attitude would be construed to be either that of indifference or resignation, or even indefinite or permanent participation in the new methods of trade arrangements; it will be thought that it too has renounced the hope of bringing back international trade to world-wide dimensions and to economic routes.
If present tendencies continue, the Governments of the smaller countries which feel themselves completely dependent upon the willingness of the larger countries to purchase their goods will reach the conclusion that they have no alternative except to build their trade policies along narrow lines. In still other countries which are handicapped by severe shortage of exchange and by external obligations, the effort to shape their relations with the outside world in such a way as to permit them to trade freely and to deal with outside countries on conditions of equality and economic advantage will lapse; in fact countries in this position having difficulty will necessarily conclude that they are being forced into the strictly bilateral and conditioned trade arrangement by the larger trading and creditor countries, and in their turn will expand their initiative in the field of special agreements where and as they can.
I know the British Government joins this Government in the view that under these circumstances the trade system of the world will become a chaos of special accords marked by no common principle, and eternally and constantly disturbed by the competitive struggle [Page 674] between governments. If this becomes the situation, international trade will become primarily a form of international struggle for power and advantage and lose both its unifying and beneficial effects. The inevitable result will be further movement by all countries toward commercial anarchy.
In the face of this possibility prompt action seems to me urgent, although in taking such prompt action governments may expose themselves to minor immediate disadvantages and difficulties. This Government through its trade agreement program and declarations of policy is endeavoring both to improve the underlying conditions and difficulties which have fostered restrictive trade arrangements, and to encourage other countries in a calculation that their best chance of ultimately overcoming their difficulties is under an order where trade can move free from excessive or unreasonable restrictions. An independent declaration by the British Government such as was summarized in the British memorandum would greatly contribute to this end. It would mean that statesmen were planning and preparing further to overcome the causes of maladjustment in international economic relations and were building for the future a peaceful international economic world, and not merely fighting to maintain limited immediate interests. If in this matter the purposes and desires of countries like Great Britain and the United States are made clear and are firmly sustained, then the responsibility for directing trade and economic relations along less desirable lines will rest squarely on the government whose operations check the effort. The argument from necessity which is so prevalent at the present moment will lose its force. Countries that are unwilling to participate in the more freely operating trade arrangements can then with greater certainty and justice be excluded from the benefit.
In this matter the time appears to have arrived when the great trading democracies must either take a courageous lead in the fight to restore conditions of sane and peaceful trade, or themselves be drawn into a maelstrom of conflicting and competitive agreements. The issue is before the government of each of these democracies. Only my sense of its importance leads me to venture to again put these thoughts and considerations before the British Government. Singlehanded the United States Government may not be able to carry forward to successful fruition a program of vital concern to all countries; but if other great countries move simultaneously in a parallel direction, the likelihood for success will be greatly augmented.”