550.AA1/24

Memorandum by the Economic Adviser ( Feis ) to the Secretary of State

Mr. Secretary: Apropos of this story,15 I think it quite likely that James is right in viewing Van Zeeland’s visit16 (or rather the method of announcing that visit) as indicating that there have been discussions between Van Zeeland and European countries at which the view was again expressed that if the American Government could be brought to take the lead in convoking an international economic conference now, it would find itself taking responsibilities in the European situation. This danger is only one of the reasons why it would be unwise for us to take the responsibility of convoking, or even urging an international conference.

Another reason is that I judge it to be quite impossible to work out a program which could form a basis for possible international conference action. We failed to do so in 1933.17 While during the intervening years some considerable progress has been made in correcting underlying economic conditions, and agreement is now more possible on some economic and monetary subjects between pairs of countries or groups of countries, on the other hand, the task of any conference would be greater than in 1933 because of the greater political complications of the present day. In any conference at which major economic, financial and monetary rearrangements were considered, I believe it inevitable that questions of political relationship would immediately present themselves and probably also questions of armament.

We can and must continue the advocacy of a program of international economic cooperation. We can conduct bilateral negotiations for commercial treaties to which we are a party. We can urge other countries likewise to sign agreements lessening trade restrictions. We can strive to bring about a lessening of preferences, discriminations and exchange controls. We can remain a party to agreements which have monetary stabilization and cooperation as their objective, and strive to widen the range of these agreements. All these things we can and should do. But I believe this whole effort would only be confused and set back now if the attempt was made to deal with these matters at a large formal international conference.

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It may well be that by the use of all the methods recited above the countries of Europe can, in a succession of numerous steps, gradually so lessen both economic and political tensions among themselves that the time will come when a program for a conference can be formulated with hopes of success; that time has not yet arrived.

One of our great aims in the advancement of our economic program is that by the adjustment of economic relations we will improve the atmosphere for political adjustments, gradually induce countries to forego political policies which frustrate economic cooperation, and bring about an agreement on armament limitation. The carrying forward of this conceptual task in practice requires the greatest study of each successive step, because it may be that some particular step at some particular time might actually merely stimulate armament rivalry by furnishing the means for competitive armament effort, rather than have the contrary result. I find it very difficult to appraise the real meaning of Mr. Schacht regarding the German wish to modify their policy towards economic cooperation (and Hitler’s reported interview with Lansbury). It conceivably might mean that Germany would be willing to enter into arrangements whereby along with a lowering of trade restrictions there was an armament agreement. If that should be the case, and Germany should have any disposition in that direction, I do not know whether Great Britain at the present time would be willing to suspend or limit its armaments program. Or, and this is more likely, these German gestures may be merely a move made with the hope of facilitating the course of German rearmament, and Germany would have no interest in an accompanying armaments accord. Whatever the fact and purpose may be, I certainly think that it is best to permit the European Governments, by direct conversations between themselves, and possibly through Van Zeeland, to sound out each others purposes and intentions rather than to have the American Government make any leading move at this moment, such as convoking a conference.

We can, of course, proceed with all vigor to urge upon all European Governments that they reach agreements between themselves on this whole field of economic, monetary and political relations on broad principles of the type which we have been advocating.

H[erbert] F[eis]
  1. Article entitled “The Voyage of Van Zeeland”, by Edwin L. James, in the New York Times, April 18, 1937.
  2. Paul van Zeeland, Belgian Prime Minister; see pp. 671 ff.
  3. Refers presumably to the Economic and Monetary Conference at London, June 12–July 27, 1933; see Foreign Relations, 1933, vol. i, pp. 452 ff.