500.C1112/121

The American Member of the Raw Materials Committee ( Grady ) to the Secretary of State

My Dear Mr. Secretary: Though I reported verbally to you on the meeting of the Raw Materials Committee in Geneva and I did likewise to the other interested members of the Department, I thought it might be well to give a brief written report on this first session of the Committee. A report of my remarks will be received by the Department from Gilbert if it has not already come.28 I would suggest attaching that report to this letter.

As you were advised, Rist was unable to attend although he was expected from day to day. Stucki was made Chairman and Leo-Gérard, the Belgian, Vice-chairman. The Committee’s composition naturally determined the trend of the discussion. Leith-Ross was the only active representative for the position of the “have” countries and Rose, the Pole, the only active representative for the case of the “have-nots”. Had Rist been there, I take it he would have joined Leith-Ross in defending the colonial position, though the colonial question as such was ruled out under the terms of reference, and had Italy and Germany been represented, there would have been a more militant presentation of the opposing point of view. The Japanese representative (Shudo) was little more than perfunctory in his presentation of the Japanese position which may be regarded as similar to that of Italy and Germany.

The raw material exporting countries, if one can classify countries in this way, because most countries are both buyers and sellers, were in large majority. The countries having neither a definite raw material import or export position represented on the Committee were Switzerland, Czechoslovakia, and Sweden. The United States, as I pointed out, is interested in both sides of this question for it exports and imports raw materials in large volume. It seemed to be the consensus of opinion that the question before the Committee if regarded in purely economic terms was largely one of commercial policy. I think there would be little disagreement with this point of view even by the complaining countries if commercial policy is used in its [Page 814] broadest sense; that is to include all factors bearing on economic relations between countries. It should include not only the general principles upon which business is done across national boundaries but all the methods and devices which governments are using in the interest of nationalistic objectives. In other words, if the “have” countries are prepared to have their own efforts to construct closed areas examined as well as the efforts of the “have not” countries, that is one thing; but if the “have” countries simply wish the “have-nots” to give up their exchange and other controls and have their bilateral balancing mechanisms discarded while the “have” countries maintain their empires and zones of interest, that is another.

In my remarks I stressed the necessity of a comprehensive and sympathetic study of all phases of this question. To me a German closed area and a British Empire closed area are different simply in degree, and the instruments used to effect the German and British purpose are of secondary importance. Despite the fact that the colonial question is not formally before our Committee, it is certainly there by implication. Unless the Committee comes to grips with the basic question of discrimination versus non-discrimination in world trade and world economic relations, it will have failed of its purpose.

I am not certain how far the British are prepared to go in supporting the kind of study and report which alone will reflect good faith on the part of the Raw Materials Committee. Leith-Ross gave no indications publicly of endeavoring to predetermine the Committee’s conclusions, but I am not sure that of the British may not seek to have issued a report which will merely answer the superficial contentions regarding the distribution and accessibility of raw materials rather than one addressed to the real basis of complaint of the so-called “deprived” nations. The next meeting of the Committee will pretty well determine this question. As you perhaps know, the date of the Committee has been moved up from June 21 to June 16.

Sincerely yours,

Henry F. Grady
  1. Report not printed, but see telegram No. 94, supra.