611.4131/355
Memorandum by the Secretary of State
Mr. Chalkley came in to pay his respects before leaving for a two months’ vacation in Great Britain. I stressed the view at every stage of the conversation that the great danger is that a suitable trade agreement between the United States and Great Britain will be delayed until too late. I assembled numerous points in support of this view. I repeatedly expressed disappointment and discouragement at the apparent sagging down of the conversations together with the fear that small groups of embargo-tariff people and their lobbies in the British Empire might be able to obstruct and delay this necessary action on the part of the Dominions, as well as the general British Government, so as to seriously if not hopelessly cripple and indefinitely delay all possibilities of a trade agreement, with the result that there will be more troubles similar to that in the Spanish Mediterranean and between China and Japan with absolutely no remedies for them except to the extent that rearmament might serve as a restraining and restricting factor. I emphasized the view that Great Britain did fine work in preserving world peace with her navy during a period when international trade channels were open and not closed as they are now to a large extent; that it will not be possible for Britain with her navy to prevent 70 million hungry Germans from going on the march when they become sufficiently destitute; nor would it be possible for a rearmed Great Britain to prevent an economic collapse and cave-in, beginning in the German area, within another two years. From these facts and conditions I again and again came back to the point that the great necessity for all possible speed in the direction of the British-American trade agreement and hence of liberalizing the international economic situation could scarcely be exaggerated. I said that in any event this Government would continue to pursue its policy of trade reciprocity and economic restoration on liberal lines and would hold out as long as possible, but that naturally Great Britain and the Dominions must realize that we cannot do this indefinitely while Great Britain moves further and further in the direction of more extreme Empire autarchy; that in my firm opinion an appearance of economic and peace solidarity on the part of Great Britain and the United States beginning some months ago would undoubtedly have had a stabilizing effect both in China and the Spanish Mediterranean; also I sought to emphasize over and over again the view that Japan is bent solely on economic control of the Pacific area and that any pacts or agreements for economic or financial cooperation which she may enter into with Great Britain or the United States, [Page 66] or any other country, are only intended to be temporary and to exist until Japan gathers sufficient economic and financial strength to pursue her single major objective alone, and that the British and American policy on the Pacific cannot recognize this situation too soon and pursue a course that will gradually checkmate this objective on the part of Japan.