033.4111 Runciman, Walter/12: Telegram

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

45. Tour 53, February 9. For your confidential information and background. In our conversations with Runciman we pointed out emphatically that this Government, those of this hemisphere, and many in Europe are in agreement that action directed toward the lowering of trade restrictions on lines indicated by our reciprocal trade program is a vital element in the peaceful working out of the difficulties now facing the countries of Europe; and that we view the solution of this problem as one in which persistent effort and leadership must be given in a simultaneous handling through discussion of all its elements. Besides the rebuilding of trade there is need of adjustments of some exchange situations preparing the way for long-run stability, debt adjustments, the creation by the countries concerned of reliable political accords as a basis for mutual political trust and security, and general [Page 12] disarmament. Each step in advancing each element of the program must necessarily have to be adjusted to each other step, as nations may develop increasing faith in each other’s peaceful intentions and increasing interest in the possibilities of cooperation. To the program every nation would have to make its contribution and upon the government of every nation rests the responsibility of playing its part. Further, we pointed out that there seems to be no alternative course or program for peaceful settlement and adjustment of the present steady drift of Europe toward narrow trade policies, toward bitterness, strife, and steadily increasing races in armaments and with militarism as the central policy.

We stated that in our view the British Empire has created through some features of its Empire preferences the kind of excessive trade barriers which are comparable with the excessive barriers and restrictions contained in the Smoot-Hawley tariff24 and excessive tariff structures of other nations of the world; that in urging or requiring many nations with which it trades to conclude clearing arrangements, compensation agreements, and discriminatory quota understandings, Great Britain is violating the rule of equality of commercial treatment; that there is a growing feeling in the United States, and elsewhere that Great Britain is moving backward instead of forward in support of a program for the restoration of normal economic relations between nations, and instead of aiding is correspondingly obstructing the program which this and an increasing number of other governments are carrying forward; that it is utterly hopeless to contemplate the restoration of the many normal and worthwhile international relationships, political, economic, moral, or peace, unless the economic approach to existing problems and conditions is vigorously pursued under the leadership of our two countries; and hence that a failure of such leadership with suitable program now will leave the entire international situation moving steadily toward anarchy, with no plans to carry forward a comprehensive program for peaceful rehabilitation generally and for cooperation to restore moral concepts and the sanctity of treaties.

With regard to trade agreement we emphasized its desirability from the point of view both of symbolizing community of basic views and policies as between the two countries and of improving Anglo-American trade relations. We pointed out that we were not opposed to the principle of imperial preferences but we insisted that the margins of preference should be such as not to cause artificial and unreasonable diversion of trade. Accordingly, we indicated that reductions in a number of rates bound in the Ottawa agreements are [Page 13] indispensable to successful negotiations. We are now refining the list of commodities on which we feel we must have such reduction and hope to be in a position to transmit the list to Chalkley very soon. We are making every endeavor to keep both the list and the amount of reduction down to an absolute minimum.

In your conversations with Runciman, you may reiterate, as occasion arises, any of the points brought out in this summary, as your own understanding of our point of view.

You are authorized to show this telegram in confidence to the Commercial Attaché as well as other memoranda, et cetera, which have been sent to you.

Report fully what Runciman says to you and any other developments.

I rather gathered that Runciman was under the impression that the President had expressed a wish to have him come over to see him. I find that the arrangements for the visit were made by a third person who spoke to the President of the value of seeing Runciman if he came over. To this the President readily agreed, but I think it is well for you to know that the President did not take the initiative with regard to the visit.

  1. Tariff Act of 1930, 46 Stat. 590.