611.4131/1807
Memorandum of Conversation, by the Assistant Secretary of State (Sayre)
| Participants: | Sir Ronald Lindsay, British Ambassador, |
| Mr. A. E. Overton, | |
| Mr. Sayre. |
The British Ambassador and Mr. Overton came in to see me at my request at 4:30 this afternoon in order to receive our reply to the British proposals in connection with the trade agreement. I handed to the Ambassador the letter from Secretary Hull dated October 5, 1938,57 the memorandum explaining the draft trade agreement, and the proposed draft trade agreement.58 I wished to avoid discussing with them any specific commodities for I feared that by stressing the importance of some, they might gain the impression that they could safely refuse concessions on others. I therefore suggested that they would want to read the memorandum and draft trade agreement at their leisure. Consequently they did not read these in my office.
I did, however, in a very general way, outline the situation. I said that after learning the British position with respect to lumber, I had discussed the trade agreement with the President and with Secretary Hull. Both of them felt strongly, as I did, that it would be impossible to support the trade agreement unless the British agricultural concessions to us were strengthened. I said that our problem had been to find ways and means of doing this which would not require new consultation with the Dominions and which would not make the proposals impossible of acceptance by the United Kingdom. I went on to say that I thought we had finally found formulas and drafted a proposed agreement which was eminently fair to both sides and which each would find it possible to sign.
The only commodity which I mentioned was tobacco. I said confidentially that Secretary Hull felt very strongly about this commodity [Page 59] and felt it unfair, in view of the great volume of Anglo-American trade in tobacco, in view of the fact that it is not produced in the United Kingdom, and in view of the very high preference maintained in the British market, that the British were unwilling to give a substantial concession. I added that Secretary Hull yielded to the formula proposed with great reluctance.
I added that I had spent all of yesterday in Atlantic City with Secretary Hull going over the trade agreement items and, with him, putting our memorandum into final shape.
I said that my Government had receded on a number of important points so as to make agreement possible. Further than this, because it is necessary to have a strengthened list of agricultural concessions and in order to make agreement possible, my Government had proposed granting new concessions to the United Kingdom in a number of important items, including wool fabrics and wool hosiery.
I also handed to the Ambassador the letter dated October 5 [6], 1938, signed by Secretary Hull, concerning the preference on coal entering Canada.59
The Ambassador, glancing cursorily at the coal letter and at several pages in the memorandum, seemed very grave and worried. Nothing further was said.