561.311 F1 Advisory Committee/1033b

The Secretary of State to the Ambassador in the United Kingdom (Winant)

No. 553

Sir: There is enclosed for your information a copy of the provisional draft agreement97 which officials of the various governments participating in the wheat discussions in Washington prepared before recessing on August 3, 1941. They plan to reconvene, after their respective governments have had an opportunity to consider the draft, with a view to carrying on the discussions toward a definitive agreement.

Our Ambassador in Buenos Aires has been requested to indicate to the Government of Argentina the importance attached by this Government to the conclusion of a wheat agreement. It was understood, after consultation with Mr. Carlill,98 that the British Government might instruct its Ambassador in Buenos Aires to take similar action. Mr. Carlill subsequently received from London a tentative instruction in this regard which it was proposed to send to the British Ambassador in Buenos Aires. It contained a statement to the effect that His Majesty’s Government felt it necessary to point out that there would probably have to be amendments in the case of certain important points. It was not believed that a pointed statement of this sort, open to the possible inference that the British Government had already decided that certain important provisions of the proposed agreement were unacceptable, would be desirable. The understanding is, of course, that the draft agreement is provisional and subject to amendment in the course of further discussions. Mr. Carlill indicated that he would approach the British Ambassador here with a view to his suggesting to London that the wording of the instruction be changed in certain respects.

Since the question of the wheat agreement may be raised for discussion in conversations which you may have with British officials, it may be useful to point out certain general considerations indicating the far-reaching importance which the Department attaches to the conclusion of a satisfactory wheat agreement.

The conclusion at this time of such an agreement is highly desirable from the point of view of wheat alone. Among the objectives of the draft agreement are the expansion of world trade in wheat through the reduction of import barriers and other means, the stabilization of such trade at prices equitable to both producers and consumers, the adjustment of wheat production, on a basis of expanded [Page 533] trade, from a state of chronic excess to levels in keeping with market requirements, the maintenance of adequate reserves for use when harvests are inadequate, and the provision of supplies for immediate postwar relief. The proposed agreement offers for the first time a real hope that the wheat exporting countries may regain a substantial part of their losses (some 200,000,000 bushels) in the European market since the 1920’s, and assures the importing countries ample supplies at fair prices regardless of fluctuations in output from year to year.

It is believed that in the inevitable confusion of the period immediately following the cessation of hostilities it would be far more difficult than at present to deal with the wheat problem on the comprehensive basis envisaged in the draft agreement under reference. Although no one can foretell what the state of the world will be after the war, in all essentials the wheat problem will be the same then as it is now, as will be the methods of dealing with it. Indeed, unless a comprehensive agreement is concluded at the earliest practicable date by the governments participating in the current discussions, it may be anticipated that the wheat problem will become even more acute than it now is, that a most favorable opportunity will have been lost to deal effectively with this problem, which is of such great importance to all wheat-exporting and importing countries, and that the risk of serious consequences to some if not all of the countries concerned will be greatly, magnified.

It is of course in the interest of the wheat-exporting countries that European wheat-importing countries should learn as soon as possible of the new policy which they will at the appropriate time be pressed to adopt. It is before, and not after, their urgent postwar needs have been relieved, that they should appreciate the necessity of international collaboration in working out an effective solution of the world wheat problem.

Moreover, the conclusion of a wheat agreement in accordance with objectives indicated above will have an important bearing on the solution of other problems of export surpluses. Such an agreement would not only encourage desires and efforts to conclude agreements in regard to other commodities presenting similar problems but will also help to establish the basic principles on which such agreements should be based.

Furthermore, the conclusion at this time of a satisfactory agreement regarding an important commodity such as wheat would be exceedingly significant from the point of view of the expressed intentions of the democracies regarding postwar reconstruction. It would forcefully impress upon all peoples the determination of the democracies to translate such intentions into practical measures and would [Page 534] help to dissipate doubts that may now exist as to the possibilities of effective cooperation in the solution of international problems.

Failure to conclude a wheat agreement would be exceedingly unfortunate, not only from the point of view of relieving the pressure of export surpluses of wheat and other commodities, but also from the point of view of relying on international collaboration for the provision of immediate postwar relief or for any effective solution of world problems.

It is possible, of course, that any definitive agreement which may be reached in regard to wheat as the result of further discussions may differ in some important respects from that embodied in the provisional draft. This Government is now considering the draft with the view to indicating any changes or revisions which may be deemed desirable. The other interested governments are likewise engaged. Considerable differences of views between the various governments may develop and have to be worked out. It is believed, however, in view of the considerations set forth above, that each government should contribute to the utmost towards bringing the discussions to a successful conclusion.

Very truly yours,

For the Secretary of State:
Breckinridge Long
  1. Not attached to file copy.
  2. H. F. Carlill, Chairman of the International Wheat Advisory Committee.