561.311F1 Advisory Committee/1068: Telegram

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

5767. Personal to the Secretary and to Assistant Secretary Acheson. Your 5432, November 13 [5446, November 26] received. Before presenting it I have tried to explore the background situation here. My own understanding is limited because I have so little information on the discussions that have taken place in Washington. In spite of this I would like to make certain suggestions prior to taking your cable up with the Prime Minister. I am convinced that no other person can intervene successfully here. Before undertaking a detailing of your instructions to me I would like to say that I believe the Department’s message 4867, October 12 [31], although discussed here, resulted simply in the Foreign Office’s retelegraphing it back to Salter. I cannot find that any additional instructions were sent to the British delegation. I do know that Leith-Ross was for all practical purposes eliminated from the discussions and that decisions were placed in the hands of Ministers who were opposed, Hudson, et cetera, and others who were sufficiently indifferent and confused to prefer non-action to agreement.

The opinion expressed in paragraph 1 of your message is correct. It runs counter to the Prime Minister’s message to the President 4796, October 8, 9 p.m. which is a general acceptance in support of cooperation and agreement. The difficulty due to the possibility of enemy propaganda I believe has been exaggerated by others but I think is of genuine concern to the Prime Minister.

Paragraph 2 can be understood here and will be given weight for political reasons although I think you would agree that the agreement should stand on its own merits.

The substance of paragraph 3 was not reported back here by Salter because his instructions did not permit him to discuss proposals of this character involving allied occupied countries not represented in the discussions. I realize that this does not mean that I should not present this argument nor do I question its merits.

Might I suggest in the second sentence of paragraph 3 in place of the words “… conducive to the greater importation of wheat …” there be substituted “conducive to increased consumption of wheat which would be available to them from exporting countries at reasonable prices”. It seems to me that the sentence as it reads is too bald a bid for markets although the phrase I suggest substituting may be objected to because it brings in the question of price.

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Although the substitute proposals in paragraph 4 might be acceptable here the British would prefer our original proposal provided the amount of the allowance to non-signatory countries were fixed on a reasonable basis and if possible after consultation with the countries concerned.

There is some misunderstanding in my opinion in regard to a figure forwarded here by Salter suggesting that 500,000,000 bushels are to be reserved by the four big exporting countries. It is felt that this leaves no room for possible exports from non-represented exporting countries, i. e., Russia and the Balkan States, et cetera. The assumption here is that before the war the world wheat export market was somewhere around 520,000,000 and 540,000,000 bushels.

Paragraph 5 is a simple statement of fact, paragraph 6 takes up the subject of price. I find that there is not only objection to fixing price by Government officials but that the economists who have been consulted are opposed to it. It is said that experiences with price fixing in commodity agreements in the past have not been altogether happy and that the linking of wheat prices to some average of other prices might lead especially during the change over from war to peace economy to undesired fluctuations not justified by any changes in the costs of production of wheat. These views of course were expressed without knowledge of the last section of this paragraph.

The second sentence of paragraph 7 will be taken as implying price increases. It will be objected to by Treasury officials because of their concern in regard to exchange problems in the immediate post-war period.

I agree so genuinely with paragraph 8 that I am only too happy to carry out the instructions contained therein. It seemed to me, however, that you might want to make some amendment to the message in the light of what information I have been able to give you, and that perhaps you could forward to me by cable additional supporting information.

I hope very much that the contents of this message will be treated as confidential. Any discussion should be limited to our own people; otherwise friendly contacts here might be closed to us to our future disadvantage.

Again may I suggest that agreement on basic economic policy would facilitate handling of specific issues of this character.

A prompt reply would be very much appreciated.