841.24/1111: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received December 27—8:15 p.m.]
6246. Following up my 6223, December 20 [26]. Yesterday the Chancellor of the Exchequer asked me if I would call on him at 11:00 this morning, which I did. We talked at some length. He told me that he wanted me to know that the Cabinet had asked Lord Halifax to take up with Mr. Churchill while in Washington article VII as amended in the draft Lend-Lease Agreement. The substance of what he said on this subject I reported to you in my 6223. He told me that Halifax was as insistent as I was in trying to get agreement on the article; but he read to me from a draft memorandum which [Page 52] Halifax had forwarded for Cabinet consideration in which the latter stated that it was not the wish of Washington to have the British and the Dominions now abandon Empire preference but rather to agree that it would be done in connection with certain tariff reductions on our part at the end of the war. This is not the exact language of the memorandum but is the sense of it as I understood it. The Chancellor plainly did not want to give me the text and only read from it briefly. I told him that no instructions that I had received corresponded with that interpretation and that I personally did not think an agreement on that basis would amount to much, although I wanted him to understand that I had no direct information on the subject other than the instructions and the memorandum which you had forwarded to me at different times and which I had brought to the attention of the Prime Minister, the Foreign Secretary and himself. You will know the complete story.
The point I wish to make is that Halifax’s interpretation was undoubtedly responsible for the Cabinet suggestion that an additional memorandum of explanation be prepared and made a part of the agreement in order that there could be no misunderstanding, either by the Governments or the public in the United States, Great Britain or the Dominions now or hereafter. I agree that the meaning of the language and the degree of the commitment undertaken should be completely clear; but I believe that is as plain as the article as now drawn.
It may be that after Halifax confers with the Prime Minister, this Cabinet proposal may never reach you but I wanted you to have this background.
Because the Chancellor, when I talked to him a fortnight ago, had suggested opposition of the Dominions to abolish Empire preference, I consulted Stanley Bruce, High Commissioner for Australia. He did not agree. Bruce suggested two possible amendments to article VII. One, to place the word “progressive” before the word “elimination” so that that section of the article would read “to the progressive elimination of all forms of discriminatory treatment in international commerce and to the reduction of tariffs and other trade barriers” or two, to so amend this section as to read “to the removal of the causes which have lent to discriminatory policies and to the progressive elimination of all forms of discriminatory treatment in international commerce and to the reduction of tariffs and other trade barriers”. I am forwarding these suggestions. They might be helpful.
There is another phase of this problem which I know you are aware of and which has been very much in the minds of men here. It has to do with the believed necessity of continuing exchange control beyond the war period and of course relates itself to the subject matter of article VII.
[Page 53]I presume arrangements will be made to take up this problem at some later date.