Foreign Relations of the United States: Diplomatic Papers, 1942, General; the British Commonwealth; the Far East, Volume I

840.50/391: Telegram

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

London, April 25, 1942—3 p.m.
[Received 5 p.m.]

2162. Embassy’s confidential telegram No. 1789, April 12, 3 p.m. Ronald, the Foreign Office economist, giving his personal views with the knowledge and approval of the Secretary of State,¹¹ Under Secretary Law¹² and the Prime Minister’s private secretary, expressed concern at a telegram from Phillips¹³ to the Treasury. That telegram recounted a conversation in which Assistant Secretary Acheson was reported to have said that American Government economists had not yet made sufficient preparations for the conversations and that it might be 6 weeks to 2 months before we were ready.

The Foreign Office and the Secretary of State personally are most anxious, Ronald said, that detailed preparations here shall not be carried to an advanced stage before the conversations take place. They desire that American influence shall be brought to bear on Government economists and civil servants here as soon as possible with a view to preventing undue crystallization of ideas and suggested plans before they have been subjected to American criticisms and American ideas.

Ronald read from a long memorandum which the Foreign Office prepared for circulation to those who are concerned within Government departments with discussions following up article VII of the Lend-Lease Agreement. The memorandum emphasized the desirability of an informal approach and deprecate[d] any attempt at the formulation of rigid positions and undue emphasis on difficulties in matters of detail. It asked for an exploratory approach to the general questions of Anglo-American and world economic relations with a view to ultimately working out in line with American thought the principles of an agreement that will appeal to the imagination of the world, serve as a stimulus to all the forces fighting aggression and provide an answer to the question: “What are we fighting for?” It stressed the importance of avoiding anything that might give rise to the least suspicion that any attempt was being made to “put over” anything on the American economists and anything that might be interpreted as “intellectual arrogance”. The last phrase was inserted because of the controversy to which Keynes’ visit gave rise in Washington last summer.¹⁴

Yesterday the Foreign Office considered the drafting of a telegram to Lord Halifax explaining the Foreign Secretary’s views on the dangers of over-preparation and crystallization of ideas in the Departments and the desirability of bringing American ideas to bear on British thinking as soon as possible. This morning, however, it was decided that this could hardly be done without offending those who have worked hard in some of the Departments here on the problems concerned, and the idea was dropped. A simple instruction will be sent to Lord Halifax shortly expressing the Government’s cordial support of the idea of the conversations.

It is understood that Whitehead, son of the Harvard professor, who is working for the Foreign Office, will be attached to the British group because of his knowledge of the American political structure, to prevent them from suggesting to the American group commitments which the United States because of its political structure is unable to make.

Ronald emphasized that the Foreign Office conception of the form and method of the preliminary talks, described above and in Embassy’s 1789 of April 12, merely represents British ideas on the matter and the Foreign Office is of course open to alternative suggestions from the American side. Their conception of these talks is summed up in a phrase in the Foreign Office memorandum as “informal, exploratory and noncommittal”.

It is understood that the Foreign Office intends to make up the British group primarily from the temporary, advisory Government personnel and largely to exclude the permanent civil service personnel. It seems probable that it will be made up of persons in the category of Keynes, Lord Catto,¹⁵ Henry Clay¹⁶ and some War Cabinet economists.

From Ronald and from independent sources it is clear that the Foreign Office has been working strongly for some time to impress on Departments the importance of the following up of article VII of the Lend-Lease Agreement and the necessity of full Anglo-American economic agreement and cooperation.

From direct statements in a number of informal conversations with Keynes and from reliable evidence from talks with other economists who are in close touch with him, it can be said that Keynes has abandoned support of bilateral discriminatory arrangements to meet balance of payments difficulties and has energetically worked on other solutions. James Meade, who has become increasingly influential and who powerfully influenced Keynes to abandon bilateralism, says confidentially that Keynes’ attitude is now all that can be desired on the matter.

Ronald said the Foreign Office suggestion would be to inform Russia a few days before the conversations began that they were purely informal and exploratory and that when any developments occurred later the Russians would be kept informed. He also raised the question of what would be made public at the time of the meeting of the economists, and after some discussion he suggested that it might be given out that the economists were exchanging ideas on the economic and non-strategic aspects of the war organization. The Foreign Office will be glad of suggestions on this point.

Discussions with Sir John Orr¹⁷ seem to indicate that the nutrition group here has been concentrating on impressing on Ministers the importance of a nutrition program in connection with reconstruction. Public interest in the subject continues to grow but Ministers were very poorly informed. Eden, Law and Jowitt¹⁸ now strongly support an international nutrition program and the nutrition group is now extending its propaganda to draw in additional political support.

The Ministerial Committee on Reconstruction Problems now consists of Jowitt, Eden, Cranborne,¹⁹ Bevin,²⁰ R. A. Butler, President of the Board of Education, and Harcourt Johnstone, Minister of Overseas Trade. The last two have been added very recently to the Committee. The addition of Butler has to do with an interest which has developed in the formulation of ideas with regard to the possibilities of postwar reeducation of youth in Fascist countries.

Matthews

11. Anthony Eden, British Secretary of State for Foreign Affairs.
12. Richard K. Law, British Parliamentary Under Secretary of State for Foreign Affairs.
13. Sir Frederick Phillips, British Treasury representative in the United States.
14. See Foreign Relations, 1941, vol. iii, pp. 10–22 passim.
15. Financial Adviser to the British Treasury.
16. Economic Adviser to the Bank of England, since 1933.
17. Member of the Advisory Committee on Nutrition, British Ministry of Health.
18. Sir William A. Jowitt, British Solicitor General.
19. Viscount Cranborne, British Secretary of State for the Colonies.
20. Ernest Bevin, British Minister of Labour and National Service.