Memorandum of Conversation, by the Assistant Secretary of State (Acheson)

Participants: Sir Frederick Phillips
Dr. Pasvolsky
Mr. Acheson

Sir Frederick Phillips called at his request. He referred to prior conversations which he had had with Dr. Pasvolsky and me on the subject of the time and place for beginning the discussions referred to in Article VII of the Lend-Lease Agreement with the United Kingdom. He said that the British Treasury had asked him to express to this Department and to Secretary Morgenthau its desire to begin at once an informal exploration of certain portions of this matter. He was also authorized to disclose to whatever officials might be designated [Page 193] the line along which the British Treasury is thinking. He was inclined to assume that these discussions should be with officials of the Treasury Department. We said to him that this Department was also interested in these questions and that the Secretary would undoubtedly wish to designate someone to discuss them with him also. I said that both Mr. Berle33 and Dr. Pasvolsky were interested in this field.

Dr. Pasvolsky suggested that it would be most helpful if Sir Frederick would prepare for the Department an outline of the principal points which he was prepared to discuss. He said that he would do this and have it available on Monday or Tuesday. He said that he had an appointment within a few minutes to mention this matter to Mr. Morgenthau.

In response to some questions from Dr. Pasvolsky, he stated that the British Treasury ideas were to form some sort of a clearing union and obtain the adherence of as many nations as possible. The union would establish some gold unit for clearing purposes. The system would involve some provisions for permitting or requiring measures to be taken by a nation whose debit balance increased beyond a certain designated allowance. He stated that these matters had not been fully worked out and that he would cover them in a memorandum which he proposed to leave. We stated that we would bring this communication to the immediate attention of the Secretary and the appropriate officers of the Department.

Dean Acheson
  1. Adolf A. Berle, Jr., Assistant Secretary of State.