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

Participants: Sir Frederick Phillips, British Treasury Representative
Mr. Redvers Opie, Counselor of the British Embassy
Mr. Dean Acheson
Mr. Achilles41a

Sir Frederick Phillips and Mr. Opie called at their request. Sir Frederick inquired about the status of the exchange of notes on reciprocal aid and was informed that the Australian text was now cleared with the Australian Government and ready for submission to the President with the British text. We expected to hear on Wednesday or Thursday from the New Zealand Minister. We had hopes that the notes might be approved and signed this week.42

Sir Frederick then said that he wished to raise a question regarding conversations under Article VII of the Lend-Lease Agreement. As he had informed me some time ago (see my memorandum of conversation with Sir Frederick Phillips and Dr. Pasvolsky on July 17, 1942 with reference to informal discussions with Treasury and financial officials), he had been instructed by his Government to take up with the Treasury and this Department some ideas regarding a stabilization fund which were being developed in London. He had also mentioned this to Secretary Morgenthau and had been at work upon a memorandum which he proposed to leave with the Treasury and with this Department toward the end of this week. He wished to discuss procedure as to these conversations. I said to Sir Frederick that financial matters were not under my charge but were under Assistant Secretary Berle and that the memorandum should be left with Mr. Berle and that Sir Frederick should discuss with Mr. Berle the procedure for developing his ideas on this matter.

Sir Frederick asked whether it was our idea that the various subjects should be treated separately in the discussions under Article VII. He said that on the British side they proposed to deal with these discussions as a unit because of their inter-related character. I said that we also understood that many or all of these subjects were closely related and had made and were making arrangements for developing a treatment of them which would recognize this. However, in the interest of division of labor, Mr. Berle would handle certain [Page 200] subjects, of which the stabilization fund would be one. I would deal with others, and possibly other officers with still others. The whole matter would be brought together by meetings between us under the direction of the Secretary and the Under Secretary and through Dr. Pasvolsky’s staff.

Mr. Opie then asked whether there had been any change in our policy toward these discussions; that is, did we still intend to have bilateral discussions with the various countries which had signed lend-lease agreements. He said that there was considerable worry about this in London and that Sir Ronald Campbell had felt that the Secretary in their recent conversation on the matter had not appeared so desirous of going forward with these discussions as this Government had seemed some time ago. I said that I did not believe that this was the correct interpretation of the Secretary’s remarks, which I thought were directed toward pointing out the need for care and discretion in these conversations in order not to arouse adverse criticism both in this country and among our allies, at a time when it might be thought that the progress of the war was not such as to warrant diverting attention to post-war matters. I did not believe that the Secretary had changed his view that many of these matters must be discussed during the war and not left to its conclusion.

Sir Frederick then mentioned the proposed visit of Under Secretary Law, which he said had been delayed a few days so that the Under Secretary would now arrive on Monday, August 24 or Tuesday, August 25. I said that I had understood that Sir Ronald Campbell had informed the Department that a well known economist would accompany the Under Secretary and asked if they could inform me who he was and tell me anything about his plans. Mr. Opie and Sir Frederick both stated that they thought this must have been a misunderstanding; that so far as they knew, Mr. Nigel Ronald was the only person accompanying Mr. Law.

Dean Acheson
  1. Theodore C. Achilles, of the Division of European Affairs.
  2. For texts of notes exchanged September 3, 1942, see Executive Agreement Series Nos. 270, 271, and 272, or 56 Stat. (pt. 2) 1605, 1608, and 1611. For correspondence regarding the negotiations, see pp. 537 ff.