840.50/830
Memorandum of Conversation, by the Assistant Secretary of State (Berle)
| Participants: | Mr. Redvers Opie, Counselor of British Embassy; |
| Sir Frederick Phillips; | |
| Mr. Harry White of Treasury; | |
| Dr. Leo Pasvolsky; | |
| A. A. Berle, Jr. |
The first discussion of the so-called Keynes memorandum, “Proposals for an International Clearing Union”, was had in my office this morning at 11:00. The discussion limited itself entirely to procedure, since we are plainly not yet in shape to undertake to express any definitive views.
In accordance with an agreement previously reached with Mr. White, in which Dr. Pasvolsky concurred, I said that I welcomed the opportunity to discuss a matter which must be one of the focal considerations in any plans for the economic organization of the world. We entered on these discussions tentatively and informally but with every hope that they might eventually crystallize into a workable plan.
I then said that we understood that this was an unofficial document, though it had been thoroughly canvassed by the British Government.
Sir Frederick Phillips said that that was true. Although we were [Page 223] referring to it in the correspondence as “Lord Keynes’ memorandum”, it had in fact been passed by the Economic Committee of the War Cabinet, and by the War Cabinet itself. It was informal in the sense that formal discussions under Article VII of the Lend-Lease Agreement had not been commenced. But if they were to commence, this would be one of the formal documents promptly laid upon the table.
I said I understood that; and I likewise considered that the subject we were discussing fell within the general class of subjects embraced in Article VII of the Lend-Lease Agreement. I imagined that a number of subjects equally embraced within that Agreement would be similarly explored.
Sir Frederick said this was a way of getting forward with certain subjects which had to be considered, in view of the delay in opening general conversations under Article VII of the Lend-Lease Agreement.
I then said that while I understood perfectly that these were strictly British-American discussions, we had, in similar matters, found it highly desirable to draw in, when appropriate, other pivotal members of the United Nations, notably Russia and China. We felt it unwise to give any impression that the British and American Governments were making up a plan and then requiring everyone else to take it or leave it. Consequently, I wished to make the point that when it seemed appropriate, we might very well wish to keep certain other governments informed.
Sir Frederick said that he understood that this would not be done without consultation with them; the document in other words was prepared solely for the information of the American Government. I said that that was exactly my understanding.
Mr. White said that he considered that although the existing document should remain as a British-American matter, there were a number of projects circulating, covering more or less the same ground, from a number of quarters, and he thought it would be proper for us as a matter of strictly intellectual exploration to examine these ideas. In this way we should in general be exploring the minds of our principal allies, and could thus harmonize any plan approved of by the British and Americans, with the other parties who would of necessity be interested. This procedure seemed to be agreeable to Sir Frederick. We thus left that matter with the understanding that while this plan, as a plan, was to be discussed between ourselves, general discussions, as they might seem appropriate, of the subject matter of international exchange stabilization, balance of payments, etc., might, where desirable, be carried on for exploratory purposes with other governments. It was implicit that we would generally keep each other informed about such explorations, if any.
We then turned to the substance of the document. I observed that I was happy to find that there was a considerable area in which Lord [Page 224] Keynes’ memorandum coincided with some of the thinking which had been unofficially done in the Treasury. It was notable that as a point of agreement the Treasury had unofficially indicated the necessity of some central organization or institution to deal in international matters with certain phases of the problems of international finance; this also seemed to be the central idea in Lord Keynes’ plan.
Mr. White pointed out that he had unofficially given to Sir Frederick a copy of his recent memorandum proposing an international bank and stabilization fund; that this document did not have the same standing that was provided by Keynes’ memorandum; but that in considerable measure they did agree in general range.
Dr. Pasvolsky observed that there were a number of studies which were going forward as Sir Frederick knew, relating to the British balance of payments situation, and that they were near completion. Mr. White indicated that he thought this was interesting but not determinative because the balance of payments position was a pure guess. I said I thought we could treat the matter as a useful picture of the probable magnitude of the problem; I myself, as a strictly personal matter, felt that we had to approach the problem with the general view that the situation had to be met. We had been very firm in advocating the principle of open trade, and this had been accepted. We recognized that that rendered desirable methods and processes of international finance so handled during the two or three years immediately following the war—if not longer—that they would permit certain other nations, including Britain, to secure raw materials, get their plants going, and commence re-exporting.
Dr. Pasvolsky observed that there were a number of specific questions which we would like to ask in respect of the Keynes’ memorandum. We promised to prepare a list of the more important questions in writing, and send it to Sir Frederick for our next meeting. These would be designed to clarify certain questions raised by the memorandum and would facilitate discussions as to the substance.