840.50/1026
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received January 7, 1943.]
Sir: I have the honor to refer to the Embassy’s telegram No. 6239, dated November 6, 1942, and Department’s telegram No. 5628, dated November 10, 1942, and to transmit herewith one copy of each of the following:53
- 1.
- The amended minutes of the meeting on Post-War Commercial Policy held at the Board of Trade on November 20, 1942, and attended by representatives of the Allied Governments established in London and the appropriate British authorities, together with observers from the Soviet Union, China, and the British Dominions, and two observers from this Embassy.
- 2.
- An informal British paper entitled “Summary of the Views of the European Allies on Economic Cooperation after the War”, which was given informally to a member of the Embassy and summarises such information as the British had before the meeting on the views of the Allied Governments on post-war commercial policy.
- 3.
- A confidential questionnaire which, following a decision taken at the meeting, was subsequently sent to the representatives of the [Page 241] Allied Governments established in London who were present at the meeting, and the answers to which are likely to form the basis of discussion at a further meeting.
It was made clear, first to a member of the Embassy in informal conversation, second in the notices calling the meeting, and third by the Chairman, Mr. Harcourt Johnstone, Parliamentary Secretary to the Department of Overseas Trade at the meeting, that the British Government did not itself feel able to make any positive proposals or attempt to formulate a policy at this stage and before it had entered into conversations with the Government of the United States.
We would draw particular attention, however, to the statement in Mr. Harcourt Johnstone’s opening speech that the United Kingdom Government “were signatories of the Atlantic Charter and of the Mutual Aid Agreement and proposed that their policies and actions should derive from the spirit which inspired those documents. This would involve what might look like sacrifices on the part of the United Kingdom on a short view and would indeed imperil the economic future of the country unless all other countries approached the matter in the same spirit.”
It is clear, first from Mr. Harcourt Johnstone’s remark, that “…54 this does not mean that His Majesty’s Government had not some schemes in mind”, second from his insistence on the point that notwithstanding the great importance of expansionist policies and of measures for improving the international monetary mechanism, “the problems of commercial policy proper, tariffs, quotas, etc. would still have to be faced”, and third from individual statements made in informal conversations with government economists and civil servants, that the British wish to give a leading place to commercial policy in post-war international economic reconstruction.
The meeting failed to bring out decisive and detailed expressions of the views of the Allied Governments in London on commercial policy, and the general impression left by it was summed up during a personal conversation after the meeting by a leading Board of Trade official as follows: “What it really means is that they are waiting for you and for us (i. e. the United States and Britain) to go ahead and formulate our views.” This viewpoint received some support from personal talks with Allied representatives concerned with economic matters. Representatives of small countries in particular feel that the commercial policies of their countries must be largely determined by the policies adopted by the large states and in particular by the United States and Great Britain.
It is believed that an additional reason for the reticence of some of the Allied representatives, especially those of central and eastern [Page 242] European countries, is to be found in the presence of observers from the Soviet Union. The question of commercial arrangements between certain countries with contiguous territories, leading in some cases to partial or complete economic federation was on the whole carefully avoided by Allied representatives, who are somewhat apprehensive of Soviet reactions on political grounds to large unions or close federations in eastern and central Europe.
The suggestion of M. Alphand55 that more precise questions on commercial policy should be formulated was favorably received by the meeting and has led to the formulation by the Board of Trade and Foreign Office of the questionnaire which is enclosed with this despatch. The British intend first to discuss this questionnaire informally with individual representatives of the countries concerned and later to call another meeting.
The Embassy will be kept fully informed of the progress of these talks. Harcourt Johnstone and Fraser of the Board of Trade and Ronald in the Foreign Office are anxious to keep in close informal touch with us and to do all they can to expedite the implementation of Article VII in its commercial aspects. They feel that the meeting served a valuable purpose in minimising the possibility that at the stage when British-American talks take place Allied representatives might complain that their views had not been sought and might express apprehensions regarding the possible effects on their countries of the results of discussions between Britain and America.
In a recent personal conversation M. Alphand expressed his views to one of the Embassy observers as follows. He believes that in the immediate post-occupation and post-war period it will be essential for France to maintain strict rationing, price control and exchange control to prevent serious inflationary possibilities from developing. He believes however that such exchange control should not be used as an instrument of bilateral commercial arrangements. He considers that exchange control and control of imports will be necessary as instruments for securing priority in imports for those materials that are essential for the restoration of productive capacity, but that every effort should be made to prevent such import controls from being exercised in a discriminatory manner. Finally he is strongly of opinion that when this reconstruction period is over import controls, rationing and price controls should be abolished, and exchange control should be abandoned, except in so far as it may be necessary for the prevention of flight movements of capital.
Respectfully yours,
First Secretary of Embassy