The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received February 6—8:08 p.m.]
565. Personal for the Secretary and Assistant Secretary Acheson. Department’s 419, February 4, 6 p.m.18 This morning the Cabinet met to discuss again article 7. This afternoon I met with Eden [Page 530]and he gave me a copy of the instruction sent to Halifax in which an exchange of notes is requested in accepting the agreement in toto. The note we are requested to sign, however, in my opinion is a negation of most we have asked for (see numbered paragraph 4) with a new reservation that acceptance of the agreement as interpreted by the British will require the Dominions’ agreement to their signature, thus, involving further delay and the Dominions’ concurrence in the elimination of any Empire preference from the category of discrimination.
Eden explained to me that the Cabinet took the position that it is unwilling to barter Empire preference in exchange for money and goods, i. e. planes, tanks, guns, et cetera because of the political repercussion that they believe would result. He told me he hoped I would be able to say a word in explanation of this political conclusion. I did not agree to do this. In fact I told him I could not carry out his request since the document in my opinion defeated the primary objective of article 7 and further asked for an agreement on the negation by the Dominions.
In our conversation I asked if there was any reason for including paragraph 6 of his draft note. He told me he was sure there would be no objection to its elimination. You will note in paragraph 4 the phraseology employed “members of the same Commonwealth or Federation.” This might be interpreted to exclude Crown Colonies and other non-Dominion possessions. Paragraph 4 of the note would not apply, as I understand it, to discriminatory treatment between Great Britain and foreign countries and therefore would eliminate discriminatory use of exchange control and other objectionable forms of bilateralism.
What I could do I have done to persuade key people here of the soundness of our point of view. Among others I saw yesterday Bruce, High Commissioner for Australia. I had previously told him that his suggested amendment19 had been rejected by the Department (my number 10, January 2, 3 p.m.20). He told me he understood our position and would do everything possible to get acceptance of the article as it stood. He cabled Curtin21 asking that he support our views.
I believe a possible further approach to this matter in the light of this latest development would be to directly enlist the support of the Dominions. I should think agreement by them if obtained would lessen the fear of political opposition here in view of the argument of Dominion opposition employed by those opposed to our position.[Page 531]
You may, however, have a better approach that would be less time-taking and more direct.
I understand the Prime Minister is sending a message to the President.
The following are the texts of the draft notes suggested,
- Note we are requested to sign.
- “I have the honor to refer to the conversations which have
taken place between representatives of the Governments of the
United States and the United Kingdom of Great Britain and
Northern Ireland in connection with article 7 of the Lease-Lend
provisional agreement signed this day.
- During the course of these conversations representatives of the United States have indicated that their Government fully appreciate the postwar problems which will confront the Governments of the United States and the United Kingdom and of other countries which may subsequently participate in the agreed action for the attainment of the objectives stated in the said article 7.
- The representatives of the United States Government have referred to the special position of the United Kingdom by reason of its dependence on international trade and to the severity of the problem of the balance of payments with which the Government of the United Kingdom will have to deal in the postwar period and they have recognized the necessity of taking this problem into account in formulating agreed action to attain the ends of article 7.
- The representatives of the United Kingdom Government have stated that they do not understand the word ‘discrimination’ as applying to special arrangements between members of the same commonwealth or federation such as the British Commonwealth or the United States of America and its possessions and that before accepting any definite commitment involving modification of the existing system of imperial preference the Government of the United Kingdom would naturally require to consult with the Governments of the Dominions.
- The representatives of the Government of the United Kingdom have referred to the problem which will confront the United States Government in making adjustments in the protective system of the United States in order that the United States may take their appropriate place in the system of world trade that the respective Governments are striving to attain.
- The representatives of both contracting Governments recognized that progress in the attainment of the objects stated in article 7 must be gradual, and that nothing in article 7 makes either contracting Government to take action unilaterally without regard to action by; the other, as may be agreed after discussion such as is contemplated under the above mentioned article.
- I have the honor to inform Your Excellency that it is the understanding of the Government of the United States, in signing the agreement referred to above, that each of the contracting Governments, in concerting the measures necessary for the attainment in common accord of the objectives envisaged in article 7, will take fully into account the problems and conditions set forth in preceding paragraphs. I shall therefore be grateful if Your Excellency will furnish me with [Page 532]an assurance that this is also the understanding of the Government of the United Kingdom.”
- Lord Halifax’s reply.
“I have the honor to acknowledge receipt of Your Excellency’s note of this day’s date in which you were so good as to recapitulate the various problems and conditions which should be taken into account in connection with article 7 of the Lease-Lend provision[al] agreement which we have signed today.
I have the honor to inform Your Excellency that His Majesty’s Government in the United Kingdom entirely share the view of the United States Government as regards the desirability of taking fully into account all the problems and conditions to which allusion is made in Your Excellency’s note.”