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

Participants: The British Ambassador, Lord Halifax;
Mr. Opie, Counselor of the British Embassy;
Mr. Feis;22
Mr. Acheson.

Dr. Feis and Mr. Acheson called on the British Ambassador at his request. The Ambassador stated that he understood that through Mr. Winant we had received the text of the proposed exchange of notes which were intended to accompany an acceptance by the British Government of the present draft of lease-lend agreement. He then referred to his conversation of that morning with the Under Secretary, which is reported in the Under Secretary’s memorandum of February 7, laying particular emphasis upon the Under Secretary’s comments on paragraph 4 of the proposed note from Mr. Winant to the British Government.

We spent considerable time analyzing that paragraph. We stated to the Ambassador that it seemed to us to be the natural meaning of the words used in the paragraph that we were accepting a definition by the British Government of the word “discrimination” in Article VII which excluded from its scope the whole matter of Empire preference, and that we were further accepting the position of the British Government that the matter of Empire preference could not be considered in the discussions contemplated by Article VII except with the consent of the British Government and the Dominions. We pointed out that this had never been our understanding and we saw no likelihood that the Secretary or the President would accept it. We pointed out that we had always taken the position that Article VII did not bind either Government to unilateral action or itself make any change in any [Page 534]existing arrangements. We also stated that we had always taken the position that any modification of the Empire preference system would involve the consent of the Dominions which were parties to it. This, we said, had always been our position; but it had also been our position that all matters involving preferential arrangements were open to discussion and to future agreement in the conversations contemplated in Article VII. After considerable discussion the point seemed to be agreed that the foregoing had been our position and that the proposal made in the proposed note went materially beyond that position.

We stated to the Ambassador that it was for the Secretary and the President to decide what reply should be made to the communication through Mr. Winant. We said that, if they should decide that an exchange of notes was acceptable, we would recommend a statement in the notes of the position which we had consistently taken throughout the discussions, but that we could not recommend any departure from that position. We also pointed out that in any exchange of notes it seemed much more appropriate to have the British Government raise the point which it desired clarified rather than to have the United States Government do so. This view appeared reasonable to Lord Halifax.

Lord Halifax then suggested that the next step appeared to be a reply from this Government in which it would state its position; that the difference between the two Governments was not great and that it certainly should be possible to find a solution. We said that we would report the conversation and make every effort to let the British Government know the President’s and the Secretary’s views at the earliest possible moment.

Dean Acheson
  1. Herbert Feis, Adviser on International Economic Affairs.