Memorandum by Mr. Theodore G. Achilles of the Division of European Affairs
Eu3 heartily concurs with TA’s4 view that present lend-lease arrangements with India are satisfactory and that a lend-lease agreement embodying any dilution of Article VII would be highly undesirable.
Eu does not believe that the Indian request for a lend-lease agreement should be considered a “British” proposal. In this connection a responsible official of the British Government recently advised an officer of this Division, “off the record,” that the British Government was considerably embarrassed by the Indian proposal and most anxious not to be maneuvered into a position either of favoring or opposing it. He believed the persons in the Government of India responsible for the proposal to be more interested in the prestige and evidence of emancipation which conclusion of an independent agreement with this Government would bring than in any question of substance. If the British Government indicated any opposition to such an agreement it would be accused of obstructing India’s desire for further measures of independence. If it indicated approval of an agreement containing an unmodified Article VII it would be accused of seeking to keep Indian tariffs low for the benefit of Lancashire. If it supported an agreement containing a diluted Article VII it would be in difficulties with those elements in London, and the Dominion Governments, which had accepted Article VII as a signpost of policy.