Roosevelt Papers

Department of State Briefing Paper 1


Credits for Great Britain: Commercial Policy

There are growing indications that the British Government con templates approaching us concerning the seriousness of their financial situation. At one time they contemplated sending Sir John Anderson, Chancellor of the Exchequer, to Washington for this purpose. It is understood, however, that they have decided to defer Anderson’s visit for several months. The Prime Minister may possibly raise this question with you at your forthcoming meeting.

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It seems to me that it is in the interests of the people of the United States that we extend such credits and other financial assistance to the United Kingdom as may be necessary to reconstitute and restore what has traditionally been the largest market for American goods.

At the same time it is of fundamental importance to the interests of the United States and to the establishment of the kind of economic conditions which we hope to see prevail in the post-war world that we not blindly grant credits to the United Kingdom without taking into consideration the kind of commercial policy and trade practices which it may adopt.

The British may seek to take the position that unless wholly satisfactory financial arrangements are made for assisting them in meeting their admittedly serious balance-of-payments problems, they cannot pursue the liberal, multilateral trade policies we have advocated. That position would not be sound and we should not accept it.

Our position should be that whatever the British balance-of-payments problems may be and to whatever extent they may receive our help in meeting them, those problems will in our view be less difficult in a world in which the United States and Britain take the leadership in bringing about the greatest possible expansion of international trade on a multilateral nondiscriminatory basis; that balance-of-payments problems will be more difficult to meet if bilateralistic practices on the German pattern, high tariffs, quotas and discriminations result in a scramble among nations for a diminishing volume of world trade.

In brief, in dealing with the British in regard to financial and other economic problems, I believe our basic position should be that the trade policies we advocate are not something the British should do for us in return for our financial help, but that, irrespective of such help, liberal trade policies designed to bring about an expanding world trade are in Britain’s own interest.

Obviously, therefore, we should not offer to extend generous credits to Great Britain at a low rate of interest in return for commitments regarding commercial policy and imperial preference (which we already have, in preliminary form, in the Basic Lend-Lease Agreement). The field for bargaining about these matters should be the narrow one of respective tariff concessions. It seems to me, however, that we may properly bear in mind that the United Kingdom will not be a good credit risk unless she embarks on a sound commercial policy.

The discussion of trade policies which may take place with the British in the near future will be more fruitful from our standpoint, if there can be complete understanding on the above point before those discussions are undertaken.

  1. Annex 10 to Hull’s memorandum to Roosevelt dated September 6, 1944, which was sent to the White House under cover of a further memorandum of September 8. See ante, p. 120.