840.50/3827: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received 9:04 p.m.]
4782. For those concerned with Article VII questions: No. 9 [10] in series. In an informal conversation Keynes expressed optimism on the prospects of agreement not only on the stabilization fund but also on the Bank for Reconstruction and Development.
After reading the United States Treasury memorandum61 he had formed the conclusion that there was ground for acceptable compromise between the United States and United Kingdom positions on international investment.
He expressed a strong desire and hope that during the forthcoming discussions the plans for the bank would be advanced to a point parallel with the stage reached on the stabilization fund.
The deadlock on the question of continuing the commercial policy talks continues. There is little controversy on the question of commodity policy, and delay in continuing the discussions on this field is merely a by-product of the difficulties at the ministerial level on the commercial policy talks. Both Ronald and Keynes have expressed the view that while there should be no inherent difficulty on the commodity policy talks they regarded them as being so bound up with general commercial policy that there would be little point in attempting to continue them until the deadlock on the commercial policy talks has been broken.
These and other personal talks with officials concerned with Article VII discussions support the views expressed in Embassy’s 3914 of [Page 47] May 13 that the civil service viewpoint remains unchanged in fundamentals. Civil servants have from time to time pressed Ministers vigorously and there has been much argument and some friction behind the scenes, particularly with regard to the question of continuing the conversations at the technical level. Because of this friction some of the British with whom we frequently discuss commercial policy matters have asked recently not to have their names quoted even confidentially at present.
British civil servants concerned with the commercial policy talks are pessimistic regarding the immediate future. They agree that the multilateral scope of the proposed international commercial policy arrangements would have a favorable effect on British opinion if it were known. However, they doubt whether this would have much practical effect before the November elections since there is widespread fear in Britain that the results of those elections might be to destroy the chances that the United States will be willing to enter into an arrangement for a substantial all round reduction in trade barriers.
Ronald also does not see any prospects of breaking the deadlock on commercial policy in the immediate future. On the other hand Keynes is more hopeful and it was evident during a conversation with him on Tuesday last that he intends to make strong personal efforts within governmental circles to get the commercial policy talks restarted as soon as he returns from the United States. He said that he had been so completely tied up with the work on the monetary and investment plans that he had been unable recently to take any active steps in relation to the commercial policy and commodity talks.
If Keynes is able later to throw his energies into attempting to break the deadlock there is in our opinion some hope that his persuasive powers, his influence with Ministers and his political insight may produce more effective results than can be reached through the Board of Trade civil servants who, though technically able and of high integrity, are far less effective in political strategy.