The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received 9:35 p.m.]
491. Embassy’s 56, January 4 and 66 , January 5. For those concerned with economic conversations under Article VII.
International Commodity Organization. Robbins13 in personal conversation drew a rough contrast between what he thought the best procedure in dealing with monetary and commercial policy on the one hand and commodity questions on the other. In regard to the two former, he thought it necessary to work out in considerable detail the preliminary measures to be adopted. In regard to the latter, he holds to the view that the initial step should be agreement on a very general statement of principles and on the framework of a general commodity council, and that agreement on this should be possible at a fairly early stage. He thought the application of the principles to particular commodities could be worked out later and that the general [Page 6] agreement need not wait for the working out of detailed methods of application. As to the practicability of purely buffer stock arrangements, he envisaged a period of experimentation with certain commodities. He emphasized that the British Government would continue to act as it had done in the case of rubber14 and oppose renewal of prewar commodity controls pending establishment of a general international commodity council, after which arrangements for particular commodities would be formulated in line with agreed general principles and with the approval of the general commodity council.
Robbins is personally more sympathetic to the case for a formal limit to subsidies than others with whom the subject has been discussed but shares their doubts of its political practicability here. It seems possible that some progress might be made here after a detailed study of alternative methods of formulating such limits.
Fears of American Postwar Depression. There is increasing evidence here of concern about the ability of the United States to maintain a high level of employment after the war. This creates an attitude of reservation regarding the prospects for international economic reconstruction, and thus may indirectly affect the political reception that will be given here to measures for implementing Article VII of the mutual aid agreement.
Keynes, Robbins and Meade have recently emphasized the importance of this in personal conversations. Keynes felt that the vast majority in American business and congressional circles had not yet grasped the fundamental principles of full employment policy and would reject the measures necessary to apply them. Meade argued for maximum elasticity in exchange rates, chiefly because of his skepticism of America’s ability to prevent serious depression even a decade after the war. Robbins spoke of a tendency in some civil service and ministerial circles here to favor going slow with commitments on international economic reconstruction for fear that a slump in America would dislocate international economic organization. The British group that took part in the economic conversations vigorously opposes this tendency but would welcome evidence of greater activity in the formulation of domestic plans for maintaining full employment in the United States, and of a more favorable attitude in the legislative branch towards the adoption of the necessary measures for maintaining employment after the war. In particular, they do not think there is much evidence that any comprehensive housing program is being prepared. In Britain, it is felt that a well considered housing program is essential to the maintenance of construction activity after the war and the British program is well under way.[Page 7]
There is no doubt that the greater the evidences of American activity in respect to postwar domestic full employment measures the more disposition there will be in political and public circles here to favor large British contributions to international economic reconstruction.
British Labor Viewpoints Relevant to Article VII Discussions. We learn in strict confidence that the General Council of the Trade Union Congress is preparing to approach the Government with an offer to waive the restoration of restrictive union practices after the war on condition that the Government gives assurances it will adopt adequate measures for the maintenance of full employment.
In regard to British press statements implying that the General Council of the Trade Union Congress has endorsed the Edgar Jones plan for a world trade alliance,15 we find from personal inquiries that the Council has not endorsed any of the specific proposals of the World Trade Alliance but has merely given its approval to the principle of a permanent international economic organization concerned with international trade problems.
- Lionel Robbins of the Economic Secretariat, British War Cabinet Offices.↩
- For documentation regarding termination of the International Rubber Regulation Agreement and exploratory discussions for a new agreement, see pp. 950 ff.↩
- For information concerning the organization of the World Trade Alliance at London, July 19, 1943, under leadership of Sir Edgar R. Jones, see the London Times, July 20, 1943, p. 2.↩