Memorandum by the Deputy Director of the Office of Economic Security Policy (Rubin)7

In the meeting in Mr. Thorp’s office on April 12, 1946 it was indicated that the British had expressed a firm opposition to continuation of the Proclaimed List beyond June 30, 1946. Taking as a fact British withdrawal of the Statutory List as of that day, the problem was whether the Proclaimed List should be continued alone and whether the Proclaimed List should be withdrawn from any area of the world prior to June 30, 1946, if the decision were made that it should not be continued alone.

On the question of continuation of the Proclaimed List without the support of the Statutory List, it was agreed that it would be unwise politically and ineffective from the economic and trading point of view. It was indicated that the Department would adhere to its previous stand, that the Proclaimed List would not be continued alone.

On the basis of the representation of ARA, it was also agreed that the List would be withdrawn at one time for both the Western and the Eastern Hemispheres and that withdrawal from Argentina would be made at the same time as for the rest of the world.

The considerations in favor of these decisions are fairly obvious. On the other side it might be pointed out that Ambassador Messersmith8 had indicated strongly his belief that the PL should be continued in the Latin American countries for an indefinite period of time, in order to give support to the replacement programs there, and that some of the Latin American countries had themselves requested continuance of the List. It was also noted that public statements had been made to the effect that the List would be withdrawn more quickly from those areas furthest removed from the actual scene of combat than from other areas, and more quickly in those places where replacement programs had been carried forward. It was also pointed out that the current Swiss negotiations may result in at least an agreement to withdraw the Proclaimed List from Switzerland immediately and that actual withdrawal of the List from Switzerland might have to take place sometime prior to June 30, 1946.

Subsequently I was informed that Mr. Braden and Ambassador Messersmith strongly opposed the decision to withdraw the list on June 30, 1946 and had asked that all action on this question be withheld [Page 81] until a further meeting is convened to discuss the matter. Under these circumstances it may be necessary for Mr. Clayton to participate in such a meeting. The pressure on the one side will be to retain the list even in those countries which have best cooperated with us, in order to encourage continuation of the replacement program and to give some outside support to those elements within the local governments which are striving to continue the replacement programs. On the other hand, the Latin American countries must be cut off from this type of support sooner or later and a period of more than one year after hostilities in Europe have ceased would seem to be more or less adequate. On the separate issue of the Argentine, the considerations are very largely political, since the maintenance of a separate list for Argentina, if the rest of the continent has been deleted, will be almost entirely a political gesture. The importation of supplies from cloaks in other countries will be impossible to prevent and the prestige of the list will deteriorate very rapidly.

So far as the European picture is concerned a commitment indefinitely to continue the list would be in line with the decision of the Executive Committee on Economic Foreign Policy. If such a decision were reached it would make negotiations with the neutrals a great deal easier and guarantee that we would not be embarrassed by making a concession to a neutral with which we signed an agreement, which neutral would then find that our concession was no more than an empty gesture since the list was to be deleted universally within a few weeks. However, on this point I have pressed the matter as strongly as possible with British representatives here and with Mr. McCombe, the British Delegate to the Swiss negotiations. The British so far have been adamant on the June 30 date. If they are to be persuaded, a discussion will have to take place on a higher—and indeed very high—level.

  1. Addressed to the Assistant Secretary of State for Econmic Affairs (Clayton) and to the Deputy to the Assistant Secretary (Thorp).
  2. George S. Messersmith, Ambassador in Argentina.