FW 841.51/8–647
Memorandum by the Assistant Secretary of State for Economic Affairs (Thorp) to the Under Secretary of State (Lovett)
The British Chargé d’Affaires has asked the Secretary whether the first stages of the conversations to which we have agreed might be held in London. I have recommended to the Secretary that he indicate his firm belief that all conversations be held here in Washington. One reason for this is our conviction that the interests of the British themselves would be prejudiced with American opinion were we put in the position (to use Secretary Snyder’s words) of “a banker running to the convenience of his debtor.” The British, anticipating that we might be of this opinion, have indicated that they will, if we so desire, make arrangements for meetings here.
We may assume, I think, that the conversations will commence within the next ten days or two weeks. It is planned that the American side be the National Advisory Council. As you know, it was the Council which conducted the original negotiations with the British; moreover, “the Secretary, in consultation with the National Advisory Council” is authorized by the British Loan Act, “to carry out the (Financial) Agreement.” In this way, too, the Secretary of Commerce, the Chairman of the Board of Governors of the Federal Reserve System, and the Chairman of the Export-Import Bank will be drawn officially into the negotiations along with State and Treasury.
Conversations with Treasury indicate that negotiations are likely to be divided into two parts, one concerning convertibility, the other involving discrimination. The former will probably be directed by Treasury, whereas the latter involves us primarily. Mr. Ness has advanced to Treasury the suggestion that Agriculture should be represented on the latter group, and has met with favorable response from his opposite numbers.
We are undertaking to keep Mr. Clayton advised by cable.