560.AL/3–448: Telegram
The Secretary of State to the Embassy in the United Kingdom
niact
760. For Douglas from Clayton (For delivery before 9 a.m.) Dept and USDel consider proviso suggested by Cripps (urtel 860 Mar 4) wholly unacceptable.
If limiting agreement referred to in proviso is interpreted to apply only to Anglo-U.S. financial agreement, the proviso would give British wider freedom to discriminate than any other country since other countries would be confined to continuance or adaptation of restrictions in force on Feb 15, 1948, but British would not be limited in any way. Para B would be nullified so far as they are concerned. Our agreement to any such provision would be regarded as a complete sellout by other countries at Habana, particularly Belgians, Dutch and Latin Americans. Any discrimination against British under present draft is more apparent than real, as under Article 14 of Fund Agreement they could do practically anything they could legitimately desire. Moreover, in any case where conditions on a base date are made the test, there is bound to be a difference in the treatment of different countries.
If limiting agreement referred to in proviso is interpreted to apply to any agreements providing for most-favored-nation treatment, such as U.S. trade agreements and commercial treaties, the exoneration would be so widespread as practically to render Art 23 meaningless.
The proviso could be used as a lever by British to nullify Section 9 of the Anglo-U.S. financial agreement. This is a matter which should be handled in separate U.S.–UK negotiations, and collateral attack on the agreement through Charter is unacceptable.
Resolution this question urgent as atmosphere Habana cordial and all points except this one will be settled Friday or Saturday.
Sent London as 760. Repeated niact Habana as 302. [Clayton.]