Informed British Embassy Memorandum
The memorandum by the State Department on the forthcoming Tariff negotiations between the United States and the United Kingdom which was handed to United Kingdom representatives on the 11th August was immediately communicated to London. It has been very carefully studied by the United Kingdom authorities who have taken note both of the conclusion to which the memorandum leads and of the economic and other arguments which are adduced in support of the conclusion.
The United Kingdom authorities in raising the matter informally in Washington had, of course, hoped that a rather different conclusion would have emerged from the discussions. They much regret that it has not apparently proved possible to find common ground on this highly important subject and they cannot accept the fundamental economic arguments set out in the United States memorandum which seem to them to ignore some of the basic facts with which the United Kingdom and other countries, not indeed excepting the United States, are faced today and have been faced since the beginning of the war.[Page 797]
They do not, however, consider that it would be profitable to engage in further exchanges on this subject on the eve of the Tariff negotiations. They feel sure that the negotiations will be conducted on both sides in the friendliest spirit and in a genuine attempt to find a common and genuinely mutually advantageous basis of agreement, the political consideration which must weigh with both sides being, of course, given full weight. It would be a disappointment to the United Kingdom as much as to the United States if only a very narrow agreement resulted, but they still hope and feel that an arrangement can be come to which will go some way towards meeting what they conceive to be the essential need in the economic sphere in present circumstances, namely, the progressive correction of the unbalance of trade between the United States and the sterling area.