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it there, and said that the British Government might propose some alteration in the language or might wish to have some further clarification on the Article.
He then said that there was considerable difference of opinion in London about future courses. There were some who believed that Great Britain should return to a free trade policy; there was a middle group, among whom he classified himself, who believed in the use of control mechanisms; and there was a third group who leant toward imperial policies. I said that I realized this and that we hoped that in his discussion of the Article he would not take a narrow or technical view regarding the language as a draftsman's product, to be carefully analyzed in order to see what might or might not be done under it, but would try to direct attention to its major purpose and attempt to get agreement in order that the major purpose should be achieved.
At the end of our talk he seemed more reconciled to the Article, but by no means wholly so. He insisted that he agreed with the broad purpose and believed that it could be worked out.
Draft Proposal for a Temporary Lend-Lease Agreement Handed by Mr. Acheson to Mr. Keynes on July 28, 1941
Whereas the United States of America and the United Kingdom of Great Britain and Northern Ireland declare that, with self-restraint and sober purpose, they are engaged in a cooperative undertaking, together with every other nation or people of like mind, to the end of laying the bases of a just and enduring world peace securing order under law to themselves and all nations;
And whereas the President of the United States of America has determined, pursuant to the Act of Congress of March 11, 1941, that the defense of the United Kingdom against aggression is vital to the defense of the United States of America;
And whereas the United States of America has extended and is continuing to extend to the United Kingdom aid in resisting aggression;
And whereas the final determination of the terms and conditions upon which the United Kingdom receives such aid and of the benefits to be received by the United States of America in return therefor should be deferred until the extent of the defense aid is known and until the progress of events makes clearer the final terms and conditions and benefits which will be in the mutual interests of the United
States of America and the United Kingdom and will promote the establishment and maintenance of world peace;
And whereas the Governments of the United States of America and the United Kingdom are mutually desirous of concluding now a preliminary agreement in regard to the providing of defense aid and in regard to certain considerations which shall be taken into account in determining such terms and conditions, and the making of such an agreement has been in all respects duly authorized, and all acts, conditions and formalities which it may have been necessary to perform, fulfill or execute prior to the making of such an agreement in conformity with the laws either of the United States of America or of the United Kingdom have been performed, fulfilled or executed as required;
The undersigned, being duly authorized for that purpose, have agreed as follows:
The United States of America will continue to supply the United Kingdom with such defense articles, defense services, and defense information as the President shall authorize to be transferred or provided.
The United Kingdom will continue to contribute to the defense of the United States of America and the strengthening thereof and, should circumstances arise in which the United States of America in its own defense or the defense of the Americas may require articles, services, or information, will provide such articles, services, or information as it may be in a position to supply.
The Government of the United Kingdom will not without the consent of the President transfer title to, or possession of, any defense article or defense information transferred to it under the Act or permit the use thereof by anyone not an officer, employee or agent of the Government of the United Kingdom.
If, as a result of the transfer to the Government of the United Kingdom of any defense article or defense information, it becomes necessary for that Government to take any action or make any payment in order fully to protect any of the rights of a citizen of the United States of America who has patent rights in and to any such defense article or information, the Government of the United Kingdom will take such action or make such payment when requested to do so by the President.
The Government of the United Kingdom will return to the United States of America at the end of the present emergency, as determined by the President, such defense articles transferred under this Agreement as shall not have been destroyed, lost or consumed and as shall be determined by the President to be useful in the defense of the United States of America or of the Western Hemisphere or to be otherwise of use to the United States of America.
In the final determination of the benefits to be provided to the United States of America full cognizance shall be taken of all property, services, information, facilities, or other benefits or considerations provided by the Government of the United Kingdom subsequent to March 11, 1941 and accepted or acknowledged by the President on behalf of the United States of America.
The terms and conditions upon which the United Kingdom receives defense aid from the United States of America and the benefits to be received by the United States of America in return therefor, as finally determined, shall be such as not to burden commerce between the two countries but to promote mutually advantageous economic relations between them and the betterment of world-wide economic relations; they shall provide against discrimination in either the United States of America or the United Kingdom against the importation of any product originating in the other country; and they shall provide for the formulation of measures for the achievement of these ends.
This Agreement shall continue in force from the date on which it is signed until a date agreed upon by the two Governments. Signed and sealed at Washington in duplicate this . . . day of.
On behalf of the United States of America:
On behalf of the United Kingdom of
Great Britain and Northern Ireland:
811.20 (D) E.M.D.E./118: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary
LONDON, July 28, 1941-9 p. m. [Received July 28-3:35 p. m.]
3251. For Secretary Morgenthau. Following up your cable 2657, July 18, 3 p. m., I had a conference this morning with the Chancellor of the Exchequer; Sir John Anderson, head of the Privy Council; Lord Portal, the Deputy Minister of Supply; and Lord Woolton, Minister of Food, on the handling of lend-lease articles and also discussed the question of the export of British materials in cases where they are asking us to supplement their own supplies with similar materials from the United States, for which there exists a shortage in the United States.
We were promised a statement within 48 hours. I believe they are making a genuinely sincere effort to meet the situation. I feel that the Anderson statement was so limited in scope that the Chancellor's promised memorandum should be complete. I believe it will be so and that it will be supported by appropriate action.
Coe is assisting me. We will forward their conclusions for your criticism and comment as soon as the information is available.
Mr. J. M. Keynes, Financial Adviser to the British Government, to the Assistant Secretary of State (Acheson)
NEW YORK, July 29, 1941.
MY DEAR ACHESON: I should not like it to be thought because of my cavilling at the word "discrimination" that the excellence and magnanimity of the first part of that Article VII and of the document as a whole had gone overlooked.
I will do what I can to interpret the mind of the President and of the State Department to people at home and feel some confidence that a right conclusion will be reached.
The Ambassador comes on leave in about a fortnight and I dare say that the main discussions will await his return. So do not expect a reply in the very near future.
My so strong reaction against the word "discrimination" is the result of my feeling so passionately that our hands must be free to make something new and better of the postwar world; not that I want to discriminate in the old bad sense of that word-on the contrary, quite the opposite.
But the word calls up, and must call up-for that is what it means strictly interpreted-all the old lumber, most-favored-nation clause and the rest which was a notorious failure and made such a hash of the old world. We know also that won't work. It is the clutch of the dead, or at least the moribund, hand. If it was accepted it would be cover behind which all the unconstructive and truly reactionary people of both our countries would shelter. We must be free to work out new and better arrangements which will win in substance and not in shadow what the President and you and others really want. As I know you won't dispute this, we shall be able to work something out. Meanwhile forgive my vehemence which has deep causes in my hopes for the future. This is my subject. I know, or partly know, what I want. I know, and clearly know, what I fear.
J. M. KEYNES
The Ambassador in the United Kingdom (Winant) to the Secretary
LONDON, July 31, 1941-noon. [Received July 31-10:45 a. m.]
3310. Personal for the Acting Secretary for the Secretary of the Treasury. In Mr. Hopkins' message to me 2483, July 9, and in Secretary Morgenthau's message to Coe 2657, July 18, in which I was asked to collaborate and also in a section of Secretary Wickard's 21 message 2761, July 24,22 inquiries were made as to the distribution of articles under the Lend-Lease Bill. I have made replies to these messages in my messages 3189, July 24; 3251, July 28; and 3278, July 29, to the Secretary of the Treasury and also in my message 3229, July 26,23 to the Secretary of Agriculture.
Mr. Hopkins asked me to follow this matter up for him as he did not have time to press the importance of the issue himself. Since there seems to be no agreement in principle, I asked the Chancellor of the Exchequer for a statement as I explained in my message 3251, June [July] 28.
The statement handed to me this evening by the Chancellor is as follows:
"1. All materials which we obtain under the Lend-Lease Act are required for the prosecution of the war effort. This principle governs all questions of the distribution and use of such goods and His Majesty's Government have taken and will continue to take action to see
21 Claude R. Wickard, Secretary of Agriculture.
22 Not printed.
23 Telegrams Nos. 3278 and 3229 not printed.