It is my guess that the British may ask to make a similar substitution of language (my message 4013, September 1, midnight 43) as was suggested by them when we discussed the exception clause "with due respect for their existing obligations" in the fourth article of the Roosevelt-Churchill statement. In this situation and at this time contrary to the advice I gave in the last paragraph of my message 4013, September 1, midnight, I believe we should insist on articles even of the provisional draft given me when I was last in Washington including the provision against discrimination. I think this can be gotten without open debate in Parliament but if it came to debate on this issue while the Parliament was considering Lend-Lease I believe the majority of the Conservatives, Liberals, and the entire labor block would give their support. I doubt if you will get a better opportunity to press this matter.

For reasons that are good and that you would understand and approve I would particularly ask that this message to you be not given to Lord Halifax or any other British representative.

WINANT

841.24/898

Memorandum of Conversation, by the Assistant Secretary of State

(Acheson)

[WASHINGTON,] October 3, 1941. The British Ambassador called at his request after his conversation with the Secretary. He referred to the draft temporary Lease-Lend Agreement which had been given to Mr. Keynes in July and to the conversation which I had had with the Ambassador just before he left for England.

He told me that immediately upon his arrival in England he had spent the weekend with the Prime Minister and had discussed the draft agreement with him. He reported that the Prime Minister had stated that, second only to the winning of the war, the most important thing for the British Empire was to reach a satisfactory economic accord with the United States and that all its other arrangements should fall in line with this paramount matter.

The Ambassador then stated that he had then talked to Treasury Officials. He mentioned Mr. Kingsley Wood, Mr. Keynes, and "others". He stated that they were also sympathetic with the objectives of the agreement and appreciated its generosity. They felt, however, that the clause in Article VII relating to the provisions against discrimination should be clarified in order that there should

43 Vol. I, p. 370.

44

Joint statement by President Roosevelt and British Prime Minister Churchill on August 14, 1941, known as the Atlantic Charter; for text, see vol. I, p. 367.

be no possibility of charges of bad faith or grounds for misunderstanding. He said that the Treasury officials had been working on a suggested clarification which the Ambassador had hoped to bring with him. However, it had not been completed before he left and it will be brought over by Mr. Opie,45 who would be coming sometime this week. This suggestion he said was along the lines of the suggestion which Mr. Eden had made to Mr. Winant when Mr. Winant had proposed a clarification of Article IV of the Atlantic statement. (The matter to which the Prime Minister referred was as follows: By cable of August 25,46 the Secretary had suggested the following as part of a joint statement "The fourth point in the statement by the President and Mr. Churchill is a forthright declaration of intention by the British and American Governments to do everything in their power, now and in the post-war period, by means of the reduction of trade barriers and the reduction or elimination of preferences and discriminations, 'to further the enjoyment by all States, great or small, victor or vanquished, of access, on equal terms, to the trade and to the raw materials of the world which are needed for their economic prosperity."" The British suggested that the words immediately preceding the inner quotes be changed to read "by means of the reduction or elimination of harmful restrictions as part of a general scheme.") The Ambassador went on to say that he earnestly hoped that we could accept the suggested change, but that before presenting the draft formally he would like to present it to the appropriate officials informally so that he might have their views in such a discussion rather than through the medium of the formal exchange of notes. I replied that I was sure that this could be accomplished, but added that I was doubtful about the language used on account of its vagueness; that a "harmful restriction" was usually a restriction which somebody else proposed and that the reference to a general scheme seemed to contemplate an international conference, the acceptance of which might be very far away. He said that the latter was not the intention, but that the general scheme referred to was a general scheme between the United States and the British Empire.

The Ambassador then went on to say that the draft which the British proposed would contain an additional provision, by which it would be agreed that conversations would immediately ensue in order to amplify the economic provisions of the tentative draft. He said that in the event such discussions occurred the question would arise as to who should conduct them for the British and that, since the Treasury was deeply concerned and as Mr. Keynes carried very considerable weight with the Treasury, it might be desirable for him to return, possibly accompanied by another official. He asked whether Mr. Opie or Sir

45 Redvers Opie, First Secretary of the British Embassy.

46 Vol. 1, p. 369.

Frederick Leith-Ross 7 or Sir Frederick Phillips would in my judgment be helpful. I replied that they were all persons for whom we had the highest regard and suggested that it might be worth his consideration having someone who was not also a Treasury official since the considerations involved were not purely financial, but went deeply into the field of commercial policy and political relations. The Ambassador concluded by saying that as soon as Mr. Opie arrived with the draft he would again get in touch with me.

DEAN ACHESON

841.24/1074

Memorandum of Conversation, by the Under Secretary of State

(Welles)

[WASHINGTON,] October 9, 1941.

The British Ambassador called to see me this afternoon at his request.

Lord Halifax referred to the conversation he had had with Mr. Acheson upon his return regarding the temporary Lease-Lend agreement. He explained to me the divergence of views within the British cabinet with regard to Article 7 and stated that Mr. Churchill strongly supported the position taken by this Government. He said that notwithstanding the very strong opposition on the part of the extreme Tory elements in the cabinet to the policy of this Government he was optimistic that some solution satisfactory to this Government "might be found.

S[UMNER] W[ELLES]

841.24/1019

Memorandum of Conversation, by the Assistant Secretary of State

(Acheson)

[WASHINGTON,] October 17, 1941. Mr. Acheson and Mr. Hawkins called on the British Ambassador at his request. Mr. Opie was present with the Ambassador. Mr. Opie had brought from England with him drafts of two papers: One was a draft of temporary lease-lend agreement prepared in London; the second was a draft of communication to accompany the former. The Ambassador stated that the British Government did not wish to transmit any document which was not agreeable to this Government and that he was therefore taking this opportunity to acquaint us in the most informal manner with the tentative proposal so that, after

"Chairman of the Inter-Allied Committee on Post-War Requirements.

considering it with the appropriate officials of the Department, we might transmit to him in an equally informal manner any comments or suggestions, which he would promptly take up with London. He hoped that the Department would find it possible to accept the tentative draft.

The Ambassador then to a large extent repeated the substance of his earlier conversation with me, reported in my memorandum of October 3, 1941. Briefly his comments were that there was general accord in London with the purposes of our draft as explained more fully to the Ambassador in my conversation with him of last August and in Mr. Hawkins's memorandum to the Secretary, a copy of which was given to him. The purpose of the tentative draft was to provide against the possibility which the British Treasury officials believed existed in our draft that the British Government would be undertaking unilateral obligations which it might be unable to fulfill. He again stated the earnest desire of the Prime Minister to reach an economic understanding with this country. He spoke also of the possibilities of political difficulties within the Conservative Party which might arise from attempting to deal too generally with the matter of imperial preference before the point arrived at which concrete alternatives might be discussed.

The Ambassador stated that the suggestion which was included in the alternative draft that representatives of the British Government should come to this country for the purpose of continuing the development of an economic understanding did not necessarily have to appear in the document itself, but that his Government attached importance to this part of the proposal.

We stated to the Ambassador that we would immediately discuss the documents which he gave us with the Secretary who would undoubtedly wish to discuss them with the President and that as soon as possible we will again communicate with him. **Copies of the documents are attached.

DEAN ACHESON

[Annex 1-Extract],

Draft of Temporary Lend-Lease Agreement Prepared by the British Government 49

ARTICLE VII

The terms and conditions upon which the Government of the United Kingdom receives defence, aid from the Government of the United

49

With the exception of article VII, the British draft was substantially the same as that of the American proposed text, p. 13.

409021-59-4

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; they shall provide for joint and agreed action by the United States and United Kingdom, each working within the limits of their governing economic conditions, directed to securing as part of a general plan the progressive attainment of a balanced international economy, the avoidance of harmful discriminations, and generally the economic objectives set forth in the joint Declaration made by the President of the United States of America and the Prime Minister of the United Kingdom on August 12th [14th] 1941.

And furthermore it is agreed that at an early convenient date conversations should be begun between the two Governments with a view to discussing the best means of attaining the above objects and generally the better ordering of economic intercourse between nations in future conditions of settled peace.

[Annex 2]

Draft Letter for Lord Halifax To Accompany the Amendments Proposed to the "Consideration" Proposals

DEAR MR. ACHESON: My Government have taken advantage of my presence in London to instruct me in the light of careful thought which they have given to the draft proposals under Section 3 (b) of the Lend-Lease Act which you handed to Mr. Keynes on July 28, 1941.

2. They are very sensible of the generosity of the terms of these proposals and are anxious to accept them in spirit and in substance with the least possible amendment of the form of words proposed. They are no less keenly alive to the magnitude of the question and are most anxious to respond to the broad manner in which the United States Government have invited their collaboration.

3. They are therefore glad to say that apart from some verbal changes of no significance which are set out in a separate paper,50 no question arises except in regard to Article VII. My Government believe that their intentions and their hopes for the economic organizations of the post-war world are closely in line with those of the President. They have found that it is not easy to refer to these in precise terms until the two Governments have defined them in their own minds in more detail than is yet possible. Meanwhile H. M. Government are anxious in all candour not to subscribe to phrases which 50 Not printed.