and our relations with other nations. On the positive side it starts out by recognizing the primary importance of increased economic activity, both national and international, in production, employment and the exchange and consumption of goods. It is against this background and in conjunction with it that the objectives of eliminating discriminatory treatment, reducing tariffs and achieving the other objectives of the Atlantic Charter are added. The Article recognizes explicitly that the liberalizing of commercial policy is a matter requiring action by all participants and that to succeed it requires high standards of productivity and consumption. The Article does not lay down self-executing substantive provisions but points a broad course and commits the two nations to collaborate in making headway along that course. The Governments in collaboration will recognize the governing economic conditions in seeking the best means of making the goals obtainable. There is no attempt whatever to impose a formula which will itself be the touchstone to solve all problems but rather to provide that they shall be solved by consultation and agreement. It is obvious that the problems confronting the two nations, as well as those confronting other nations, will be different. The Article imposes no uniform solution but does provide for common counsel and agreed action rather than the principle that at the end of the war each nation will attempt to carve out a position for itself.

British preoccupations with their current and post-war problems, as imparted to us on numerous occasions, have been prominently in mind in the preparation of this draft. They have been met by providing (1) that whatever is determined under Article VII shall be determined by agreement reached after the conversations provided for; (2) that the determinations shall be reached in the light of governing economic conditions, so that if, for instance, the removal of discriminations and reduction of trade barriers should in fact be found impracticable except by gradual stages, there is nothing in this agreement to prevent adjusting the action to such findings; and (3) that the field of matters to be considered and included in the final settlement shall not be limited to matters of commercial policy only, but shall embrace all measures for promoting increased production, employment, exchange, and consumption of goods. There is thus no ground for the argument that the proposed conversations and the scope of the final settlement would ignore or prejudice the problems of the British post-war position. On the contrary, the agreement furnishes the best possible method of solving them.

The draft is not only moderate in that it confines itself to a statement of objectives, but the objectives themselves are reasonable from the British standpoint. We ask no unilateral commitment from Britain but impose identical obligations on ourselves. Nor do we ask

Britain to join with us in seeking the attainment of objectives which would be beneficial to us but harmful to Britain. On the contrary, what is sought is the creation of conditions in the post-war period which would operate not merely to our advantage but to their advantage and that of all peoples. Indeed it might be argued that since the prosperity of Britain depends to an even larger degree on the condition of international trade than does that of the United States they are even more vitally concerned in the conditions we are seeking. The objectives laid down are those set forth in point 4 of the Atlantic declaration to which the Prime Minister subscribed undoubtedly because he considered them in the best interest of the British as well as of others.

With respect to the provision concerning discrimination, all that we ask is that the British sit down with us to work out the problems which lie ahead so that we may avoid substituting trade warfare in peacetime for the present wartime cooperation.

Article VII lays down a broad program around which all liberal forces in both countries can gather and which, if developed with sufficient vigor, can inspire hope for the future in the British, American, and other peoples.

The points raised in this telegram and also Department's 5789 are the main considerations we wish you to have in mind when you present the American angle to the British authorities.

HULL

841.24/1095: Telegram

The Ambassador in the United Kingdom (Winant) to the Secretary of State

LONDON, December 14, 1941-8 p. m. [Received December 14-6:35 p. m.]

6049. Personal for Assistant Secretary Acheson, Your 5637, 5789 and 5790 53 received. I carried out the instructions given me and took the subject matter up with the Prime Minister. He referred me to the Chancellor of the Exchequer who promised me that he would discuss the matter with Cabinet members and report back to me. I have just received a note from him, however, saying that after talking with his colleagues he had referred it back to Lord Halifax. The Secretary will explain the reason for this to you. :

I wanted you to know that aside from the war emergency which has blocked consideration of everything else for the moment the bill conscripting women which created a sharp temporary break in the Labor Party but which was largely overcome in the final vote on this

54

measure by the Government members of the Labor Party temporarily shook the Conservatives in the Government and gave them a new sense of dependency on the Conservative majority. The loss of the Prince of Wales and the Repulse added to a reluctance to take any action that might disturb the status quo. All this is temporary. I believe if we could have had the issue up 3 weeks ago we would have gotten it through promptly and I am certain that if we patiently hold our ground our position as outlined in the new draft of articles even will be accepted by the British within a reasonable period of time. There will be an effort, however, to try to postpone action on this demand on the wheat agreement and to ask that they be made a part of general economic discussions between the two Governments.

I would especially ask that you show this message only to the Secretary and Under Secretary.

WINANT

841.24/1107: Telegram

The Ambassador in the United Kingdom (Winant) to the

Secretary of State

LONDON, December 26, 1941-1 p. m. [Received December 26-9:15 a. m.]

6223. Personal to the Secretary. In my message No. 6049, December 14, 8 p. m., I explained that I had taken up article VII as amended in the draft Lend-Lease Agreement with the accompanying arguments in your No. 5789, December 9, 7 p. m.; and your 5790, December 9, 8 p. m., and that the Prime Minister had referred me to the Chancellor of the Exchequer. I could not get the Prime Minister himself to seriously consider the issue or the arguments. He was planning to leave the following evening for the United States and wanted to discuss his trip and other things that he felt were of more immediate concern at the moment.

This issue of settlement under Lend-Lease is now being returned through Halifax to the Prime Minister after further consideration by the Cabinet on Wednesday evening and with certain requests as regards interpretation.' I believe it is both wise and necessary to press for final agreement at this time. The drag of it as unsettled business interferes with good relations. In presenting the case to the Prime Minister, I wanted the President and you to know that to my best knowledge he has not either read or seriously considered the arguments presented in your briefs (your 5789 and 5790).

54 British warships sunk by Japanese air attack at Singapore, December 10, 1941.

55 December 24.

I was not officially informed about the Cabinet meeting or the action taken.

WINANT

841.24/1107

Memorandum by the Assistant Secretary of State (Acheson)

56

[WASHINGTON,] December 26, 1941.

The attached telegram 57 bears on a matter concerning the present status of the lend-lease discussions with the British which I mentioned earlier this week. This was that I had been informed by an official of the British Embassy that the Ambassador with the concurrence of the ranking officers of the Embassy and of other British missions in Washington had sent a very strong telegram insisting that in their view it was most imperative that the British Government accept the proposed temporary lend-lease agreement without further discussion. I was told that the new draft had not received any substantial consideration from the Prime Minister and that, if it were raised during the current discussions, he would receive from his British advisers here unanimous advice to accept and sign it. I was also told that, if this Government should fail to press the matter at this time and allow the proposed agreement to be returned to London for further discussion, it might again become bogged down in the British bureaucracy. Mr. Winant's telegram seems to bear out the suggestion that the present may be the ideal time for reaching an agreement.

DEAN ACHESON

841.24/1111: Telegram

The Ambassador in the United Kingdom (Winant) to the
Secretary of State

LONDON, December 27, 1941-11 p. m. [Received December 27-8:15 p. m.]

6246. Following up my 6223, December 20 [26]. Yesterday the Chancellor of the Exchequer asked me if I would call on him at 11:00 this morning, which I did. We talked at some length. He told me that he wanted me to know that the Cabinet had asked Lord Halifax to take up with Mr. Churchill while in Washington article VII as amended in the draft Lend-Lease Agreement. The substance of what he said on this subject I reported to you in my 6223. He told me that Halifax was as insistent as I was in trying to get agreement on the article; but he read to me from a draft memorandum which

Addressed to the Secretary of State and the Under Secretary of State (Welles). 57 Supra.

Halifax had forwarded for Cabinet consideration in which the latter stated that it was not the wish of Washington to have the British and the Dominions now abandon Empire preference but rather to agree that it would be done in connection with certain tariff reductions on our part at the end of the war. This is not the exact language of the memorandum but is the sense of it as I understood it. The Chancellor plainly did not want to give me the text and only read from it briefly. I told him that no instructions that I had received corresponded with that interpretation and that I personally did not think an agreement on that basis would amount to much, although I wanted him to understand that I had no direct information on the subject other than the instructions and the memorandum which you had forwarded to me at different times and which I had brought to the attention of the Prime Minister, the Foreign Secretary and himself. You will know the complete story.

The point I wish to make is that Halifax's interpretation was undoubtedly responsible for the Cabinet suggestion that an additional memorandum of explanation be prepared and made a part of the agreement in order that there could be no misunderstanding, either by the Governments or the public in the United States, Great Britain or the Dominions now or hereafter. I agree that the meaning of the language and the degree of the commitment undertaken should be completely clear; but I believe that is as plain as the article as now drawn.

It may be that after Halifax confers with the Prime Minister, this Cabinet proposal may never reach you but I wanted you to have this background.

Because the Chancellor, when I talked to him a fortnight ago, had suggested opposition of the Dominions to abolish Empire preference, I consulted Stanley Bruce, High Commissioner for Australia. He did not agree. Bruce suggested two possible amendments to article VII. One, to place the word "progressive" before the word "elimination” so that that section of the article would read "to the progressive elimination of all forms of discriminatory treatment in international commerce and to the reduction of tariffs and other trade barriers" or two, to so amend this section as to read "to the removal of the causes which have lent to discriminatory policies and to the progressive elimination of all forms of discriminatory treatment in international commerce and to the reduction of tariffs and other trade barriers". I am forwarding these suggestions. They might be helpful.

There is another phase of this problem which I know you are aware of and which has been very much in the minds of men here. It has to do with the believed necessity of continuing exchange control beyond the war period and of course relates itself to the subject matter of article VII.