550.S1/1130¾
Memorandum of Trans-Atlantic Telephone Conversation26
The President: Hello, Mr. Secretary.
The Secretary: Hello, Mr. President. It is splendid to hear your voice. I hope you had a good vacation and everything is fine.
The President: Everything is fine.
The Secretary: We have a complicated situation here about the recess movement. I want to talk to you a few moments about two or three questions. Now the first thing, if it is agreeable with you, I would like to take up with you the memorandum that was sent to you last night about policy generally. Have you got that before you?
The President: No I haven’t, which one was that?
The Secretary: That was a comprehensive memorandum sent from here—
The President: What number was it? Was it number 202?
The Secretary: Moley sent it to you. It starts out “In my communication to you of July 2—”27
[Page 689]The President: No I haven’t got that.
The Secretary: That is what I wanted to talk about.
The President: Go ahead and tell me about it.
The Secretary: It is about three and a half pages that we put together here which we thought embraced substantially your ideas on the monetary situation.
The President: It may be in the State Department, but I haven’t had anything from them since about 9 o’clock.
The Secretary: We can’t understand why they haven’t it over there for you. I wanted to inquire whether that does not contain within its four corners your monetary ideas.
The President: Cordell I will send over there and see if they have it and then I will call you back.
The Secretary: That is all right. That is intended to be all comprehensive providing it is accurate and that is what we wanted to get a careful check on from you.
The President: That is right.
The Secretary: The second thing is about the economic side relating to tariff and other questions arising in that connection. Our position is not fully enough defined really to enable the Delegation, in the judgment of our experts, to give support to any of the different proposals that are under consideration. It is not concrete or definite enough. Your suggestion about the tariff truce—the surtax proposition would of course give relief to the gold standard countries. Then the question would become more or less serious as to whether you could administer the Industrial Recovery Act without violating the proposed tariff truce that would be adopted for six to twelve months. (Interruption) Did you get that last statement about the tariff truce?
The President: No, I got cut off.
The Secretary: I was saying that while the reservations—got to impose surtaxes to offset depreciated currencies—that would give relief to gold standard countries, but as to the other countries, and in that respect the question of how far you could go in administering the tariff or the import side of the Industrial Recovery Act without coming in contact with the tariff truce is one that will have to be further considered.
The President: Yes, that is right. The Agricultural Adjustment Bill seems to be mandatory, but the other Bill, the Industrial Recovery Bill, is wholly discretionary.
The Secretary: Yes, it is discretionary, but if it should be deemed necessary to raise the rates at some time it is a question then of how you could do it without running afoul of the tariff truce.
The President: We would face that on a …,28
[Page 690]The Secretary: Yes, well, on the other question of international agreement for the control of production, now we have constantly emphasized this matter to other delegates. Now, we are not making satisfactory progress. We have sent cables about sugar, lumber and have kept in close touch with the wheat situation29 here. I think Australia and the Argentine are both standing in the way of final agreement although I don’t want to say so publicly. Now, those are the points that I want to call attention to before I get to the question of recess. It looks to our experts as though some little time would be necessary to formulate fully and develop fully our monetary ideas as indicated by your telegrams and also our tariff and other methods of lowering or readjusting trade barriers and a little time will be necessary to develop that policy back home. So the experts would like more time than I think would really be necessary—they would want a good many weeks.
The President: The psychology of it to adjourn or recess would be taken here and in most places as final—
The Secretary: Yes I see.
The President: Make it 10 days and then if we need it another 10 days.
The Secretary: Without going into the question of time, what would you think about recess subject to the call of the President, Prime Minister MacDonald who would remain in close supervision of the committees?
The President: I am afraid he would not call them back again at all.
The Secretary: Well, if they didn’t have an understanding with him—I am not sure that we can prevent recess that is not subject to his call.
The President: That is right.
The Secretary: I may say that on yesterday evening when I went over to the six o’clock meeting of the Bureau which is the steering committee, I could not get any of them to even talk of an adjournment but they seemed bent on putting through an adjournment resolution and saddle on us in express language responsibility for the breaking up of the Conference. I finally manoeuvered to get the adjournment over. Now our problem is, most of our people here think, that we should have a short recess in order to develop some phases of our economic and monetary ideas that we now have before us.
The President: Yes, I think it ought to be a recess to a definite date. If we leave it to MacDonald, the world will say that it will never be called together again.
[Page 691]The Secretary: Our plan on yesterday was to do just what I cabled you—to take a recess subject to the call of Chairman MacDonald and he pledged himself to call them as soon as they had perfected their work or as soon as certain impediments such as fluctuations in currency were removed.
The President: That might be six months. That was intended to nail us to the cross. My idea would be that we should first try to see to it that we are not censored [censured?] in any sort of way as some of them have contemplated. Make it perfectly clear that this particular flare-up over gold related to private agreements between five or six nations and that the agenda for the conference had nothing in it about this particular subject and that we have not taken up any of the really big things in the agenda and that on the temporary monetary paying problem we are perfectly willing to have the other four or five nations concerned do what they want to do. We are not blocking London, Paris, and Rome from making some agreement. I heard over here—we have pretty good information that if that plan had gone through originally and we had approved it, they would have ear-marked a half a million of gold in this country and if they had done that there would have been a flight of gold from the dollar and we would have been morally compelled to stop gold exports again.
The Secretary: Getting back to the matter of recess. Do you agree that instead of opposing adjournment which will probably take place anyhow, would you suggest that we stand for a brief recess with as short a limitation as possible but accepting the best we can get.
The President: Yes, we would have to do that anyway even if it should be something we don’t like. I would say that we do not want to adjourn at all. If we have to limit it, make it by weeks.
The Secretary: It is very important. I am to meet MacDonald and his associates at five thirty by our time and it is all important that you read that three and a half page manuscript which was sent you last night. It was sent through the Embassy, I think, by Moley. It starts in like this: “In my communication to you of July 2—” It is very important that I hear from you on that before I go to see MacDonald. Moley wants to speak to you.
The President: Hello, Ray.
Mr. Moley: That thing went through this morning. The statement to which I referred30 went through this morning. We did it last night—[Swope, Keynes?], Lippman and myself, and it is a statement that is intended to give the general four corners of your position with certain statements in it that I am not sure that you would want, but if you have it before you we have copies here we could [Page 692] go over and cross out parts of it and get the British and the dominions and the Scandinavians and a number of others to agree to it.
The President: I will call you back as soon as I get it from the State Department.
Mr. Moley: It is important that the statement be rewritten before it is issued because there are certain passages that need to be rephrased—rephrased because I want to eliminate certain statements in it for reasons I will give you later.
The President: Righto.
Mr. Moley: It is very important that we go over it together. Cordell and I will be here and you will call back as soon as you get it.
The President: I will send over for it right away.
Mr. Moley: Oh, by the way, …31 handed me this morning a draft memorandum that the dominions have gotten up which practically covers your ground and the whole strategy over here is to solidify England and the dominions and the Scandinavian countries and the United States.
The President: Good.
Mr. Moley: That can be done I am sure if you would agree to issue some such statement as I have sent you. Do you see? The continental countries will be left out in the cold and I think that is the strategy. You will call back then as soon as you get it.32
- Between President Roosevelt, Secretary Hull, and Mr. Moley on Wednesday, July 5, 1933.↩
- Not printed; for statement as submitted to the Conference, see infra. ↩
- Omission indicated in the original.↩
- For correspondence relating to negotiations on wheat production, see pp. 787 ff.↩
- Infra. ↩
- Omission indicated in the original.↩
- No record of telephone call in Department files.↩