611.4131/1776
Memorandum of Conversation, by the Assistant Secretary of State (Sayre)
The British Ambassador came in to see me at four o’clock this afternoon. He said that he was not acting under any instructions but merely dropped in to see me upon my return to Washington. After a few pleasant remarks, he asked what my feeling is with regard to the British trade agreement.
I replied that I was very much concerned about it. I said that I felt alarmed at the small amount of progress which has been made during the past month and that I felt much discouraged about the agreement. I went on to say that at such a time, when war was threatening and Germany was pounding at our gates, it seemed to me tragic that we had not been able to reach and sign an agreement. I went on to say that I felt disappointed that apparently the negotiations were descending too much into a horse-trade, and that to think of pounds, shillings and pence, when the whole future of the [Page 54] world is at stake, seemed to me lamentable. I went on to say that it seemed to me the time had come when the agreement must be forced through or else we must face failure. I said that I wished I could see some way of lifting the negotiations out of the realm of horse-trading and looking at them instead in the light of the world situation. I said that failure would be the greatest comfort to Germany that she could have.
The Ambassador whole-heartedly agreed with all that I said. I asked the Ambassador whether he could see any practical way for doing this. He was unable to suggest any. I said “What would be the effect if Secretary Hull talked on the telephone to Mr. Chamberlain?” The Ambassador replied: “Oh, don’t do that. The Foreign Office never does business that way. I do not think it would do any good.”
When the Ambassador inquired why we could not bring the agreement to a state of finality forthwith, I replied that we are forced to be realists about the matter. I said it is not a case of mere desires but of practical possibilities. I said that I might desire a return by the United States to the full Underwood tariff duties53 but that if I seriously proposed such a course of action I would be thrown out of the window. I said that Secretary Hull and the rest of us are sincerely desirous of reducing trade barriers as far as it is practicable to do so, but that no matter what our desires may be, there is a practical line beyond which we cannot step.
I went on to give, as an instance, the case of lumber. I said that in making concessions to the United Kingdom on textiles we knew that we would have New England ranged against us and that unless we could obtain the political support of the Northwest we must face the possibility of all our efforts being overthrown by hostile action in the next Congress. It was for this reason that we considered lumber a sine qua non for the agreement. No matter what our desires might be, we could not support our trade agreements program without the lumber concession.
I also spoke about rice and lard. I said that without the support of our agricultural groups we were in danger of being overthrown and that the present agricultural concessions which the United Kingdom has offered are so weak that it is questionable whether we can be assured of their support.
I went on to say that we are not so very far apart. If the British Government can give us the lumber concession and can also do more for us on rice and lard, I personally thought a way could be found to close up the agreement.
[Page 55]I also spoke briefly about the automobile situation. The Ambassador said very decidedly that he believed that Great Britain had gone as far as it possibly could. “We have reached our limit”, he said, “and I do not honestly believe my Government will go any further.”
I again adverted to lumber. The Ambassador said that the lumber situation was not an economic consideration but rather a matter of conscience in living up to most-favored-nation promises given to the Baltic countries. I said that our men are now at work seeking to find a formula which would satisfy the British conscience and that I hoped with all my heart that they could find one which the British Government would accept. I added again, in rather measured words, that I felt the lumber concession to be a sine qua non for the agreement.
The Ambassador said that if the United States Government should say to the British: “Satisfy us on this one concession and we will sign the agreement”, the British Government might be induced to do so. But, he added, if the American Government says: “Give us a, b, and c”, i. e., several concessions, he felt that the reply of the British Government must be “no”.
The Ambassador also spoke about the drop in value of the pound sterling, saying that one of the reasons for this was the heavy British imports from the United States. I replied that since he mentioned the matter, I ought to tell him in confidence that the Treasury Department had spoken about the drop in the pound sterling and of its fears that the drop would be increased. I said that some over in the Treasury had suggested that the entire list of concessions should be revised in the light of the pound depreciation. Sir Ronald’s reply was that that would be the end of the agreement.
The conversation throughout was exceedingly informal and pleasant. The Ambassador did not disagree with any of the things which I said and reiterated his strong desire to get the agreement signed at the earliest possible moment.
- Tariff Act of 1913; 38 Stat. 114.↩