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LONDON, September 1, 1941-midnight.
[Received September 2-12:45 a.m.]
4013. For the Secretary and Assistant Secretary Acheson. In the last 3 or 4 days I have had several talks with Lord Halifax.(1) He has been so genuinely interested in trying to find ways and means to work out an economic policy that conforms with the ideas and principles that you both talked over with him, and so honest and painstaking in trying to get an acceptance of that policy in his talks with the Prime Minister and Mr. Eden and others, that I thought you should know it.
There have been four subjects that have created considerable discussion lately in the economic field.
1. The agreement on lend-lease exports (2) which I hope to report to you on tomorrow.
2. The provisional draft of the lend-lease agreement.
3. The discussions on the wheat agreement (3) which have been stimulated by the agricultural mission.
4. The reference to the meaning of the words "with due respect for their existing obligations" in the fourth point of the Roosevelt-Churchill joint statement of August 14.
It is on the fourth point as set forth in your messages Nos. 3375, 3376 and 3377 of August 25 that I wish to make the subject matter of this message, but I wanted you to know that all of -these items have been talked over singularly Stand collectively by Government economists, civil servants and Ministers, with exception of the last point which the Prime Minister has taken up with the Conservatives in his Cabinet only. Any inconsistencies in these four items that might have been assumed or may exist have been a part of these discussions. I felt that for the moment at least it was our task here to do an educational job. We have done what we could to have minds meet on a basis of fried so interchange
I feel that personally both the Prime Minister and Mr. Eden support the purpose of your statement as contained in your 3376. They each feel however that the language used in your statement would necessitate a consultation with the Dominion Governments without any certainty of acceptance by the Dominion Governments, and in my opinion are even more troubled by the possibility of an open break in the Parliament within the ranks of the Conservatives, which they believe would be unfortunate in the present war effort.
The wording of article 4 as it stands is acceptable to all parties concerned.
Mr. Churchill has suggested that in place of the phrase in the Department's statement "by means of the reduction of trade barriers and the reduction or elimination of preferences and discriminations" the following language should be substituted "by means of the reduction of trade barriers and the reduction and elimination of harmful restrictions as part of a general scheme".
You will remember that sometime after accepting the office of Prime Minister Mr. Churchill also accepted the headship of the Conservative Party. This party holds a large majority in the Parliament and is composed of many shades of opinion within its ranks. Some are strong supporters of Empire preference policies.
I feel myself that a public debate in the Parliament on a post-war issue involving the United States at this time would be unwise. There has been a growing restlessness in England in the last few days. After Churchill's last speech there was a good deal of comment that he had said a great deal about Russia; that Russia was doing most of the fighting.
I think it may come from a realization that without the help of the United States, England is forced to remain on the defensive and unable to take the offensive so far as Europe is concerned. A lot of people here would like to get on with the war and they are beginning to feel that we are slow about coming in. We don't mind telling each other what we think on that subject, but few of us like others to tell us. A debate in the Parliament which might be critical of the United States could not lift opinion at home. If the language in this statement is not satisfactory, I would suggest postponing a decision on the issue until some later date since it would inevitably lead to an open difference of opinion in the Parliament.