18 Legation in Washington to Department of External Affairs

Cablegram 102 WASHINGTON, 30 January 1945, 9.34 p.m.

IMMEDIATE SECRET

1. On receipt of instructions by the British Embassy we immediately conferred with the object of getting the quickest possible action. All agreed that the best method was to submit formal letters addressed to the Under Secretary of State (Stettinius being absent) and signed by the three heads of Missions and to make the personal approach on the operational level. Today Opie [1], Brigden and Reid [2] saw Assistant Secretary William Clayton now in charge of Economic Matters with whom was Charles Taft. [3] Heads of Missions will have the right to discuss the subject later with Clayton or higher authority if that course of action becomes desirable.

2. Our letter was based on your telegram 74. [4] The United Kingdom and New Zealand letters referred to it and expressed complete support. After Clayton had read our letter, there was a short discussion. The case as submitted was amplified in the light of our general position and the desirability of a direct positive and popular approach to the main objectives as stated in Article VII 3. We suggested that the first step would be to consider an appropriate Agenda with the object of at least securing consent to proceed thus far.

4. Clayton said that Spokesmen for all the major countries had now declared themselves to be in accord with the objective of high employment for their own domestic policies and that he had no doubt they would endeavour to achieve it. He said that he found it difficult to see what the Agenda of such a conference could contain on subjects of International action which would not be covered by the Financial and Commercial Policy, subjects already under discussion. He doubted whether subjects of wholly domestic policy could be brought into an International Conference with any success partly because methods would vary between countries and because it would be very difficult to translate any conclusions into International action.

5. on the other hand he said it would be difficult to keep out of an Employment Conference such financial and commercial policies as were to be discussed further and he thought it very important that the conference on commercial policy should be held first.

6. On the latter point Taft observed that many countries were only too ready to defend the adoption of import restrictions, export subsidies and exchange depreciation on the ground that they were necessary to increase domestic employment and that a prior agreement on the avoidance of these methods was most desirable.

7. In concluding the interview Clayton expressed sympathy with our views and restated his opinion that his own Government at least would pursue policies directed to our objective but he made clear his own view that our proposed conference was unnecessary and might create special difficulties. He said frankly that his own reaction was not favourable but that it was a personal one. He promised that the Department would give early consideration to the proposal and furnish a reply.

1 Redvers Opie, economist; Counsellor and Economic Adviser at the U.K. Embassy in Washington.

2 J. S. Reid, officer at the New Zealand Legation in Washington.

3 Special Assistant to Clayton and Director, Office of Transport and Communications Policy, U.S. Department of State, until 15 September.

4 Document 10 was dispatched to Washington as no. 74.

[AA:A1066, ER45/2/3/2]