1. A meeting was called this morning by the Chancellor of the
Exchequer and attended by myself, other Dominion representatives,
the President of the Board of Trade and Secretary of State for the
Dominions. The meeting discussed further the present stage in the
Washington talks.

2. Dalton [1] confirmed that no firm offer of financial aid had
yet been made by the Americans. In reply to my question Dalton
said that aid is to cover requirements of sterling area with some
'readjustment of sterling area arrangements', but at present the
United Kingdom has nothing concrete to put to the Dominions.

3. On commercial policy Cripps [2] believes there is prospect of
American acceptance of the United Kingdom compromise proposal for
joint treatment of tariffs referred to in D.1909. [3]

4. A telegram is being sent by the Dominions Office to-day
advising the latest proposals for procedure and treatment of state
trading, export subsidies, shipping subsidies and similar detailed
matters. Both Dalton and Cripps confirm that the United Kingdom
will not accept any limitation on the right to make bulk purchase
arrangements with regular suppliers, which would also retain
rights of bulk acquisitions and sale by the exporting country.

5. Cripps then put the proposition that it is necessary to decide
within a few days whether the Dominions and the United Kingdom
will agree to make preference reduction a matter for negotiation
as part of general tariff... [4] At the same time it is admitted
that the American time table for a conference in June is
unrealistic in view of the likely long duration of the work of the
proposed drafting committee.

6. My feeling is that the United Kingdom, under pressure from the
United States, is using hustling tactics which we should resist.

The fact is that, although the United Kingdom claim that they will
not permit financial aid from the United States to be made a
consideration in commercial policy negotiations, the United States
do not take this view, and the hastening of commercial discussion
increases the danger of the United Kingdom making unwarranted
concessions on financial grounds. The danger from our point of
view is the greater because of the conflicts in the industrial and
agricultural interests of the United Kingdom and Australia. I
regard both Cripps and Dalton as being only remotely concerned
with the agricultural and industrial interests of the Dominions.

Canada is, of course, in a special position.

7. I insisted that these discussions have been carried to an
advanced stage with only limited consultation with Dominions. It
is not certain that we are prepared to make commitments even to
negotiate about preference and tariff reductions at this stage.

Moreover, we would insist that trade policy is governed by the
obligations concerning maintenance of employment which all
countries, including the United States, accepted in the San
Francisco Charter. My feeling is that the time is coming when you
will have to take a strong public stand.

8. Of course, nothing was determined except to report to our
Governments.

I am leaving in a few hours for Washington by ship and expect to
arrive there in time for the first meeting of the Far Eastern
Commission.