641.6231/167: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Kennedy)

169. Your 292, March 349 and previous. The prospective trade negotiations between Germany and England, as they relate both to negotiations between private industrial interests and to negotiations between the Governments, are of course of the greatest interest to this Government. I appreciate your reports on the information you have been able to obtain on this subject and I trust that you will continue to follow it and to report thereon. The reports from the field and the great flood of newspaper stories which have reached the Department still leave us without any certain understanding of the objectives of the discussions or of the arrangements which may result.

In a recent conversation with Lindsay, I indicated the strong American interest in this matter, an interest which extends to both the political and the economic connotations of any arrangements which may be worked out between England and Germany. I summarized to him once again our trade program and principles of commercial policy and the necessity for our Governments to take a long-run view rather than to be diverted into picking up bits of immediate advantage which over a longer period fail to contribute to the increase of international trade. I stated to the Ambassador that both Governments are in agreement that this is the only sound permanent basis for international trade and that if a large number of countries, led by Great Britain and the United States, will gradually move toward this program with a decreasing number of exceptions to it, there can be no doubt that our system of trade cannot fail to remain the dominant one. In these circumstances, the degree to which British commercial policy sustains rather than departs from this type of program is therefore of the greatest importance.

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Such evidence as we have been able to gather seems to indicate that the British Government is using the conversations with Germany primarily as a means of safeguarding British trade against German methods of competition and that the German Government is similarly seeking to protect German trade. What form of arrangements such efforts may result in is, however, not at all clear. If any arrangements should be established which would facilitate the operation of the German trade system, while Germany continues to arm and to threaten aggression, this could not fail at the present time to attract attention in the United States and to affect public sentiment with regard to European affairs.

One possible form of arrangement might, of course, be some sort of British credits to Germany, either open or disguised. I shall appreciate receiving whatever information you may be able to obtain on the prospects for such credits as well as upon all other aspects of this subject.

Hull
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