Foreign Relations of the United States Diplomatic Papers, 1937, General, Volume I

500.A19/61

Memorandum by the Secretary of State

Washington , March 5, 1937.

The Canadian Prime Minister, Mr. Mackenzie King, who is visiting the White House upon invitation of the President, came to the State Department and spent an hour in my office. After an exchange of the usual civilities, I inquired as to what he thought of present trends in world affairs and the underlying forces most influencing them. He promptly replied that he was very discouraged about the outlook in Europe; that conditions were continuing very confused and improving but little, if any, in numerous ways while they were becoming worse in other ways. He made some reference to Germany, and I thereupon handed him, to read in confidence, a most interesting cable of March 4, No. 38, 4 p.m., from our Ambassador in Berlin. He read it with keen interest and pronounced it absolutely amazing. I then took this as a basis for my further remarks, which I am sorry to say were continued without interruption by the Prime Minister, except to frequently nod his assent and often to express his entire agreement. I remarked that I had sought conferences with numerous important people from countries in Europe with the view to exchanging ideas and information with them touching present trends, especially in the western world affairs; that these included numerous persons of unusual ability and a few statesmen such as Lord Lothian,⁶ Mr. Walter Runciman⁷ and others. I said that I might illustrate the nature of these conversations by my talk⁸ with Mr. Runciman; that Mr. Runciman had first answered my inquiry about conditions abroad by remarking that they, the British, were waiting to see what Germany was going to do, and I had replied that apparently different groups were waiting to see what each was going to do, with the result that no movements or progress along peaceful lines were now being even undertaken, but that instead most nations were arming to the teeth, ostensibly for self-defense. I said, “I realize fully the vastly more complicated and difficult problems and conditions facing the nations of Europe than any that immediately face the nations of the Western Hemisphere; but I might give some illustration of what I have in mind by citing recent developments in this Hemisphere.” I then said that until three years ago the twenty nations to the south of us were not speaking to us except as a matter of strained courtesy, and that if we had sat still as some of our good friends were now doing in the different countries of Europe, waiting to see what each other might say or do in the future, we on this continent would not be on speaking terms today. I went on to say that we had proceeded resolutely to prepare a broad and basic program, which contemplated the restoration of numerous, vitally important and indispensable international relationships, which had hitherto been abandoned or neglected or repudiated and so had become quiescent or dormant; that again we did not stop or sit still, but proceeded with all the energy possible to preach, day and night so to speak, from here to Cape Horn the doctrines and policies embodied in this program, to practice them as rapidly as possible and to urge other countries to practice them; that, as a result, when the delegates from these twenty-one nations recently met in Buenos Aires⁹ there was revealed a state of absolute confidence in each other, a spirit of genuine friendliness, and a wholehearted disposition for teamwork and cooperation to proclaim the policies and proposals in the program and to carry them into effect; that the program embraced more than a half-dozen basic, indispensable, international relationships. I remarked that the structure of international law had been undermined and much of this law flouted in many parts of the world. This, I said, the Buenos Aires Conference preached anew—the whole spirit that underlies the law of nations and the great necessity for nations everywhere to cooperate to reestablish international law in all of its vigor; that at the Conference the principle of non-intervention was proclaimed to the world, along with the doctrine of sovereignty, equality and territorial integrity for all nations, small as well as large, and called for international cooperation for the maintenance everywhere of this great principle; that the Conference preached the spirit that underlies all moral concepts and urged the restoration of international morals as the only foundation for ordered and orderly relations between nations; the necessity for the development of a disposition and a will to reassert and scrupulously to observe the sanctity of international understandings and agreements was reasserted and proclaimed both to the nations of this continent and those of the world and their cooperation earnestly urged; the adoption by all important countries of liberalized commercial policy and a suitable program for economic rehabilitation was made the subject of speeches, declarations and resolutions of the convention; and that this major objective and the program for its pursuit was strongly put forward as the central point in any sound and adequate program for political, economic, social and moral recovery; further cooperation to extend exchange stability was considered a part of any suitable program for normal economic restoration; and, finally, the Conference devised and set forth elaborate and practical programs and concrete machinery both for the promotion and preservation of peace; that these were the chief definite and substantive and all-important provisions of a basic program of restoration and recovery.

I then said that if some important country in Europe would proclaim this program—Great Britain for instance—the Scandinavian countries would at once get behind it, as would the countries from Switzerland to Holland, some of the Balkan countries, possibly Poland, and certainly the twenty-two American nations on this Hemisphere, with the result that more than 30 nations would be marching across the Western world proclaiming a broad, concrete and basic program for the restoration of international order, the promotion and preservation of peace, and the economic well-being of peoples everywhere; that the entire moral influence and the tremendous economic influence of all these nations, thus insisting upon a peaceful course of settlement and readjustment and rehabilitation, would be exerted upon any country not disposed to join in support of such program; that such country could no longer question the good faith of any of the nations pursuing this peaceful program nor their evident desire to establish fair and friendly relations in every essential respect, with the result that all of the important nations would, in all probability, join in such broad and wholesome movement; that if for the time-being some should refuse to do so, the more than 30 nations formulating and supporting such program as I had described, would in any event have been doing the wisest and most profitable thing for themselves and for the world. I said, “If Great Britain tomorrow should proclaim her support and her leadership, as she could, it would literally thrill the world and especially the peace forces and the forces of law and order and morals and religion everywhere.” I then said that it did seem clear to me that the present picture in Europe—in which each country was simply arming on a huge scale professedly for self-defense, with no serious talk or movement in the direction of peace or the restoration of normal international relationships—omitted two angles in appraising future developments; that one of these was the inevitability of an economic collapse within another two years in the light of the wholly unsound economic structure, which was made more unsound by the immense program of armaments and military expenditures; that if each nation continued to sit behind its own economic breastworks and fortified on a huge scale for self-defense militarily, such an economic cave-in would most seriously dislocate all domestic economic structures, just as the panic of 1929 wrought havoc from country to country until it spread throughout the world; and that the second angle was the manifest and patent fact that if all nations simply arm and sit back awaiting future developments in international affairs, with the channels of international trade almost dried up relatively speaking, and with no opportunity for many nations to procure their actual necessities, as in the case of Germany, this country of 70 million people would some day become sufficiently hungry and sufficiently without clothing as to create a state of desperation, with the result that from one to two million Germans, well trained and fairly well armed, would start on the march, probably to the south. I said, “Then what would Great Britain and other countries who had been sitting back arming, merely for self-defense, do about such a dangerous development with its inevitable possibilities of ever-increasing danger?” I said that some of our British friends back yonder in discussing economic programs had remarked that they preferred first to see what Italy was going to do; that they had discovered what she was going to do, and then they proceeded to prepare a great program of armaments, which was being steadily enlarged in Great Britain to this day. I added that some of my British friends now said that they were waiting to see what the Germans were going to do. I said that the time had passed, in my judgment, when nations could look out over the field of difficulties and problems ahead and single out, from time to time, some one of them and treat it as a separate, detached, unrelated phase of present difficulties which had to be solved, and make any progress in dealing with such single problems; that they had become so interrelated, and international conduct and practices and conditions had become so abnormal and chaotic, that it would be necessary for the important nations first to make up their minds that they must cooperate with each other in support of a comprehensive and basic program containing most of the essential tasks and difficulties to be dealt with to the extent that the nations could consistently cooperate in their solution, while the political phases would naturally be dealt with regionally or by the countries of Europe collaborating and conferring among themselves; that when the nations visualize the utter hopelessness and the disastrous possibilities inevitably ahead if they continue to pursue their present policy of narrow, discriminating and trouble-making methods of trade, accompanied by increasing races in vast armaments, and by a policy of the worst brand of militarism, and determine definitely, deliberately and irrevocably to pursue such a program of peaceful restoration and rehabilitation as I had described, then they could be counted upon to have faith in each other, to develop wholehearted friendliness towards each other, and to collaborate and cooperate to the extent consistent with each other’s domestic policies in the great movement and program for the restoration of economic well-being and of peace. I elaborated somewhat on these views, and then said to the Prime Minister that I and most of those with whom I had counselled and collaborated and worked were primarily and para-mountly concerned with the great major undertaking as embodied in the program already outlined; that it was indispensable for the preservation and promotion of peace and the avoidance of war, or at least an economic cataclysm; and that economic rehabilitation, as stated, would have to be the central point in such program. I then reemphasized that the first essential and practical step was a broad and basic program, as already indicated; that the entire spirit underlying each substantive provision in such program must be revived; and that all the nations interested must gradually develop a disposition and a will to collaborate and cooperate in the definite and unwavering support of the program. I said that so long as neither individual nor concerted effort in such a general undertaking was either attempted or seriously in the mind of countries, in Europe for example, it was inevitable that the nations of Europe each month would hear more distinctly the roar of the military Niagara, in which direction they were steadily moving; but that when nations once made up their minds to form and pursue a broad and basic program, each would find numerous ways to solve, or aid in solving, what today appeared to be difficult, if not insoluble, problems; that the broad course I had indicated was the only alternative to the present helpless and hopeless drift of uncontrolled conditions in Europe.

I again emphasized the view of my Government that now there was not a moment of time to lose, that it might even be too late from the standpoint of military or economic catastrophes; that it was all-important, therefore, that a great concerted movement behind such a fundamental program as I had described should be immediately launched. I stated that it was impossible to visualize the profound impression and the tremendous awakening of the forces of peace and of ordered and orderly relationships among nations, which a great procession of more than 30 civilized nations across the western world would create, by proclaiming the sound, wholesome and basic program for all phases of restoration, revitalization and rehabilitation of the international life of the world, such as had been defined.

I then said to the Prime Minister that some days ago Canadian Minister Marler had inquired of me whether I had anything to say about Empire preference, in connection with a program of liberalized commercial policy for the purpose of restoring the normal processes and volume of international commerce and finance; that I had replied that the single, great major objective of economic peace—moral, social and political restoration and rehabilitation under a system of planning and of support such as I had just described—was the all-absorbing matter and the matter of supreme consideration. I went on to say that if and when a nation or group of nations should make up its or their minds to join in carrying forward this broad program, they could be absolutely depended upon to so adjust their individual economic policies as to conform to the fundamental principles of economic liberalism which lie at the base of sound and normal international economic relations and of their achievement; that nations supporting the broad objective would, on their own initiative, proceed to set their own economic houses in order and make their policies conform to the general policy of reducing or removing excessive restrictions and obstructions to the reasonable flow of international commerce and finance; and that they would, if I might say so, proceed as did this Government when it launched the broad reciprocity program and on its own initiative immediately attacked and proceeded to lower the unreasonably high rates of the Smoot-Hawley tariff structure. I said further that if trade obstructions, whether in the Smoot-Hawley tariff¹⁰ or in Empire preference, were unreasonably high and had the effect abnormally and excessively and arbitrarily to divert commerce, from its usual and natural channels, to entirely artificial channels, I had faith that the nations concerned could be absolutely depended upon to deal with such excessive restrictions and restraints as a part and parcel of their plans and activities in support of the program for world economic rehabilitation; and that compared with the vast increase in trade among nations generally that would thus follow, the effects of individual trade agreements, in my judgment, were of a wholly minor and almost insignificant nature. I continued that if nations were to forget the big economic objective and to lapse back to the low level of nothing but bilateral jockeying, bartering and bargaining for microscopic trade advantages, with no concern about the international economic situation—a course being pursued today by most countries in Europe—then there was nothing ahead except a repetition of something approaching the economic collapse of 1929, as already indicated by me; and that in the light of these patent considerations I was making my appeal to statesmen in the capitals of every civilized country that they embrace this broader viewpoint.

I then remarked that I had said to my friend Mr. Runciman that while in South America I sought to organize some of the nations behind Great Britain’s leadership for the betterment of the economic situation, but that in each instance I was informed that they did not know which way Great Britain was moving. I stated that I had then added to Mr. Runciman, that, to be entirely candid, I myself was convinced on viewing the entire series of British acts and utterances that his Government was actually moving backward further towards the extremes of economic nationalism, instead of forward towards economic recovery; that I agreed that so long as her great housing program and her great program of military armaments were being carried out, Great Britain would feel no serious economic pains, except from the possible effects of high inflationary prices; but that this economic condition would be short-lived, and that from the long-view standpoint this present policy would be equivalent to sowing the winds and later reaping the economic whirlwinds. I said that the exports of Great Britain to the world outside the Empire from 1934 to 1936 had increased scarcely 50 million dollars, and that for the British Empire to shut itself up economically, by extreme or embargo restrictions, the effect inevitably would be to reduce the sum total of world trade and correspondingly to obstruct its progress and expansion through the efforts of the other nations of the world. The Prime Minister interjected from time to time that Canada supported the viewpoint I was expressing and illustrating.

When I reached this stage and before I had quite concluded, notice was sent in that the Prime Minister was due at the White House. He thereupon arose, expressed his genuine interest in the views I had outlined, and requested me to send him copies of my recent speeches at Buenos Aires and here, in order that he might examine them while he was taking some relaxation in this country. He finally said that he expected to go to London soon and that he might be of some aid in advancing this broad program while there. I very earnestly expressed my appreciation and added that in my unqualified opinion he had the opportunity of ten lifetimes to render service on a vast scale and of a most historic character.

C[ordell] H[ull]

6. Philip Henry Kerr, British diplomat.
7. President, British Board of Trade.
8. See vol. ii, pp. 1 ff.
9. See Foreign Relations, 1936, vol. v, pp. 3 ff.
10. Approved June 17, 1930; 46 Stat. 590.