V. Other Factors in International Economic Relations VI. General Machinery of International Action VII. Problems of the Transitional Process VIII. Contributions of Policy to be made by the United States in the Various Fields on Condition that Appropriate Policies would be adopted by other Countries NOTE: In the initial stages, Sections VII and VIII would have to be worked out on the basis of various assumptions. APPENDIX 4 February 29, 1940 [Memorandum, Pasvolsky to the Secretary (Hull)] The following plan appears to offer the most feasible method of securing interdepartmental cooperation in connection with our economic consultations with neutrals: A special interdepartmental committee should be created, to be known as Interdepartmental Advisory Committee on Economic Consultations with Neutrals. It should consist of representatives of the Departments of State, Treasury, Commerce and Agriculture, the Tariff Commission and the Export-Import Bank. As need arises, other Departments or Agencies might be invited to send their representatives. The committee should be under Department of State chairmanship and should have the following functions: 1. To draw up a formulation of our position as regards the implementation of the policies broadly set forth in our initial statement to the neutral nations, especially with respect to the specific policies and actions which we might, under appropriate conditions, be willing to pursue; and to make recommendations with respect thereto; 2. To consider replies and comments of a substantive nature received from the other governments with the view to determining our position with respect to them, and to make appropriate recommendations; and 3. To engage in, or arrange for, necessary studies in connection with the above. For the purpose of carrying out the third function, the committee should, from time to time, set up small subcommittees to deal with specific topics. The committee should be created for the special purpose of aiding in the conduct of consultations with other nations as to future economic arrangements. It should work in close contact with existing permanent committees in the various fields, which would, naturally, continue to carry out their normal functions. For example, it should refer all questions involving our basic commercial policies to the Executive Committee on Commercial Policy; all questions of trade-agreement arrangements and technique to the Committee on Trade Agreements; etc. If you approve this plan, I would suggest that you discuss the matter in a broad way with the Secretaries of the Treasury, Commerce and Agriculture. I attach a memorandum of suggestions for such conversations.3 2 Not printed. APPENDIX 5 May 1, 1940 Memorandum [by Hugh R. Wilson] Arising From I shall endeavor to set down subsequently a summary of the type of agreement which, in the opinion of the conferees, seems the most practical, but before doing so, think it advisable to make certain explanatory remarks. The questions of naval limitation or regulation and blockade were discussed at some length, most of us feeling that unless some solution of the naval problem is found, any suggestion as to land and air forces is unlikely to succeed. I need not enlarge on this discussion, it will be remembered by the participants. Also the discussion brought out the fact that to achieve disarmament and a force to make it effective, some machinery for political decision must exist, and that responsibility for the operation of an international force must rest with this body and not with an individual. The project follows: 1. Political Body (regional in character) Some explanatory remarks are necessary. It seems clear that there must be in Europe such derogation to the sovereignty of states as will make for quick and decisive action by the body. This involves the abolition of the rule of unanimity. But the practical power will reside, as always, in the hands of the Great Powers unless, which is unlikely, we can conceive of a Federated Union along the pattern of the United States. Hence in some form, perhaps in that of an Executive Committee, the Great States must be able to consult at once and decisively. There are obvious economic advantages to be gained by the establishment in Europe of various blocs or free trade groups of states. There are political advantages as well which might flow from such formations, and if we consider each bloc as a political unit for the purposes of European administration it is possible to see a type of Executive Committee or Political Body which might function provided sovereignty could be curtailed to a point of agreement by each bloc to abide by a majority or two-thirds decision of the members of the body. The blocs might be distributed as follows: (1) Great Britain (2) France (These two nations may or may not serve as separate blocs, in accordance with their post-war political development) (3) Italy (4) Germany (5) Iberian Peninsula (6) The Oslo group (7) The Eastern Baltic States and Poland (8) The Danubian States (Bohemia-Moravia, Slovakia, Hungary, Yugoslavia) (9) The Balkan States (Rumania, Bulgaria, Greece). The Political Body might consist of one member from each of these groups. The presidency might rotate each year in accordance with the precedent of the Federal Council of Switzerland. • Addenda papers not printed. The Political Body should exercise several functions either directly or by delegation to appropriate agencies. (a) Reference of justiciable cases to the Permanent Court (as below). (b) The functions of mediation and arbitration of disputes not arising under law, or those brought about by changed conditions. This is the safetyvalve function and is proved indispensable by the experience of the past twenty years. (c) Providing for treaty revision. (d) To consider action on decisions reached and forwarded by the Permanent Disarmament Commission (see below). (e) The power to issue command for action to the International Force. (f) To consider reports from the Permanent Group (as below) and take appropriate measures. 2. Permanent Court of Justice There should be a court of justice, perhaps the Permanent Court, to handle Justiciable cases. The rules and constitution of the Permanent Court, however, would have to be modified to fit altered circumstances arising from the For instance, the dependence of the Court upon the League Council might have to be severed. war. 3. Permanent Group There should be established a permanent group whose duty it would be to watch over events in the various countries and to announce to the Political Body any situation, together with recommendations for its treatment, which in the judgment of the group is likely to become acute and to lead to disturbance. The group should consist of selected individuals rather than government appointees, recognized for their wisdom, character and experience. The group should have wide powers for travel and investigation and perhaps for the maintenance of representatives in the various countries to furnish periodic reports of conditions. 4. The International Force (regional in character) An international force shall be constituted under the following conditions: (a) It shall consist of bombing planes and fighting planes for their protection. (b) It shall be established at suitable strategic points either upon neutral soil, or, if this prove impracticable or inadvisable, upon internationalized soil, islands perhaps. (c) Its personnel should be recruited from small neutral states. (d) There should be a commander and several successors, all of neutral states, who have supreme authority as to operation but are subordinate to the Political Body as to the decision to begin operations and against which state to begin. (e) Plants for production of such planes should also be situated in the neutral or internationalized zone. (f) Contributions for the creation and maintenance of the force should be made immediately and for a considerable period in advance, say ten years. 5. Disarmament Provisions (primarily regional but with possible participation, for limited purposes, of states of the world). (a) Abolition of bombers and prohibition of manufacture thereof, prohibition against bombing. (b) Abolition and destruction of all mobile weapons of greater calibre than can be carried by a man or a horse twenty miles in twenty-four hours. (c) Limitation on fighting and observation planes. (d) Limitation on recruits (number and length of service). 6. Permanent Disarmament Commission (primarily regional but with possible participation, for limited purposes, of states of the world). A permanent disarmament commission should be set up for the purpose, (a) of continuing the study of disarmament methods and their application over and above those provided for in the disarmament agreement (b) of verifying the operation of the disarmament agreement, both through reports and by means of inspection on the spot (c) of watching import and export of arms, chemicals, et cetera, including inspection of factories for arms production in countries parties to the agreement (d) of reporting to the Political Body any infraction of agreement (e) of summoning the Political Body into being immediately in the case of serious infraction. 7. Technical Commission (worldwide in scope) A permanent technical commission should be set up for the purpose, (a) of study of trade policy, credit and monetary policy, international public projects, transportation, public health, intellectual cooperation, social problems, et cetera (b) of examining the operation of existing agreements, and (c) of arranging for negotiations of new agreements and making recommendations to the governments for changes necessitated by altered conditions. APPENDIX 6 December 18, 1940* Interdepartmental Group To Consider Post-War Economic Problems and Policies ORGANIZATION OF WORK The Group is an interdepartmental committee whose function it is to organize, direct, and review studies bearing on the problems of post-war international economic relations, especially from the viewpoint of possible alternatives of foreign economic policies for the United States. It works or proposes to work through the sub-committees indicated below. The sub-committees already set up and at work are marked with an asterisk. I. Sub-committees on Regional Studies The function of these sub-committees is to study several regions from the viewpoint of the economic aims and current economic practices of the nations respectively predominant in each of the regions, as well as of the economic structure * Memorandum of agreed views reached in meeting of group Dec. 17, 1940. and possibilities of each region under various assumptions as to the outcome of the war. The regions selected are as follows: 1. Germany and the Continent of Europe* 2. Japan and the Far East* 3. Soviet Russia* 4. The British Commonwealth* 5. The United States and the Western Hemisphere II. Sub-committees on Commodity Studies The function of these sub-committees is to prepare studies of world production, trade, and consumption of the principal basic commodities as of the pre-war period, and to examine the possibilities of alterations in the pre-war statistical picture in the areas which are the subjects of regional studies as a result of three types of policy: intensification of existing production or development of new production; substitution; regulation of consumption. The commodities or groups of commodities selected for study are as follows: 1. Foodstuffs, fats and oils* 2. Fibres* 3. Rubber, hides and skins* 4. Coffee, tea, cocoa, spices, tobacco* 5. Metals* 6. Fuels* 7. Lumber, pulp and paper* 8. Chemicals and other non-metallic mineral raw materials* III. Sub-committees on Subject Studies The function of these sub-committees is to prepare memoranda in each of the selected fields giving a description and an appraisal of the various systems and policies practiced or proposed in recent years. The fields selected are as follows: 1. Commercial Policy* 2. Monetary and Financial Policy 3. Transportation 4. Population Movements. IV. Sub-committee on Alternatives of Foreign Economic Policy for the The function of this sub-committee, which is to be set up later, will be to utilize the materials prepared by the other sub-committees for the purpose of setting forth and appraising the various alternatives of desirable and feasible foreign economic policies which are likely to be open to the United States on the basis of various assumptions as regards both domestic and international considerations and with respect to both long-range objectives of policy and the immediate post-war situation. For explanation of asterisk, see text above. |