APPENDIX 7 April 11, 1941 [Memorandum, Pasvolsky to Under SecretaryWelles] I have the following suggestions: 1. The time seems to be opportune for reviving the Advisory Committee on Problems of Foreign Relations. 2. The Committee should be reconstituted as a single body, rather than as a large group subdivided into three sub-committees. 3. The Committee should continue to be under your chairmanship, and a new vice-chairman should be appointed to replace Hugh Wilson." 4. The Committee should, at this stage, have the following principal functions: a. To resume and continue the discussions which were begun last year after your return from Europe on the subject of the organization of peace. I expect that the Division of Special Research will be in a position to place before the Committee, as a basis for its discussions, appropriate documentation and analyses of proposals put forward from various quarters. b. To review plans for economic action as they are worked out by the Interdepartmental Group to Consider Post-war International Economic Problems and to direct negotiations on this subject with Great Britain and other countries as and when such negotiations are undertaken. In this connection, it will be necessary to reorganize the Interdepartmental Group to make it more effective for the purpose in view. 5. The following, in my opinion, should, in one way or another, be associated with the work of the Committee: Mr. Welles Mr. Berle Mr. Acheson Mr. Norman Davis Mr. Hackworth Mr. Hornbeck Mr. Dunn Mr. Pasvolsky Mr. Long Mr. Feis Mr. Duggan Mr. Atherton Mr. Savage Mr. Reber Mr. Edminster All of these, I think, would have something to contribute. Alternatively, it might be possible to constitute the first eight persons on this list (or, perhaps, a somewhat differently constituted group) as regular members and to bring in from time to time, as subjects come up which are of special interest to them individually, such of the others-and, perhaps, still others whose names do not appear here as would have a special contribution to make with respect to any particular subject. Retired Jan. 1, 1941. APPENDIX 8 A. July 28, 1941 B. February 23, 1942 [A. Draft of Article VII of a "Lend-Lease" Agreement Approved by the President for Discussion with the British Government; Handed by Assistant Secretary Acheson to John Maynard Keynes July 28, 1941] ARTICLE VII "The terms and conditions upon which the United Kingdom receives defense aid from the United States of America and the benefits to be received by the United States of America in return therefor, as finally determined, shall be such as not to burden commerce between the two countries but to promote mutually advantageous economic relations between them and the betterment of world-wide economic relations: they shall provide against discrimination in either the United States of America or the United Kingdom against the importation of any product originating in the other country; and they shall provide for the formulation of measures for the achievement of these ends." [B. Text of Article VII of the Mutual Aid Agreement between the Governments of the United States and the United Kingdom, signed and sealed at Washington February 23, 1942. Identical text in subsequent agreements made under the Lend-Lease Act of March 11, 1941] ARTICLE VII "In the final determination of the benefits to be provided to the United States of America by the Government of the United Kingdom in return for aid furnished under the Act of Congress of March 11, 1941, the terms and conditions thereof shall be such as not to burden commerce between the two countries, but to promote mutually advantageous economic relations between them and the betterment of world-wide economic relations. To that end, they shall include provisions for agreed action by the United States of America and the United Kingdom, open to participation by all other countries of like mind, directed to the expansion, by appropriate international and domestic measures, of production, employment, and the exchange and consumption of goods, which are the material foundations of the liberty and welfare of all peoples; to the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other trade barriers; and, in general, to the attainment of all the economic • Department of State Bulletin, VI, 192. objectives set forth in the Joint Declaration made on August 12, 1941, by the President of the United States of America and the Prime Minister of the United Kingdom. "At an early convenient date, conversations shall be begun between the two Governments with a view to determining, in the light of governing economic conditions, the best means of attaining the above-stated objectives by their own agreed action and of seeking the agreed action of other like-minded Governments." APPENDIX 9 September 12, 1941' Proposal for the Organization of Work for the Formulation of Post-War Foreign Policies 1. The task of formulating post-war foreign policies, which involve, of course, this country's attitude toward and participation in the organization and maintenance of peace and the promotion of sound international economic relations, relates to three groups of problems, as follows: a. Political and territorial arrangements; b. Armament arrangements; c. Trade and financial relations. These problems are closely interrelated and can be considered fully and adequately only under some unified auspices and well-defined leadership. 2. Policies with regard to these problems are of concern to several departments and agencies of the Government. Among these, however, the Department of State has, by the very nature of the problems themselves, always had and has today by far the greatest share of responsibility. Problems relating to political and territorial arrangements fall predominantly into the province of the Department of State. They cannot, however, be usefully considered apart from the other two groups of problems. Problems relating to armament arrangements, while they concern the War and Navy Departments on the technical side, fall into the province of the Department of State on the all-important diplomatic side. Moreover, they cannot usefully be considered apart from the problems relating to political and territorial arrangements. Trade and financial relations, while they concern several departments and agencies of the Government, similarly cannot usefully be considered apart from the problems relating to political and territorial arrangements and, in somewhat lesser degree, the problems relating to armament arrangements. Moreover, on the all-important negotiation side, economic problems fall predominantly into the province of the Department of State. While it is thus clear that many departments and agencies of the Government should participate fully in the work of formulating an effective program of foreign policy designed to implement the principles expressed in the eight points of the Roosevelt-Churchill statement, it is equally clear that the task involved logically requires that leadership in the preparation of such a program should be 'Memorandum, Pasvolsky to the Secretary (Hull), transmitting memorandum of same date not printed. exercised, under the President, by the Department of State, or, more specifically, by the Secretary of State. 3. The Department of State, recognizing its primary responsibility in this field, has, since the outbreak of war in Europe, taken some steps to meet this responsibility. In January, 1940, a departmental Advisory Committee on Problems of Foreign Relations was established. It was made up of officials of the Department and two prominent persons outside the Department. It was active for several months, but has been inactive since. In May, 1940, the Department took the leadership in organizing an informal Interdepartmental Group to Consider Post-War International Economic Problems and Policies. This Group, which is still in existence, brought together, under the chairmanship of Mr. Pasvolsky, experts of the Departments of State, the Treasury, Commerce and Agriculture, the Tariff Commission, the Federal Reserve Board, and the Army and Navy Munitions Board. In the summer of 1940, when the Group was working on an economic program for the Havana Conference, its meetings were attended also by experts of the Reconstruction Finance Corporation, the Export-Import Bank, and the Commodity Credit Corporation. The Group has been inactive for the past few months, partly because of the increasing preoccupation of the various departments and agencies with current problems and partly because of the inherent difficulty of carrying on work of this kind on a purely informal basis. In February, 1941, there was set up in the Department a Division of Special Research, charged, among its other duties, with the conduct of studies in the field of post-war problems. The Division has been increasingly active in this field. Finally, the Department has had very useful cooperation of the Council on Foreign Relations and of other groups outside the Government working in this field. There is clearly a need now for expanding the Department's own work and its leadership in the entire field. As matters stand today, several departments and agencies of the Government are carrying on programs of study in the economic field, more or less sporadically and independently of each other. Moreover, in the Executive Order of July 30, establishing an Economic Defense Board under the chairmanship of Vice President Wallace, the Board was directed (Article 3, paragraph 3) to "make investigations and advise the President on the relationship of economic defense measures to post-war economic reconstruction and on the steps to be taken to protect the trade position of the United States and to expedite the establishment of sound peace-time international economic relationships." Under these circumstances, there is grave danger that work with respect to post-war economic policies will either be done independently by several agencies of the Government or else that it will be coordinated under other leadership than that of the Department of State; will be hopelessly intermingled with the consideration of war problems, since the emphasis in the Economic Defense Board must of necessity be on war rather than on post-war questions; and will be carried on in more or less complete isolation from work on the other groups of problems and policies involved in post-war reconstruction. This latter work must necessarily be done by the Department of State, although even here there is some danger that independent activities along these lines might be undertaken by Colonel Donovan's organization, again resulting in an intermingling of war and post-war problems. The fact that the Department is represented on Vice President Wallace's Board can scarcely create for it an adequate position of leadership or provide for sufficient integration of the entire work in its several phases (political, territorial, armament, economic). If ultimate confusion and loss of valuable time are to be avoided, the task of formulating post-war foreign policies should be safe guarded from being subordinated to the work involved in meeting current war problems and should logically be organized under the formal and active leadership of the Department of State. 4. This can best be done in one of two ways, as follows: A. For the President to announce publicly that he has assigned to the Secretary of State primary responsibility for preparatory work on all phases of post-war foreign policies, with authority to appoint an Advisory Committee on Post-War Foreign Policy under his own chairmanship, or a chairman of his designation, and to set up such working facilities as he might find desirable. B. For the President to appoint an Advisory Committee on Post-War Foreign Policy, designating the Secretary of State as Chairman and empowering him to create the necessary organization. Plan A is far preferable to plan B, and there exists a good precedent for it. This is what was done very effectively in the case of the Trade Agreements Program. There is even more cogent reason for it in this case because of the greater variety of the problems involved and the greater measure of responsibility developing on the Department of State with regard to these problems. 5. In either case, it would be highly desirable that Vice President Wallace should be a member of the Advisory Committee. Accordingly, the Committee might be made up as follows: Secretary of State, Chairman Under Secretary of State, Vice Chairman to act as an alternate for the Chairman when necessary Vice President Wallace Four or five prominent persons outside the Department of State Four or five officials of the Department of State One of the Department of State members of the Committee should be designated as its Executive Officer and be charged with responsibility for the administrative phases of the work and for the coordination of the research and other activities needed for the functioning of the Committee itself and of its subcommittees. 6. The Advisory Committee should operate through three subcommittees as follows: Political and Territorial Problems. This subcommittee should consist of some members of the Advisory Committee, the Political Advisers of the Department of State, and possibly some additional members. Armament Problems. This subcommittee should consist of some members of the Advisory Committee, some competent officers of the Department, and, at some stage, of representatives of the War and Navy Departments. Subcommittee on Economic and Financial Problems. This subcommittee should be entirely interdepartmental in character and should consist, in addition to some members of the Advisory Committee, of competent officials of the Departments of State, Treasury, Commerce and Agriculture, as well as of the Tariff Commission, the Federal Reserve Board, and, perhaps, other agencies. It should be in close contact with agencies, within and outside the Government, working on domestic post-defense problems. The subcommittee should replace the existing informal interdepartmental group. 7. Under this arrangement, the Advisory Committee would be the central guiding and coordinating body, while the subcommittees would be responsible for work in their respective specialized fields. The research work and the drafting of memoranda and documents would be done by the Division of Special Research |