(The Department of State subsequently submitted the following statement:)

THE ATLANTIC CHARTER-ONE OF THE SOURCES OF THE ITO

In tracing the history of the development of the proposed International Trade Charter before the Senate Committee on Finance, Mr. Wilcox, Director of the Office of International Trade Policy, Department of State, mentioned, among other things, the economic clauses of the Atlantic Charter as one of the sources of this proposal. At this point some question was raised concerning the nature or validity of the Atlantic Charter.

This question no doubt arises from a misconstruction of a statement made by the late President Roosevelt in a press conference on December 19, 1944. The late President made a statement to the effect that the Atlantic Charter had not been signed as a formal document at the time (August 1941) it was agreed to by Mr. Churchill and himself. However, Mr. Roosevelt in the same press conference also pointed out that the Charter had been agreed to by the Prime Minister and himself at that time and likewise that the obligations of the Charter had subsequently been subscribed to by all of the United Nations in the Declaration by United Nations, which was formally signed at Washington on January 1, 1942.

The fact that the Atlantic Charter was not formally signed and sealed on August 14, 1941, as is customarily done in the case of treaties between nations, has no relevancy to the point which Mr. Wilcox was making before the Senate committee, namely, that the economic clauses of that historic statement of principles constitute one of the sources from which the proposed International Trade Charter draws its inspiration. Other sources or bases of the Trade Charter are found in the other documents mentioned by Mr. Wilcox, including the Declaration by United Nations of January 1, 1942 (which was signed by all the United Nations, as previously indicated) and the considerable number of master lendlease agreements, beginning with the agreement with the United Kingdom signed February 23, 1942. Article VII of the master lend-lease agreements, it may be noted, specifically reaffirms the pledge of the signatory countris directed "to the attainment of all of the economic objectives set forth in the joint declaration made on August 14, 1941, by the President of the United States of America and the Prime Minister of the United Kingdom."

(March 31, 1947.)

The CHAIRMAN. I would like to ask one question, as to what you are reading from now and what you read from the other documents, you are not claiming that they support this particular proposed organization?

Mr. WILCOX. Not in detail; no, sir. I am merely trying to trace the historical background.

The CHAIRMAN. I think it is very valuable that it be in the record, but I want to make it clear, if we are in agreement, that you are not arguing what you are reading from now and what you will read from is an endorsement of this particular organization?

Mr. WILCOX. It is not.

The relevant section of the mutual-aid agreements reads as follows

Senator BREWSTER. Is this an agreement or our active part?

Mr. WILCOX. This is the mutual-aid agreement between the United States and the United Kingdom, and the same provision was contained in others [reading]:

The settlement shall include provision 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; the elimination of all forms of discriminatory treatment in international commerce, and to the reduction of tariffs and other trade barriers; and, in gen

eral, to the attainment of all the economic objectives set forth in the joint declaration made on August 14, 1941, by the President of the United States of America and the Prime Minister of the United Kingdom,

Senator BREWSTER. Now, would it be relevant if you should insert in connection with that the provision of Lend-Lease, the statute, which seemed to either authorize or not authorize so extended an agreement? I assume that that may be one of the questions that may be raised. Mr. WILCOX. I do not have that here but it can be obtained.

Senator BREWSTER. May that be inserted? I think it would be a matter to consider in regard to whether they would go to supporting an agreement of this character.

The CHAIRMAN. It will be done.

Senator LUCAS. If I understand this correctly, all you are attempting to do is to trace the historical background of this thing from the beginning?

Mr. WILCOX. That is right.

Senator LUCAS. And nothing you are saying now definitely binds or completely supports the charter that is before this committee. It is merely tracing one thing after another and all of them put together seem to bear on the charter?

Mr. WILCOX. That is right, Senator.

I am not suggesting, as the Chairman pointed out, that these provisions bind the United States in the details of this charter at all but merely explaining the historical background of the development of the project.

Senator BREWSTER. You did not mean to indicate any doubt of the relevancy of the provision that I speak of?

Senator LUCAS. All of it is relevant.

Senator BREWSTER. I think it would, coming in at this point, support the general development.

Mr. WILCOX. The third item is the statement of purposes in Article 1 of the Articles of Agreement of the International Monetary Fund. The second point reads as follows:

To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.

Senator LUCAS. What date is that?

Mr. WILCOX. This was in 1944.

The final act, I think, was signed the first of July 1944, and adopted by Congress, I believe, in the fall of 1945.

A similar statement appears in the statement of purposes of the articles of agreement of the International Bank for Reconstruction and Development.

Article I, the third paragraph, reads as follows:

To promote the long-range balanced growth of trade and the maintenance of equilibrium in balances of payments by encouraging international investment for the development of the productive resources of members, thereby assisting in raising productivity, the standard of living and conditions of labor in their territories.

There was adopted by the conference at Bretton Woods a resolution which appears on pages 114 and 115 of the Final Act of the Monetary and Financial Conference, which reads as follows:

Whereas in Article I of the Articles of Agreement of the International Monetary Fund it is stated that one of the principal purposes of the fund is to facilitate the

expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy;

Whereas it is recognized that the complete attainment of this and other purposes and objectives stated in the Agreement cannot be achieved through the instrumentality of the Fund alone; therefore

The United Nations Monetary and Financial Conference recommends to the participating Governments that, in addition to implementing the specific monetary and financial measures which were the subject of this Conference, they seek, with a view to creating in the field of international economic relations conditions necessary for the attainment of the purposes of the Fund and of the broader primary objectives of economic policy, to reach agreement as soon as possible on ways and means whereby they may best—

(1) reduce obstacles to international trade and in other ways promote mutually advantageous international commercial relations;

(2) bring about the orderly marketing of staple commodities at prices fair to the producer and consumer alike;

(3) deal with the special problems of international concern which will arise from the cessation of production for war purposes; and

(4) facilitate by cooperative effort the harmonization of national policies of Member states designed to promote and maintain high levels of employment and progressively rising standards of living.

The CHAIRMAN. Dr. Wilcox, Senator Brewster a while ago referred to the basic authority for the negotiation of lease-lend agreements. It may be appropriate for me to read the part of that act which the Senator had in mind. I am reading from section 3 (b) of the Lease-Lend Act, Public Law 11, Seventy-seventh Congress, approved March 11, 1941:

The terms and conditions upon which any such foreign government receives the aid authorized under subsection (a) shall be those which the President deems satisfactory and the benefits to the United States may be payment or repayment in kind or property or any other direct or indirect benefits which the President deems satisfactory: Provided, however, That nothing in this paragraph shall be construed to authorize the President to assume or incur any obligation on the part of the United States with respect to postwar economic policy, postwar military policy, or any postwar policy involving international relations except in accordance with established constitutional procedure.

Senator BREWSTER. Would you agree, Doctor, that obviated any conclusions as to the effect of any agreement negotiated under that section 3 (b) as affecting in any way or as dealing with postwar problems? Mr. WILCOX. There is no question about that.

Senator BREWSTER. So the items you have quoted become the expressions of opinion of one or more individuals but constitutes no obligation of any character, legal, moral, or equitable upon the United States Government to implement the suggestions which you have been giving out here in these previous quotations?

Mr. WILCOX. I would not wish to question that statement here.
I am not trying to make the point that we are bound.

Senator BREWSTER. I just wanted to know that our minds were operating all in one.

Mr. WILCOX. The next item has to do with the Proposals for Expansion of World Trade and Employment

Senator BREWSTER. I think it would have improved your scholastic stature if you had included that in connection with your quotations. (The Department of State subsequently submitted the following statement:)

The mutual-aid agreement between the United States and the United Kingdom containing the text of article VII relating to postwar economic policy, was con

cluded on February 23, 1942. Other mutual-aid agreements containing substantially the same text of article VII were subsequently concluded.

Until April 18, 1945, that is to say, during the period in which these agreements were negotiated, section 3 (b) of the Lend-Lease Act provided as follows:

"The terms and conditions upon which any, such foreign government receives the aid authorized under subsection (a) shall be those which the President deems satisfactory, and the benefits to the United States may be payment or repayment in kind or property or any other direct or indirect benefits which the President deems satisfactory."

Effective April 18, 1945, section 3 (b) of the Lend-Lease Act, quoted above. was amended to include the following proviso: “Provided, however, That nothing in this paragraph shall be construed to authorize the President to assume or incur any obligation on the part of the United States with respect to postwar economic policy, postwar military policy, or any postwar policy involving international relations except in accordance with established constitutional procedure."

Mr. WILCOX. The next item is Proposals for Expansion of World Trade and Employment, developed by a technical staff within the Government of the United States and published in November 1945. (The Proposals for Expansion of World Trade and Employment appear as Exhibit I.)

This was the first detailed presentation of the American Proposals for an International Trade Organization. This appeared at the same time as the Anglo-American financial and commercial agreements and those agreements contained a joint statement on commercial policy in which the Government of the United Kingdom expressed its full agreement on all important points.

This is a rather long statement and I shall not try to read the whole thing.

The CHAIRMAN. Doctor, it will be in the printed record. We will see that it gets in the printed record.

Mr. WILCOX. Thank you, Mr. Chairman.
(The statement referred to is as follows:)

UNDERSTANDING REACHED ON COMMERCIAL POLICY-JOINT STATEMENT BY THE
UNITED STATES AND THE UNITED KINGDOM

The Secretary of State of the United States has made public today a document setting forth certain "Proposals for Consideration by an International Conference on Trade and Employment". These proposals have the endorsement of the Executive branch of the Government of the United States and have been submitted to other Governments as a basis for discussion preliminary to the holding of such a conference.

Equally, the Government of the United Kingdom is in full agreement on all important points in these proposals and accepts them as a basis for international discussion; and it will, in common with the United States Government, use its best endeavors to bring such discussions to a successful conclusion, in the light of the views expresed by other countries.

The two Governments have also agreed upon the procedures for the international negotiation and implementation of these proposals. To this end they have undertaken to begin preliminary negotiations at an early date between themselves and with other countries for the purpose of developing concrete arrangements to carry out these proposals, including definitive measures for the relaxation of trade barriers of all kinds.

These negotiations will relate to tariffs and preferences, quantitative restrictions, subsidies, state trading, cartels, and other types of trade barriers treated in the document published by the United States and referred to above. The negotiations will proceed in accordance with the principles laid down in that document.

The CHAIRMAN. I invite your attention to the colloquy we were having yesterday following the charge that interest in this organization was induced on the "feedbag" principle.

This organization was proposed to the British at a time when they were trying to get the British loan of $3,750,000,000. Were the proposals sort of an integral part of the loan?

Mr. WILCOX. May I make just one comment on that point, Senator? The CHAIRMAN. I am not now sponsoring the "feedbag" motive but it should be explored because we will hear about it in the Senate.

Mr. WILCOX. I believe there were preliminary conferences on the establishment of an International Trade Organization with the Government of the United Kingdom in 1943. It is true that when the discussions concerning the Anglo-American financial agreement were under way that they were an inseparable part of those discussions, this whole field of commercial policy.

The CHAIRMAN. Do you mind if I read into the record at this point. some statements from the President's twenty-second report to Congress on lease-lend operations for the period ended December 31, 1945?

On pages 8 and 9 of the pamphlet which I have, appears the following [reading]:

The lend-lease settlement with the United Kingdom was made therefore not merely as a concluding chapter of our wartime financial history but also as a part of the opening of the program of the United States to establish sound peacetime international economic relations. This program looks toward the achievement of a high level of international commerce and employment through reductions in barriers to international trade and participation in financial measures such as the International Bank and International Monetary Fund. These measures constituting part of our program for world peace will enable trade to revive and to develop in the international markets.

As part of the program a financial agreement providing for the proposed loan of 3.75 billion to the United Kingdom was negotiated concurrently with the lendlease settlement. The terms of this agreement if the loan is approved by Congress provides for removal by the United Kingdom of all exchange on current transactions with the United States for free convertibility of sterling in dollars within the sterling area within a year after approval of the loan and elimination of discrimination against the United States in respect of import restrictions applied by the United Kingdom.

In addition, while the terms of the proposed loan and of the lend-lease settlement were being negotiated, the United States secured from the British the adherence to and support of the Proposals for Expansion of World Trade and Employment.

The CHAIRMAN. Those are the proposals to which you just referred, am I correct?

Mr. WILCOX. Yes, sir.

The CHAIRMAN. I continue as follows:

This undertaking by the British will go far to assure the acceptance of these proposals by other members of the United Nations as a basis for an enlarged flow of trade among nations. Consequently, the British acceptance of these proposals can be counted as a tremendous and tangible benefit which comes to the United States as part of the lend-lease settlement in conformity of article 7 of the master lend-lease agreement. The United States and the United Kingdom have recently concluded satisfactory agreements in the fields of telecommunications and commercial aviation which were also negotiated within the spirit of article 7. While these agreements are of real benefit to the United States in respect to the future, the principal contribution from the aid furnished to the United Kingdom under lend-lease was the strengthening of the British forces for the common victory over the Fascist powers.

If what I have read has relevancy, it is to the point that this proposed organization was a part and was made a part by us of very important financial matters of vital interest to Great Britain.