DEPARTMENT OF STATE Memorandum of Conversation
Date: February 25, 1949
Subject: International Wheat Agreement
Participants: Secretary Acheson British Ambassador, Sir Oliver Franks E - Mr. Nitze IR - Mr. Cale
Copies to: E - Mr. Nitze EUR E - Mr. Thorp ARA ITP - Mr. Brown OI CP U EE S
The British Ambassador stated that he had received instructions from London regarding the British position on the International Wheat Agreement and had been requested to leave a memorandum with the Department on the matter. (See attachment)
In giving the Secretary this memorandum the Ambassador made the following points:
1. That he was certain that his Government would not agree to a ceiling in excess of $1.75.
2. That he thought there was some hope of getting them to agree to raising the floor in the final year by 10 cents or to $1.20
3. That he would be glad to urge his Government to agree to such a 10 cent increase in the floor if we felt this would make it possible to conclude the wheat agreement.
4. That the Head of the British Delegation to the Wheat Conference, Mr. Anderson, would probably not inform the Conference of the British position on this matter until the British had had some reaction from us on it.
To Mr. Acheson's question as to what a ceiling of $1.75 would mean to the United States Government, Mr. Nitze replied that it would involve a subsidy of from 50 to 60 cents per bushel on the wheat that the United States would export under the agreement. Mr. Nitze added, however, that it is difficult to allocate the cost of the subsidy as between the Wheat Agreement and other programs in view of the fact that the United States is already financing the exportation of large quantities of wheat to the ECA countries on a grant or loan basis. The Ambassador said that it was his Government's view that the decision of his Government as to the prices under the Wheat Agreement should be made, insofar as possible, without regard to the fact that Britain is receiving wheat under ECA.
Mr. Nitze stated that the British position would, of course, have to be considered by the Department of Agriculture, which would be primarily responsible for reaching the United States decision, but that it was his view that the position does not constitute a basis for reaching a satisfactory compromise. The Secretary stated that the Department of Agriculture would be informed immediately regarding the British position so that this Government's reply to the memorandum could be formulated promptly.
Attachment
ITP:IR:EGCale:gv