Britain Makes a Pledge

The British pledged themselves last week not to take advantage of Lend-Lease by using it to maintain their foreign trade. An agreement was negotiated by British Foreign Secretary Anthony Eden and U.S. Ambassador John Gilbert Winant. The agreement was published as a White Paper, in which the British promised to limit their export business during World War II to the minimum necessary to continue the war effort.

Last week there was bitterness in Britain, for the British felt that the agreement had been necessary because the U.S. had been the victim of Nazi propaganda. But they realized that if the U.S. loses faith in their integrity, the British will lose the war.

The White Paper also denied misuse of Lend-Lease materials, answering such charges as:

> That the British exported specific Lend-Lease materials received from the U.S., or similar commodities, or commodities (like aluminum) in which there is a U.S. shortage;

> That they used oil tankers (transferred from the U.S.) to export oil to other nations ;

> That they advertised (in the U.S. as well as in neutral countries) products made of steel, rubber, and other strategic materials which U.S. manufacturers were unable to get;

> That their agents in the U.S. charged to Lend-Lease accounts such items as food, wine and telephone bills (TIME, Sept. 8).

But the U.S. officially was rejecting the theory, popular with some U.S. businessmen, that Great Britain's trade must be hopelessly crippled before U.S. help is given. The agreement was based on the principle that the British must maintain about two-thirds of normal export trade in order to get vital foreign exchange to buy materials unobtainable in the U.S.

And it is obviously to U.S. advantage to have Britain pay for as many of her necessities as possible by exports, rather than need everything as a gift from the U.S.

Yet British industries, which have already absorbed some shrewd body blows, will now have to take more punishment under the agreement. Example: no British paint firm may now offer in any world market any paint which contains zinc (imported from the U.S.). Last week a paint company which had done business in England for 120 years closed up.

Trade repercussions may be vast, and South American complaints may soon pile up. Example: Argentina buys British machines, British tools, British steel, and pays for them in wheat and beef. Under the new agreement, much of this exchange must stop. Argentina will get U.S. steel, machines, tools--if she can get U.S. priorities. (Some priorities for Latin America have already been granted.) And the U.S. cannot be paid in wheat and beef. What then? Henry Wallace's Economic Defense Board is likely to sit many months before this problem is solved.

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