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Washington has no more solemn chamber than the Governors' Room of the Federal Reserve Building, nor any graver problem than the proposed loan to Britain.

Every working afternoon at 3 o'clock Lord Halifax strides, in his stooping glide, into the Governors' Room, puts a battered, black suitcase on the conference table, and spills out documents giving the secret, depressing details of Britain's economic position. Halifax is chairman of the British delegation, but Lord Keynes does nearly all the talking. Halifax, chin in hand, listens with an air of attentive patience, occasionally lifts his eyes in amazement at Economist Keynes's memory for facts & figures. Their associate, Sir Henry Self, who looks like an Irish patriot's caricature of a hard-eyed, thin-lipped Sassenach statesman, rarely makes a remark.

Opposite them sits the U.S. team. Assistant Secretary of State Will Clayton has a cottonbroker's sympathetic understanding of world trade problems but leaves technical questions to Treasury's Harry White and Federal Reserve's Marriner S. Eccles. The man the British try hardest to win over is Secretary of the Treasury Vinson. Said a British negotiator: "We feel that when we have convinced him we have convinced the American people."

Henry Wallace bothers the British experts. They know he is sympathetic to their case, but when he closes his eyes and seems to doze, the British get uneasy. Old Washington hands could tell them that when Wallace falls into this trance-like attitude it really indicates intense interest.

One U.S. chair was vacant. President Truman had accepted Crowley's resignation (see NATIONAL AFFAIRS). Although he had been much less sympathetic to the British case than the other U.S. negotiators, the British did not welcome Crowley's departure. They feared Crowley, the martyr, would make more trouble on Capitol Hill than Crowley, the negotiator, would ever have made.

Backfire. For this and more cogent reasons, the British delegation was immersed in gloom. A Gallup poll showed a 2-to-1 "No" vote to the question: "England plans to ask this country for a loan of three to five billion dollars to help England get back on its feet. Would you approve or disapprove . . . such a loan?" British Laborites were particularly hurt to find that, while only 55% of business and professional men were opposed, U.S. manual workers rejected the loan idea by more than 3-to-1.

Obviously, the British and the U.S. Administration arguments for a loan were not getting across. Deeply moral Lord Halifax was stressing the "moral argument" (that Britain deserves a loan because of its sacrifices in the common cause). But that line, like most appeals to gratitude, had an unintended effect: it reminded Americans of their own sacrifices.

The purely economic argument offered more room for hope. The British negotiators seemed unexpectedly willing to fore-sake Empire preference and other trade restrictions and chance a return to relatively free world markets--if they could get a loan on sufficiently generous terms.

They, the People. The U.S. was just beginning to understand why the British viewed such a step as a desperate gamble: 1) if Britain abandoned Empire preference and the U.S. lowered tariffs, Britain probably could not rebuild the Empire Preference system or the sterling bloc, but an act of Congress could always raise U.S. tariff walls; 2) if Britain abandoned its present economic defenses and relied mainly on the U.S., another U.S. depression would be an even worse blow to Britain than to the U.S. Years of depression might pass before the U.S. felt grave social and political consequences; Britain would be shaken to the roots in a few months. Bled white by the war, Britain simply could not afford a major slump in foreign trade.

To the surprise of most Americans, the U.S. loan had strong opposition in England. The Beaverbrook papers were clamoring that Keynes and the Laborites were selling out the Empire. The British public, still smarting from the abrupt end of Lend-Lease, was unaware that part of the fault lay with Britain's leaders. Duly warned, they had done little to prepare the public.

Public opinion in Britain and the U.S. obviously was out of tune with the negotiations in Washington. Anti-loan opinion in the U.S. saw the whole thing as one more piece of charity. Neither Britons nor Americans thought of the loan in terms of what would happen if it was not made.

No matter what degree of friendly cooperation was attained in the Governors' Room, final agreement was still far off. Eventually the British and U.S. public would have to be taken into the negotiations, shown the connection between the loan and revived world trade, and the connection between trade and world peace.

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