95/   H   /» ^0
BRITISH EMBASSY,
WASHIBGTOH D.C.
Augam* 22nd 1939 •
Lord,
Since the adjournment of Congress, on
which I had the honour to report in my despatch
No.871 S of August 8th, the usual summer political
lull has set in.     The President has gone cruising
off the coast of Nova Scotia and the Secretary of
State and other important Cabinet officers are absent
from Washington*   Nevertheless the newspapers with
their ominous reports from Europe are keeping
political Interest aliye rather more than usual ID
August*   There are significant items to disturb the
mind of holiday makers such as the appointment of
the war Resources Board referred to in my despatch
No.912 of August 15th.   This Board, headed by
Edward R. Stettinlus Jr., Chairman of the Board of
the United States Steel Corporation, will advise
the Army and Navy Munitions Board on the "mobilisation
of the economic resources of the country in the
event of a war emergency and in reviewing and
perfecting the plans already under preparation".
Another reminder to the public that neutrality
bills in themselves may not suffice to keep the
peace is to be found in a "Gallup poll" held last
week which asked.-
(1) If England and France have a war with
Germany and Italy, do you think the
United/
The Right Honourable
RCL:VALM:MS
The Viscount Halifax, K.G.,
etc., etc., etc.

United States will be drawn in?
To this question three persona in iter bad a definite
answer, which was "Tea* from 76jf and "No" from 2A$.
The second question stated was:-
(2) If England and France go to war 5?S
with Germany and Italy, what do
you think our country will dot
The reply of 25% was that America, would send troops,
40% thought she would send war material, and the
remaining 35# thought she would attempt, at least
at the beginning, to take a neutral position*
2* Before Mr. Roosevelt left for his cruise
be took the opportunity, when signing a bill
creating a personnel officer for the Federal Courts,
of issuing a statement claiming that this action marked
the final objective of the comprehensive proposals
for judicial reorganization which he had made to
Congress on February 5th, 1957*   He claimed that
the country was naturally concerned with the
attainment of proper objectives rather than any one
of the possible methods proposed for the accomplish-
ment of the end* (For this statement he was severely
taken to task by the "New York Times" which points
out that the history of the last decade has nothing
more terrible to teach than that the end cannot
justify the means)*   Mr. Roosevelt went on to claim
that six of the reforms recommended by him two years
ago had been enacted into law and the seventh had
been accomplished through the opinions of the Supreme
Court Itself. This of course referred to the fact
that the Court now no longer impedes social and
economic/
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economic reforms.   This change has in point of fact
been accomplished by the law of nature owing to the
retirement or death of four of the older Justices,
and if Mr. Roosevelt had only curbed hie impatience
and not precipitated the conflict in 1937 which
split his Party, he would now undoubtedly b#:'in a
far stronger position with Congress.   It seems
indeed as if all the President's difficulties with
the legislature originated in this great act of
political unwisdom.   And ao now we see Mr. Roosevelt,
thwarted by Congress, resorting to homilies against
"gambling Congressmen1*.   At a press conference at
Hyde Park he is reported to have accused the
Republican minority, aided and abetted by conservative
Democrats, of betting in foreign affairs against the
safety of a billion and a half human beings throughout
the world, and in hone affairs by rejecting his "pump
priming" measures of gambling on business being
able to absorb the three million persons who would be
cut loose from relief and Works Projects jobs in the
spring.   Mr. Roosevelt told his hearers that he
personally hoped that his opponents might win both
wagers, but if they lost the people would know whom
to hold accountable.
3. In paragraph 8 of my despatch Ko.824 E of
July 27th I described the solution of the deadlock
over the Tennessee Valley Authority. On August 15th
in an elaborate ceremony the Tennessee Valley Authority
handed to Mr. Wendell Willkie, President of the
Commonweal th/
Commonwealth and Southern Corporation a cheque for
$45,000,000 which represented the Tennessee Valley
Authority's share of the purchase price of the power
and light properties of the Tennessee Electric
Power Company.   This marked the end of a 6-year
controversy between the Tennessee Valley Authority
and the private utility companies supplying the
Tennessee Valley.   Mr. Willkie declared that he sold
the properties with regret, and had been forced to do
so because his Corporation could not stay in business
against subsidised Government competition* Speaking
for the utility companies throughout the country he
demanded that the Government hereafter discontinue
its competition with private companies outside the
Tennessee Valley. The same day Hp. Willkie1 a corporation
published a full page advertisement in several newspapers
protesting against the manner In which the Corporation
had been forced out of business In the Tennessee Valley,
and claiming to have rendered good service to the
communities there*   The advertisement also stressed the
fact that the Corporation has} In the last year paid nearly
$3,000,000 taxes, most of them to local and State
Treasuries, and suggesting that Tennessee might find that
It had made a bad bargain after all*   Mr. David Lilienthal,
one of the directors of the Tennessee Valley Authority,
claims that the Tennessee Valley Authority is now
entering its crucial second stage.   It has weathered all
opposition and emerged with Its power programme established,
a aeries of huge government dams guarantees the supply
of power, and more than 100 contracts ensure its market
for/
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fop the next twenty years.   The settlement with the
power companies has eliminated conflict in the Tennessee
Valley and in its next stage the Authority must prove
by its record that it is a sound investment for the
community.   X have the honour to enclose an article
by fir* kilienthal which appeared in the Supplement
to the "Hew York Times" of August 20th, which puts
the ease very ably.
4. X am sending copies of this despatch to
the High Commissioner for the United Kingdom in Canada,
the Department of Overseas Trade, and the Prime
Minister of Australia care of the Dominions Office.
X have the honour to be,
with the highest respect,
My Lord,
Tour Lordship* s most obedient,
humble servant,
(S®D> a. C. &XSBSAY.