841.51/11–345: Telegram
The Ambassador in the United Kingdom (Winant) to the Secretary of State
London, November 3, 1945—8 p.m.
[Received November 3—6:20 p.m.]
[Received November 3—6:20 p.m.]
11568. For Assistant Secretary Clayton.
- 1.
- In strictly confidential conversation this afternoon Hall-Patch told Penrose that UK circles considered that great progress had been made with commercial policy negotiations but that the position on the financial talks was serious.
- 2.
- Regarding commercial policy he said that in UK opinion the prolonged talks in London over the last year had prepared the ground thoroughly and familiarized officials with it in detail and had thus contributed largely to the satisfactory progress of present negotiations.
- 3.
- The chief UK difficulty on commercial policy now was [is?] the present attitude of the Australians. Hall-Patch said the Dominion’s Secretary92 is having “a hell of a time” with Evatt93 who is pouring in forcible protests against the commercial policy understandings.
- 4.
- On the financial negotiations Hall-Patch said the difficulty centered on the US insistence on a loan on strictly commercial lines. The difficulty was with the inadequate size of suggested loan and the burden of servicing it. Those two difficulties were interconnected. If interest [Page 154] as well as amortization payments had to be made on the entire loan, then the size of the loan which the UK could take with any hope of servicing it was so limited that they would not be in a position to undertake the commitments regarding the freezing of sterling, and entry into multilateral arrangements which were called for in other parts of the general settlement. Whatever happened the UK were determined not to take loan commitments which they could not meet.
- 5.
- A clause on the interest and amortization payments in case of balance of payments difficulties, Hall-Patch said as the US had not put up any definitive plan it was left to the UK to make proposals on this subject. This was an extremely complicated matter for the Cabinet to pass on in a hurry.
- 6.
- The Cabinet are greatly worried over the financial negotiations, particularly from the point of view of public opinion here which in part is suspicious that the US political and financial interests wish to bring pressure to bear against the Labor Govt’s domestic policy.
- 7.
- The Cabinet is meeting this evening but Hall-Patch is uncertain how far they will be able to cover the ground and thinks it likely that the subject may not be dealt with fully before Monday.94
- 8.
- Hall-Patch paid tribute to the good will of US officials and governmental circles and said that UK officials appreciated fully the extraordinary difficulties of our negotiators in having to negotiate on the basis of hypotheses as to what they think Congress will accept and then having from time to time to “take the temperature” of Congress by soundings on the Hill, following which they are obliged in some cases to modify their position.
Winant