Office of the Historian

841.51/11–645: Telegram

The Ambassador in the United Kingdom (Winant) to the Secretary of State

London, November 6, 1945—midnight.
[Received November 6—10:04 p.m.]

11664. Personal for Secretary Byrnes and Assistant Secretary Clayton.

1.
Thank you for 9725, November 5 just received, directed to me and Dunn. Dunn sailed on the Queen Mary on November 4.
2.
This afternoon I saw Bevin about a number of subjects. Before I left he brought up the question of the financial discussions. He was plainly troubled about Britain’s future and about the chances [Page 157] of getting the cooperative world that he wants. He feels that unless the US is able to assist on a sufficient scale to meet Britain’s balance of payments difficulties the future is not promising.
3.
He then sketched briefly the main points which he thought necessary to meet the difficulties. He divided the necessary financial assistance into two parts:
  • First, a 2½ billion dollar credit at an interest rate of 2% with repayment beginning after 5 years and spread over 50 years, and with provision for a waiver clause.
  • Second, a 2 billion dollar credit interest free but with repayments beginning after 5 years and spread over 50 years to be available to be drawn on to the extent necessary for the release of sterling.
4.
It seems to me likely that the figures mentioned by Bevin were approved by the Cabinet last night for Hall-Patch and Bobbins to take back to Washington as a revised British proposal.
5.
Bevin argued that the credit of 2 billion would be to our advantage since it would open the sterling area to American trade and it should therefore be free of interest.
6.
I realize that this may be a simplification of a difficult and complicated problem and that questions of the writing down by creditors of British external obligations in sterling are involved but I do believe that the interests of security and the hope of restoring multilateral trading depend on success in the present discussions.
7.
There is also the danger that if the service charges on the total loan exceed Britain’s ability to make current payments she may be tempted to cut down her requests for funds to an amount which is insufficient to carry through successfully a multilateral trade program. A cramped world trade will react against full employment in the US and will create general economic insecurity.
Winant