890.24/8–1645
The Assistant Secretary of State ( Clayton ) to Sir Wilfrid G Eady
My Dear Sir Wilfrid: The memorandum attached to your letter of August 16 satisfactorily reflects the interim arrangements to govern surplus disposals in the Middle East which our people have agreed upon. Of course paragraph 2 relates only to those supplies which we decide to sell as surplus in the particular areas involved.
As you know, we have undertaken these interim arrangements only because of the extreme urgency of disposing of these goods to prevent deterioration, and we wish to emphasize our strong desire to make final arrangements for the disposition of the proceeds within the very near future.
Sincerely yours,
[Under the terms of the Financial Agreement signed at Washington on December 6, 1945, by the United States and the United Kingdom (Department of State, Treaties and Other International Acts Series (TIAS) 1545, or 60 Stat, (pt. 2) 1841), the United Kingdom committed itself to complete arrangements within one year of the effective [Page 84] date of the agreement under which “the sterling receipts from current transactions of all sterling area countries … will be freely available for current transactions in any currency area without discrimination; with the result that any discrimination arising from the so-called sterling area dollar pool will be entirely removed and that each member of the sterling area will have its current sterling and dollar receipts at its free disposition for current transactions anywhere.” The effective date of the agreement was later determined to be July 15, 1946; see letter of July 15, 1946, from the Acting Secretary of State to the British Ambassador (Inverchapel), printed as part of TIAS 1545. In telegram 1035, July 14, 1947, 11 a.m., the Department notified Cairo that “It has been decided to make no approach to British on termination of Eady–Clayton Agreement in desire to avoid raising unnecessary issues and possible political reaction from Middle East Countries. Department concurs, however, in position that provisions of E–C Agreement inconsistent with overall financial agreement are automatically inoperative as of July 15.” (883.24 FLC/7–1447)]