560.AL/4–2446: Telegram

The Chargé in the United Kingdom (Gallman) to the Secretary of State


4423. For Wilcox and Brown from Hawkins. 1. We advised Liesching and his colleagues Tuesday morning of the decision to postpone negotiating meeting. Re Dept’s 3329, April 18, 7 p.m.

Liesching read from a long telegram from Magowan64 giving the story as he had obtained it from you and therefore knew in some detail the reasons for postponement, including the fact that the unexpected delay in getting congressional approval of the loan had affected the time-table.65 Liesching assumed public statement would sooner or later have to be made and thought best reason to give for delay would be need for more preparation. He felt, however, that it would be necessary to tell Dominion Government officials in conference [confidence] the considerations as outlined by you to Magowan, on which decision to postpone was based. We told him we expected to hear from you shortly on the question of when and in what terms a public statement should be made.
The British then raised the question of what our program should be between now and the negotiating meeting next year. We said your telegram indicated that a recommended program would be sent to us as soon as possible. They then commented on ideas regarding the program which apparently had come up in your discussion with Magowan. They thought that perhaps the questions of organization and commodity policy, which you apparently had mentioned to Magowan as the subject matter for interim discussion, would not be very hearty fare for the ECOSOC Preparatory Committee.
Liesching seemed to take it for granted that the next step of a formal character would be the convening of the ECOSOC Preparatory Committee; that this would assist in maintaining momentum of program. He inquired who would take the initiative in convening the committee. We surmised that US would. The British also raised the question whether it would not be possible to accomplish a good deal in getting understanding and acceptance of our “proposals” by continuing bilateral discussions with the various countries that will participate in the nuclear meeting.
The British strongly urged that there be no let-up in the preparation of request lists by the US and all other countries. They wanted to know whether you could give them a date when the US request lists will be sent out stating that it is essential for the British Empire countries to have them prior to the Empire meeting.
The British are not clear now when the Empire meeting will be held but ask us to remember in considering the timing of any other meetings that an Empire meeting has to be worked in somewhere. They mentioned January 1 as a possible date.
The British asked the status of the draft convention [charter]. We told them it was far advanced. In accordance with your instruction 6534, March 20, we have not, of course, transmitted the draft or indicated that we have it.
Please cable comment on initiative paragraph 4 and date for US lists paragraph 5. [Hawkins.]
  1. Sir John Magowan, British Minister in the United States.
  2. The Administration at this time viewed the loan as the economic fuel necessary to revitalize trade, to secure British acquiescence in American views on commercial policy, and to secure a more favorable position for the United States vis-à-vis the sterling bloc’s trade preference system. Despite Administration pressure, however, Congress appeared reluctant to move on the issue. A number of factors besides traditional national attitudes were involved in Congressional resistance to the proposed loan, some Congressmen feeling that the interest rates were too low, others believing that the Bretton Woods institutions should be called on rather than the United States, and still others preferring the multilateral rather than the bilateral approach to the whole loan question. For a detailed analysis, see Gardner, Sterling-Dollar Diplomacy, pp. 236–254. For documentation regarding the Bretton Woods institutions, see pp. 1384 ff.