The British Chargé (Balfour) to the Secretary of State

(Ref.G. 190/ /47)

Dear Mr. Secretary: I have just received instructions from Mr. Bevin to inform you that in the last few days British Ministers have had under consideration the steps that they should take forthwith to increase the nation’s productivity and to relieve the strain on the balance of payments of the United Kingdom. Measures to this end will be announced in a two-day debate in Parliament on Wednesday the 6th and Thursday the 7th August.

2. In this connexion His Majesty’s Government in the United Kingdom wish to suggest that, as a first step, a discussion with the United States Government should take place forthwith on a high official level about our position and its immediate implications. His Majesty’s Government propose to announce in Parliament that they have made this approach to the United States Government. They hope that it will prove acceptable and it would be a great help to Ministers if they could inform Parliament that it had been accepted.

3. I am instructed to emphasize that this approach is not intended to settle matters which are proper for discussion at the Paris Conference,1 or subsequent developments in response to your initiative. But His Majesty’s Government feel strongly that it might be embarrassing to both our Governments if we were to attempt too close a definition at this stage as to the matters to be discussed.

4. I am asked to add that the United States Government may prefer that His Majesty’s Government should now invoke consultation under Clause 12 of the Anglo-American Financial Agreement, to which I referred in the course of my conversation with you on the 28th July. In that event, His Majesty’s Government would be ready to do so.

5. His Majesty’s Government would greatly appreciate your early comments on the foregoing proposals.

Yours sincerely,

John Balfour
  1. Reference here is to the Committee of European Economic Cooperation, which began its deliberations on July 12, 1947, in Paris. For documentation see pp. 249 ff.