841.51/8–2347: Telegram
The Acting Secretary of State to the Secretary of State at Petropolis
78. Humelsine for Carter. For Secretary Marshall from Lovett. British financial talks at top level terminating today with leaders British Delegation returning to London to report progress of conference to their Government and discuss policy requirements. Other members Delegation are remaining to continue technical discussions next week. Conferences have been divided into two broad categories, one dealing with the convertibility and foreign exchange problem, and the other with the non-discriminatory clauses relating to US–UK trade.
As indicated in previous cables, temporary procedures for dealing with financial aspects have been worked out under Section 8, Subsection 2, and trade aspects to be covered in general by adjustments coming within terms of section[s] 8 and 9.1
In my opinion British must show far more managerial competence and more flexibility in their control measures than heretofore exhibited if they are to operate within the broad terms and purposes of the loan agreement. Even with improved operations and elastic policy I feel that the measures taken here in these conferences are temporary and that a renewal of the crisis is likely in about two months. This time is important since it gives opportunity to obtain proposals from the Paris conference and try to work out integrated program.
- In a Cabinet meeting on August 29, “the Secretary of the Treasury reported on the concluding stages of the British loan agreement talks and indicated that it was expected that the British would continue to operate within the terms and conditions of the Act, using such latitude as was permitted in Sections 8 and 9.” (811.5043/8–2947)↩