Foreign Relations of the United States, 1947, The British Commonwealth; Europe, Volume III

841.51/9–447: Telegram

The Acting Secretary of State to the Embassy in the United Kingdom

secret

Washington, September 18, 1947—6 p. m.

4057. Deptel 3995, Sep 15, rptd Geneva for Wilcox as 1193, Paris for Clayton as 3483. After further discussions between Dept and Treasury on Section nine financial agreement it was decided not to submit alternative recommendations to NAC but merely to agree on position paper¹ outlining problems involved and listing possible courses of action open to British consistent with strict interpretation Financial Agreement. Paper then refers to data to be supplied by British and states that game may reveal there is reasonable prospect they can work out import program within such possible courses of action. If so no difficult question would arise under Section 9 and appropriate public announcements could be released in both countries. If British program and prospects reveal there is clear necessity for import programs which could not be carried out under possibilities outlined in position paper “further analysis of alternative possible courses of action will be necessary”.

Dept presumes Embassy will telegraph at least summary of British data and that Embassy will keep Dept informed of any developments in connection with statements made at Secretary Snyder’s press conference on Sept. 15.²

Lovett

1. National Advisory Council document 511, September 18, 1947, not printed.
2. Excerpts from Secretary of the Treasury Snyder’s comments to the press are printed in the New York Times, September 16, 1947. Snyder agreed that a press release would be made through the U.S. Embassy concerning section 9. The text transmitted to the Department in telegram 5049, September 18, and released the same day follows: “In his statement to the press on September 15 last Mr. John W. Snyder, the US Secretary of the Treasury, pointed out that when any two governments work out an agreement, it must be kept flexible. This was the spirit of the original loan negotiations, and it is the purpose and intention of the officials of the two governments who are presently dealing with this problem. The framers of the Anglo-American financial agreement specifically recognized the existence of unusual aspects of the UK position requiring certain deviations from the inflexible rule of non-discrimination. It is basic to an understanding of section nine of the agreement to appreciate that it was never intended to constitute a strait jacket on British trade.” (FW841.51/10–1047)