The Chief of the Division of British Commonwealth Affairs ( Satterthwaite ) to the Assistant Secretary of State for European Affairs ( Perkins )


Subject: Subjects Other Than Economic Which Cripps and Bevin Are Likely To Bring up in the September Talks.

The subjects which Cripps and Bevin will want to discuss in Washington, and their approach to them, will depend to a large extent on the progress of the economic talks.

We may expect the British to take the offensive in the talks, and in effect say “Here is the spot we’re in, what are you going to do about it”? Nevertheless, their position is sufficiently difficult so that if we have a strong plan which shows some signs of working, and they think we mean to carry it out, they will do almost anything we ask them. If, however, we do not have a strong plan which looks as if it could be a long-term solution to the problem, there is a great danger that the British will make a well thought-out attempt to blame their own and the western world’s ills on the United States. In this case, they will probably formally abandon adherence to multilateralism and do what they can to seal off the sterling area from the dollar world, whether we acquiesce or not, and we will lose some of our ability to control events. A deterioration of military and general cooperation between the United States and Britain, and in our ability to utilize the British to help us protect our world position, would almost certainly [Page 806] take place if there was a rift in our economic and financial relations. It seems to me that we never have been in a better position to call the turn with the British, if we know what we want and have a plan, nor in a more vulnerable position to absorb needless and unjust blame if we fail to exercise our leadership. The trouble with a short range plan to carry them over a crisis for six months or so, is that the British won’t agree to take sufficiently drastic measures to cure anything fundamental, if they have no assurances as to what will happen when the stimulant wears off.

Specifically, it is probable that the British will want to give up some of the military commitments which they have all over the world, not only those which involve some out go of dollars but those involving only sterling. This will be aggravated by the failure in recent months of British recruitment for their armed forces. The degree to which the British give up their military commitments will, of course, be influenced by their estimates of the usefulness of whatever help, financial or otherwise, they get from us.

The British will probably want to discuss the agenda for the September meeting of the General Assembly of the United Nations, as for example, Italian Colonies, India’s membership in Security Council et cetera.

The British will want to discuss Far Eastern policy. It is probable that their commitments on Hong Kong and elsewhere in the Far East will depend directly on their estimates of their own strength over the next few years, which are in turn dependent on what they think we will do to help.

We have asked our Embassy in London for a list of subjects, other than financial and economic, which Bevin may wish to discuss with us.