International Trade Files, Lot 57D284, Box 165, Folder “Balance of Payments”

The Chairman of the United States Delegation to the Fifth Session of the Contracting Parties to GATT ( Brown ) to the Acting Director of the Office of International Trade Policy ( Leddy )

personal and secret

Dear John: Len Weiss had a talk today with Arthur Burgess of the United Kingdom Delegation, who expressed concern at the way the consultations have been going, not so much in what has been happening here at Torquay, but at the fact that the British feel very much annoyed at the way they have been “pushed around” by the [U.S.] Treasury. Arthur says they are ready to consider relaxations, but they feel that they have been put in a position where the voting power of the United States in the Fund has been used to force their hand. They have the feeling, rightly or wrongly, that this was done without proper consultation with the British, and that this is incompatible with the position of Britain as a friendly, sovereign country and bad for the general relationships between the two countries.

Stephen Holmes has said much the same thing to me. In speaking of the treatment received in the Fund, Stephen spoke with evident strong emotion, something which you realize is unusual for him. …

Some of the questions they have been asked during this consultation have, I have felt, been irrelevant and merely irritating. George has been doing the detailed questioning and I have been doing the final statements. In justice to George, I must say that the excellence and completeness of the Fund’s facts and figures have made it somewhat difficult to ask pertinent questions without simply repeating what was [Page 775] already before the Working Party, and we have felt that simply to listen to what the representative of the country had to say and then state a conclusion without any kind of discussion would be very inappropriate.

I have heard from other sources that there is a general belief in the British Government that the action of the Fund and these consultations are an opening gun in a Treasury campaign to split up the sterling area.

Obviously, all the right is not on one side in this matter and I think it is certainly one of approach rather than of substance. But I do think the Department ought to know of this strong feeling in the British camp, which is an important factor to be taken into account in developing our general attitudes and policies in this field.

This attitude is another reason why I feel it would be very foolish to press for a vote in the Working Party or in the Contracting Parties.1

Sincerely yours,

Winthrop G. Brown
  1. In telegram 222, to Torquay, December 1, 1 p. m., the Department authorized the Delegation to accept the Working Party report without a formal vote on whether each Contracting Party supported the International Monetary Fund recommendations, as “only a minority acceptance of US–Fund position … might be considered as rejection of Fund findings and would be extremely damaging GATT–Fund relations as well as US objectives.” (394.31/12–150)