840.00R/1–750: Telegram

The Chargé in the United Kingdom ( Holmes ) to the Secretary of State


110. Pass ECA/W and OSR.

Re Deptel 4627, Dec 29, rptd Paris as 4975,1 Emb and ECA here also becoming concerned over growing number of differences, and recent [Page 1600] signs of strains and stresses on Anglo-American relations. Our joint comments follow on causes and character this strain, which parenthetically is subject of feature articles yesterday’s Economist, and New Statesman which we are airmailing:
There is no reason to believe recent differences are consequence of any change in basic Brit policy. We know from unimpeachable source that Cabinet directive still makes maintenance and development of intimate, harmonious and cooperative working relations with US a transcending guiding principle of Brit policy.
This directive based on belief here that sole hope of guaranteeing Brit security and well-being lies in working partnership with us, for Brit, in conjunction old Dominions, and US are only nations in world today with the will to resist Communist expansion and the power, resources and skill to reconstruct world economy. Since split in Anglo-American partnership must be a constant hope and even objective of Soviet policy, Brit are always sensitive to differences with us and apprehensive when strains occur. Despite occasional signs to contrary, we think they can always be counted on to consider their position carefully whenever friction develops, especially over crucial issues, for there is every desire here to minimize any strain.
There have already been several periods of more or less severe strain since the war. Abrupt termination of Lend-Lease produced violent shock here in 1945.2 A second cleavage occurred after the convertibility crisis in Aug 1947.3 Our prolonged differences over Palestine imposed a most serious strain on our relations, especially in 1947–48.4 There was a fourth strain this spring and summer during their foreign exchange crisis which was accentuated by mutual recriminations in both countries, and only ended as result of President’s speech to American Legion and friendly conduct and outcome of Sept financial talks.5
Altho foregoing strains were disturbing, present strain strikes us as being potentially more serious, for our differences now are more numerous, complex and intangible, and some are likely to remain a source of friction for a considerable time.
This is not place to analyze particular circumstances surrounding each of our differences or judge merits of Brit or our case. This tel merely attempts to describe general causes of our growing differences as we see them.
Basic causes are continuing economic difficulties and consequent atmosphere of desperation prevalent here. Having gone thru another economic crisis this year—third and most serious since the war-Brit leaders feel they are now fighting a last-stand battle for survival as a world power. They see themselves confronted by a host of life and death problems. They are trying simultaneously to maintain their Commonwealth and Empire and military commitments, balance their trade, modernize their industry, balance their budget, fight off inflation, and prevent a fall in their standard of living. Since there are no margins, even trivial things such as a battalion dispatched to Eritrea; a million pounds expenditure on this or that item; a million gained or lost in overseas trade; a penny rise in price of bread or a dime on the price of domestic coal become critical problems of major dimensions that require Cabinet attention.
In such an atmosphere of tension it is not easy to reconcile our differences, for even the smallest matters take on an importance which it is hard for us to appreciate. This explains in whole or in part our differences over aviation policy; their resistance to any ECA or OEEC proposal that involves even the risk of a small drain on their gold and dollar reserves; their refusal to abandon dual price system in re coal exports; to undertake small additional financial commitments under bilateral military agreements; and even their lack of interest in the Caribbean Commission. Economic difficulties explain in part their recognition of China—a long-shot gamble made in hope Brit may save something of its trade and investment (four times that of US), as well as enable her to hold Hong Kong. They explain their tough line in oil negotiations,6 for favorable solution this single item would go long way to resolve their dollar problem and make them independent of US aid.
Altho existence of a Labor Govt committed to planning and nationalization inevitably imposes certain additional strain on our mutual relations in view of differences in outlook and approach to problems, it would be mistake for us to believe that our differences would disappear if Conservatives came to power. Considering Brit’s economic difficulties and imperial position, we believe any Brit Govt would adopt much the same policies as present Govt in int’l matters.
A second general cause of current strain originates in Brit annoyance over increase in our prodding, pressure and criticism, officially [Page 1602] or otherwise, and our tendency to ignore what they continually contribute to our mutual objectives. Moreover, it often seems to them that we are urging on them actions which are imprudent or detrimental to their self-interest, which they so frequently identify with our mutual interests.
This explains their irritation in UN over ItCol7 and colonial policy in general, and will contribute to their irritation when we criticize their recognition of China.
The principal source of friction in this connection is our continuing demand that they “integrate” their economy with Europe. There is little difference between us on “integration” as defined at OEEC Council mtg in Nov.8 But they are fearful that American opinion may not be satisfied with such prosaic objectives as multilateral trade and convertible currencies in Europe, and may insist on a more ambitious form of unification that would undermine Brit’s position in relation to the Commonwealth and Sterling Area. Moreover Brit resent a common American attitude that they are just another European power. They see Brit as the hub of a vast and complicated political, military and economic mechanism, occupying a position in the world and a relationship with us which is quite different from the other European powers. There is a constant wonder here that we should think it in American interest for them completely to integrate with Europe.
A third cause of our recent difficulties is the impending gen election which makes the Govt especially sensitive to any move that may prove a political liability.
Their dislike of our bilateral military draft agreement9 and their continued refusal to reduce export coal prices are in some meassure due to their fear that additional expenditure on defense or rise in domestic price of coal would have adverse political consequences.
We think some of our recent differences will disappear or diminish or yield to negotiation after the election whichever party wins. This will especially be true if elected Govt has strong working majority.
A fourth cause of present strain must also be kept in mind, for it may be a continuing factor if Labor wins election. Chief leaders present Govt and many of top civil servants are physically and mentally tired, overworked and exhausted. In such atmosphere, there is bound to be irritation when we hammer away indiscriminately on whole [Page 1603] range of problems regardless of their importance, lay down deadlines, or ignore human element.
Then there are what might be called “pin-pricking” causes of current strain. During this year there has been stream of American visitors, public and private, demanding to see top leaders of Govt, asking impertinent or intrusive questions, raising the spectre of what Congress may do to ECA aid unless the Brit agree to this or that case of special pleading, and in general acting maladroitly. We have done what we could to handle these cases tactfully and skillfully, but we know they have caused irritation here.
Finally, we come to a general cause of strain. Owing to differences in our political systems Brit are aware that it is much easier for Cabinet, Treasury, and FonOff to formulate and carry out consistent, interrelated, and even temporarily unpopular policies than for US Exec and State Dept.
Brit system makes it easier to coordinate the military, Parliament, press and special interests in support of a single natl policy. Moreover, they have the advantage of a more experienced public opinion on which to count.
They are amazed and pleased at the speed with which US is assuming wider and wider int’l responsibilities, acquiring experience in handling int’l affairs, and developing consistency of policy.
At same time Brit are always nervous as to how we will act in any given situation. They have never really understood how policy is arrived at in US, and are often disconcerted by confusion which appears to surround American foreign policy making. They are, therefore, often unduly worried, as was the case this week over Formosa.10
While confidence in us has grown enormously during last few years, instances of unpredictable behavior in US foreign policy or public opinion still occur and impose a continuing strain on our relations.
To summarize, we think our basic relationship rests on solid ground, but we must not take it for granted. Good relations require a deliberate effort on both sides to understand each other’s problems and point of view, a more adroit handling of every situation, concentration on priorities, and a recognition that it will take sustained effort during the difficult years ahead to maintain smooth and effective relations.
We suggest following immediate steps:
The Secretary might consider advisability of having general talk with Franks before he leaves Wash, indicating our awareness [Page 1604] that Anglo-American relations are growing more complex and more difficult, and reassuring him that our guiding principle too is to maintain close, harmonious and cooperative relations. We believe nervous Brit atmosphere requires periodic reassurances of this kind. Sept talks were particularly valuable in this regard. Such reassurances also create better atmosphere in which to discuss our differences and would contribute to favorable outcome.
We should pass word around that any public taking of sides in Brit election would be resented by both parties here and might easily have serious effect on our relations.
We should decide what issues between us and Brit are important and, until election is over, concentrate on these.11

Sent Dept. 110; rptd Paris as 32.

  1. Not printed; it reported that the Departments of State and Defense and the Economic Cooperation Administration were undertaking a survey of existing and anticipated points of friction with the British with the aim of working out priorities and avoiding public issues that might generate unnecessary trouble. (840.50 Recovery/12–2949)
  2. For documentation on the termination of Lend-Lease to the United Kingdom, see Foreign Relations, 1945, vol. vi, pp. 1204, passim.
  3. For documentation on the British financial crisis of 1947, see ibid., 1947, vol. iii, pp. 1 ff.
  4. For documentation on United States differences with the United Kingdom concerning Palestine, see ibid., vol. v, pp. 999 ff., and ibid., 1948, vol. v, Part 2, pp. 533 ff.
  5. For the text of President Truman’s speech at the Philadelphia convention of the American Legion on August 29, 1949, see Public Papers of the Presidents of the United States: Harry S. Truman, 1949 (Washington, Government Printing Office, 1964), pp. 446–451; regarding the American-British-Canadian (ABC) financial talks of September 1949, see Foreign Relations, 1949, vol. iv, pp. 803 ff.
  6. Under reference here were efforts by the British to limit the amount of oil bought by the sterling bloc for dollars in an attempt to help maintain their sterling balances at a safe level. Documentation on the “sterling–dollar oil” negotiations is in file 841.2553.
  7. Documentation on the question of the former Italian colonies before the United Nations is scheduled for publication in volume v.
  8. Regarding the OEEC Council meeting in November 1949, see Foreign Relations, 1949, vol. iv, pp. 440 ff.
  9. Documentation on the negotiations for a military defense assistance agreement between the United States and United Kingdom is in file 740.5 MAP; for the text of the agreement signed at Washington on January 27, 1950, and entered into force on the same day, see Department of State Treaties and Other International Acts Series (TIAS) No. 2017.
  10. Presumably this is a reference to the statements released to the press by President Truman and Secretary Acheson on January 5, clarifying the United States position on Formosa. For the texts of these statements, see Department of State Bulletin, January 16, 1950, pp. 79–81; for further documentation on U.S. policy toward Formosa, see vol. vi, pp. 256 ff.
  11. On January 19 Secretary Acheson left a copy of this telegram with President Truman who “was most anxious to read” it. Memorandum of a meeting with the President, January 19, not printed. (840.00R/1–1950) Previous to this Holmes had reported that the British were working on a “list of priorities to try to agree on matters which we should proceed to settle without delay and those which might wait until after British elections.” Telegram 162, January 11, from London, not printed. (840.00R/1–1150)