611.41/5–550
Memorandum of Conversation, by the Secretary of State
| Participants: | Sir Leslie Rowan, The British Embassy |
| The Secretary of State | |
| Mr. Willard Thorp1 |
Sir Leslie Rowan called at my request. The request was made as a result of an understanding between Secretary Snyder, Mr. Hoffman and me that I should inform Sir Leslie orally of our “first thoughts” on the paper relating to settlement of the sterling balances and the investment needs of south and southeast Asia which had been sent to me by Sir Oliver Franks.
I said to Sir Leslie that as requested by Sir Oliver I was giving to Sir Leslie in Sir Oliver’s absence our first thoughts on the paper. These were in reality first thoughts because Secretary Snyder, Mr. Hoffman and I had all been under such pressure in the last few weeks that we have had only a limited opportunity to consider the paper. We noted that it dealt with two subjects: the negotiation of the sterling balances and the development needs of south and southeast Asia.
In regard to the first, we still thought, as we had in the past, that arrangements between the British and the holders of sterling balances [Page 1640] toward the end of either scaling down or converting portions of the balances or both were of great importance and the necessary steps toward the goal of convertibility. We were very glad to know that the British were going to make a determined effort in this direction and had great hopes that they would be successful.
On the other subject, the development needs of south and southeast Asia, we agreed with the British on the great strategic importance of this area. We had already taken some steps to give economic and also military help to that area. We proposed to discuss the matter further in London and hoped to reach a meeting of minds there on the coordination of the efforts of all concerned—the British, the Dominions, the French and we hope the Dutch in the area. From our point of view, we had to approach this solely from the point of view of the needs of the area as a part of a foreign investment program. This matter now formed a part of the study being conducted by all the Departments under the leadership of the President, who had assigned Mr. Gordon Gray2 to give it his exclusive attention. We must, therefore, present any conclusions which we arrived at to our own people and to the Congress and we wished that the British would present our attitude as being directed solely toward needs of the area. We could not consider what we might do in this area as related to the sterling balances. If whatever we were able to do had the effect of helping the British in the solution of their separate problem, we would be very glad.
I said that it might take us some months to complete our work within the Government and it might take some further time to present our conclusions to the country and the Congress.
Sir Leslie asked whether we contemplated having any further discussions of the paper at the official level. I said that I had not discussed this point with Mr. Snyder or Mr. Hoffman, but I felt that I could speak for them in saying we did not contemplate making any further reply to Sir Oliver’s letter by note or memorandum as I thought our conversation had covered it. I said that I felt sure the Treasury would be interested in any further information which might develop as the negotiations between the British and the holders of the balances proceed. So far as the investment needs were concerned, we expected to have further discussions in London and there would undoubtedly be further talks between the British, French and ourselves in the course of developing and coordinating bur first efforts.
Sir Leslie thanked me for receiving him and giving him the above impressions on the British paper and said he would promptly report them to his Government. He stressed the point that the British memorandum [Page 1641] was most tentative in character, and did not represent a course of action which had been approved.