No. 436

611.41/4–3051

Memorandum by the Assistant Secretary of State for European Affairs (Perkins) to the Secretary of State 1

secret

Subject: U.K. Relations

Attached is a memorandum outlining very briefly various points of difference with the U.K. existing today. I call your attention especially to the first part of the memorandum listing certain general considerations which enter into specific problems time and again and which if taken into account more fully in our day to day relations would minimize many points of friction and eliminate others.

There are four major points I wish to stress:

1.
Access to raw materials is the issue which contains the potential of more trouble on the British side than any single issue. This is vital to the success of the present U.K. defense effort let alone any increase which may be required to meet NAT deficiencies. It could cause serious dislocations in the U.K. economy, unemployment, etc., which could create very bitter feelings.
I recommend that the Department make vigorous efforts with other U.S. Departments to insure that the U.K. receives an adequate and fair share of available materials. This will not be easy as it is becoming increasingly evident that there is not enough for our own military program and those of our Allies unless civilian consumption in this country is curtailed well beyond present plans.
2.
In this country the Far East will probably cause the most trouble. It is our belief that fundamental questions such as recognition and UN representation are likely to be settled only by events rather than by conversation. Provided the MacArthur debate is received in favor of the Administration, his removal from the scene should create a climate in which progress can be made toward agreement on selected issues such as economic sanctions and Chinese participation in the Japanese Treaty negotiations.
3.
On Iran we are right in pressing the U.K. to make a better offer and should continue to do so as we feel her present offer will not be acceptable to the Iranians and may lead to a very serious situation. But when she reaches her limit we should be prepared to render her strong support within appropriate limits. This is a case where our general interests coincide but where additionally the U.K. has a special direct interest of the greatest importance and can rightly expect our support. NEA has not cleared this and would have reservations on the question of our support.
4.
In view of the delicate nature of our present relations all Bureaus having problems involving the British should be instructed to keep fully in mind the general considerations listed in the attached memorandum and to seek the advice of BNA on all pending action so that the effect of all individual actions can be assessed in the light of the overall effect on our relations with the U.K. In this connection it seems important that we extend our practice of consultation with the British on matters of mutual interest and be most careful to assure that on matters in which they have an interest the consultation is full and not in any way perfunctory.
[Attachment]

Paper Prepared in the Department of State 2

secret

Important Points of Difference on Policy Between the United Kingdom and the United States

Fundamentally Anglo-American relations are strong and constant, but at the present time there are certain outstanding divergencies between the two countries which create temporary friction.

The British are aware that the U.S. has since World War II taken over many of the global responsibilities formerly in the hands of the British and are glad the U.S. has assumed the leadership of the free world. The U.K. is fully conscious of the necessity of partnership with the U.S. and consequently supports the U.S. position on large issues (with the notable exception of Far Eastern [Page 937] policy) but below the surface lies a sensitive reaction to the new U.S. world-wide position.

Although willing to support us on most large issues even when she has doubts as to the correctness of our positions, Great Britain feels that on questions when her interests are directly involved the U.S. should support her. Underlying our differences are British apprehensions over what the United States might do unilaterally. They are not convinced that even with the best of intentions, we will acquire the skill and strength fast enough to pilot the free world safely through the dangers that beset it. This lack of conviction stems in part from their belief that we tend to blow hot and cold, that we sometimes proceed from anger, that the State Department, because of public and congressional lack of confidence may be unable to carry out essential policies. If British overall confidence in the ability of U.S. leadership to pull them and the rest of the free world out of its difficulties was complete, the differences between us over specific issues would be much less. It is partly because of this doubt about U.S. leadership that they are unwilling to yield to us in certain areas such as the Far East and why they often go along with us only part way. When our overall leadership seems to the British to be good, the specific differences become less in number and intensity; when the reverse is true, and when our prestige abroad is low, our differences increase in number and sharpness. We are in a period now when the British confidence in the infallibility of our leadership is low. Until this is reversed we can expect continuing and sharp differences.

The outstanding questions between the U.S. and the U.K. are listed below:

i. general problems relating to assistance to the british defense effort

A.

Raw Materials Allocation: The U.K. has stressed for some time its reliance on ready access to raw materials. It is correct to say that this factor rather than finance is the possible limitation on the present British defense effort. In order of magnitude, the critical raw materials from U.S. sources are sulphur, zinc, cotton and copper. From world sources wool would be added to this list, allocations thus far have been disappointing to the British. Their estimates of requirements for their program are in excess of our estimates of their reasonable share of world availabilities.

The Department should make a vigorous effort to educate the other Government Departments on this question to the end of meeting U.K. requirements as this is vital to the success of the present U.K. defense effort, not to mention any increase which may be needed to meet deficiencies.

B.
Machine Tools: Machine tools constitute a similar problem but this seems to be better in hand than the question of raw materials. The British are pleased by our recent decision to complete our 1951 AMP commitment by financing machine tools. Some of the good effect of this, however, was dissipated by ECA raising the counterpart fund issue which seems to inject unnecessarily an irritant into the situation.
C.
U.S. Assistance to British Defense Program: The U.K. has accepted without serious protest our decision not to request direct economic assistance for the U.K. in fiscal’52. However, they have asked and we have agreed to retain as great a degree of flexibility as possible in our presentation to Congress to provide for contingencies.

While the British will receive end-item assistance, our present thinking is in an amount far below their estimates. This has not yet been talked out and may be a source of potential disappointment.

The U.K. is especially concerned over our criterion that economic assistance should not result in increased gold or dollar reserves. They are apprehensive that if this is frozen into policy or legislation it would (a) prejudge the burden-sharing exercise on which they have placed great hopes and a commitment from us for a fair hearing and (b) that this criterion just does not fit the U.K. where complete external balance of accounts, not merely dollar and gold, is the important factor.

The decision of no direct aid while a logical one has a serious potential for generating ill-will. This will be especially true if inadequate supplies of raw materials bring about serious dislocations in the U.K. economy.

ii. far eastern questions

The British have been fearful that General MacArthur would by some unilateral or some impetuous local action involve the U.S. in a major Far Eastern war with Communist China with commitment of maximum U.S. forces and considerable U.K. and Commonwealth forces in the Far East. If the elimination of General MacArthur from the Far Eastern picture is followed by a resolution of the pending debate in favor of the Administration, the greatest irritant to US–UK relations with respect to the Far East will have been removed.

A.
Recognition of Communist China: The British believe they are right in principle on this matter and it is likely that only events and not conversation will eventually resolve the issue. The British public apparently supports the government’s position.
B.
The Question of Chinese Communist Representation in the UN: The British have tried to obtain a seat for the Peking Government in the UN on the grounds that the Peking Government is the de facto ruler of Continental China and should be allowed to speak for the Chinese people. Again, the British feel they are right as a matter of principle and this probably also can only be settled by events.
C.
Additional Measures Committee: There are two fundamental differences on this question (a) timing, (b) whether sanctions would aid or hinder the reaching of a peaceful settlement. An agreement should be possible on economic sanctions as our proposal does not go further than COCOM action already undertaken in secret by the British.
D.
Hong Kong: The British have been cooperating well in restricting shipments of strategic items but are unwilling to make this fact known. If they could be persuaded to do so it would remove a very important source of criticism of them in this country.
E.
Formosa: The present status of Formosa is not a point of current friction between the U.S. and the U.K. as Attlee agreed in November that now is not the time to turn Formosa over to the CPR. If and when a definite settlement comes up, there is a possibility of serious disagreement
F.
Japanese Peace Treaty: The British have shown sincere evidence of a desire to cooperate. The major issue between us is whether the Communists should or should not be brought into the peace settlement. There have been indications from London that the U.K. would welcome compromise suggestions from us on this.
G.
Korea: The difference on economic sanctions has been mentioned. The British are adamantly opposed to political sanctions. They believe every effort should be concentrated on the finding of a negotiated settlement and it is probable that the British would be willing to pay a greater price for such a settlement than we have felt would be justified.

iii. europe

A.
Spain: The U.K. Government rather bitterly resents our going forward with conversations in Madrid without fuller consultation with them.
B.
German Rearmament: This has not yet become a point of difference but there are indications that the Government and segments of the Labor Party and the public have had second thoughts on the question. It may well become troublesome if and when a Ministerial meeting with the Soviets takes place.
C.
Command Appointments: The Admiral Fechteler incident became a point of political issue in the U.K. It is very important therefore that U.K. sensibilities be taken fully into account in future command decisions and that the current proposal of the JCS be handled with the utmost caution and discretion.
[Page 940]

iv. middle east

A.
Iran: The nationalization of oil by the Iranian Majlis has created great difficulties for the British Government and the Anglo-Iranian Oil Company. The U.S. Government for some months strongly advised the U.K. to insist that the Company make a satisfactory arrangement with the Iranians, but this was not done with the result that the Iranian Parliament voted to nationalize oil. Ambassador Franks, supported by Foreign Office officials, informed the Department of the proposals that the Company intended to put forward to the Iranian Government. In our discussions, it was clear that our assessment of the seriousness of the situation differs. Although this plan was not considered satisfactory by State Department officials as we felt it did not go far enough to permit Iranian officials to implement it under the label of nationalization, it contained some good points. Hence, while we said we could not actively support this plan and asked them to consider doing more, we indicated we would assume a benevolent attitude. This disappointed Sir Oliver and it is obvious the British expect more support. We feel it is vitally important for the British to offer more in their own interest. Nevertheless, a point will be reached when she feels she has reached her limit. At that point, within limits, we feel the U.S. should be prepared to render strong support as this is a case involving direct U.K. interests. This has not been cleared by NEA and probably would not be approved by NEA in this form.
B.
India: The fact that India has remained within the Commonwealth, despite the very loose ties that bind it, is a source of strength to the U.K. Consequently, Whitehall makes every effort to continue and to strengthen this relationship, and it implements this effort by placating Mr. Nehru, or supporting him when possible, on many of his attitudes which are considered by the U.S. as damaging to the position of the free world. This fact should be kept in mind in assessing U.K. Far Eastern policy.

v. negotiating with soviet union

We have had difficulties with the British in the Deputies meeting in Paris where the British line has been softer than ours.3 This has been partially due to the personality of Mr. Davies but fundamentally to the strong feeling on the part of the British Government that public opinion would not countenance a break-up of the Paris meeting for which the West was responsible. U.K. public opinion strongly feels that every avenue of possible negotiation [Page 941] with the Soviets must be tried. This is due in part to a realization on the part of the public of the exposed position of the British Isles to atomic bombing. There is no concrete evidence, however, that the British would be “soft” in a Ministerial meeting itself although there are intimations that they might be more inclined than we to make some kind of a deal involving Germany’s demilitarization.

  1. The source text was attached to a memorandum from Perkins to Webb, dated April 30, which stated that another copy had been sent to Secretary Acheson a few days before. The memorandum was drafted by Raynor.
  2. The source text bears the handwritten notation “Sec[retary] saw. L[ucius] D. B[attle]”.
  3. For documentation on the British attitude during the Four-Power Exploratory Talks at Paris, March–June, see vol. iii, Part 1, pp. 1086 ff.