841.00/1–753: Telegram

No. 372
The Ambassador in the United Kingdom (Gifford) to the Department of State 1

secret

3716. Washington pass Treasury, DMS and MSA. Limit distribution.

1.
Analysis results Commonwealth Prime Minister Conference air pouched today.2
2.
British official opinion has been divided on how best carry out consultations with US and OEEC countries. One group has urged that initial approach to US be made personally by Chancellor, probably in company with Foreign Minister, with idea that in brief visit they could get enough indication in principle that US would be willing to consider and negotiate about Commonwealth plan, to justify its discussion without major change with principal European countries or OEEC. The second group believe best procedure would be for Makins to call on Secretary State and Secretary Treasury, perhaps in late February, and hand them memorandum describing plan in some detail with an inquiry as to whether it could be considered a basis for negotiation. If, after a week or so for analysis and discussion with US government, US reactions were generally favorable, further clarifying discussions might be held at official level and Chancellor could discuss plan in preliminary way with European countries. More firm and detailed negotiations with US could subsequently take place on bilateral or multilateral basis.
3.
In discussion today with Gordon and Brown, Chancellor made clear that he feels it essential to make personal contact with new Secretary Treasury and other top US Government officers at an early date. Final preparation budget and its defense in Parliament. Impossible for him leave London between mid-March and early June. He feels latter clearly too late for first top level personal contact and therefore desires, in any event, to visit Washington before mid-March.
4.
Chancellor is aware two viewpoints referred paragraph 2 and is sensitive to difficulty getting really meaningful US reaction, even of preliminary character, on so complex a subject without advance preparation. Government, therefore, has under advisement possibility instructing Makins make preliminary presentation of [Page 881] plan in advance ButlerEden visit.3 Although no decision as yet, we rather expect that this procedure will be adopted. If so, Makins’ approach might be early February.
5.
Division also exists within UK Government as to whether consultations with European countries should be through OEEC or with France, Belgium, Netherlands, West Germany and Italy separately. Treasury and Bank favor latter course but some officials believe that OEEC will ultimately be chosen as vehicle for consultation, especially in view British chairmanship OEEC and basic political considerations UK–European relations.
6.
While there is general agreement on nature of plan and main steps it involves, British Government is still divided on question of how fast various measures involved should be put into effect. Treasury and Bank seem to favor prompt and extensive action whereas Board Trade, Foreign Office, Plowden and Hall favor more gradual approach. The latter group believes this would lay firmer foundation for success of plan, and make it less likely that politicians will be confronted with really drastic and precise choices between the plan and sensitive domestic policies, in which event they fear that domestic political considerations would compel abandonment of the plan and also endanger the defense program. These persons, none of whom are devoted to controls for their own sake, also believe that failure of this plan similar to 1947 would be really catastrophic, that it would postpone indefinitely another effort at convertibility, that it might undermine the present government and strengthen Bevanism, and that it might threaten a major breach in Anglo-American relations.
Gifford
  1. Repeated to Paris.
  2. Despatch 3070, Jan. 5, not printed. (741.022/1–553)
  3. For documentation on the ButlerEden visit to Washington, Mar. 4–7, see Documents 375 ff.