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Conference files, lot 59 D 95, CF 140

No. 391
Communiqué on the United States–United Kingdom Economic and Financial Talks

Representatives of the United States and the United Kingdom today concluded their discussions on measures for creating the economic and financial conditions under which the countries of the free world may be better able to earn their own living by their own industry. These conversations were informal and raised questions on which it was understood in advance that no commitments would be made.

The United Kingdom representatives explained the suggestions which emerged from the Conference of Commonwealth Prime Ministers, held in London in December of last year,1 for measures which might be taken to restore balance in the world economy through the channels of commerce and to develop, by progressive stages, an effective multilateral trade and payments system over the widest possible area. These measures would involve action by the Commonwealth countries, the United States, the countries of continental Western Europe, and the countries that are members of existing international trade and financial institutions.

The discussions covered the internal and international conditions which would have to be established in order that each country might enjoy the human and material benefits of freer and dependable currencies and a larger volume of trade and commerce.

They also included a review of the overall economic and fiscal situation of the United States. Note was taken of the significant United States defense expenditures overseas, including off-shore purchases.

From these conversations, certain conclusions have emerged:

There is full agreement between the two governments that the solution of the economic problems of the free world is vital to its security and well being.

They also agree that the essential elements of a workable and productive economic system within the free world should include:

(a)
Sound internal policies: international economic policies cannot succeed unless they are based on sound internal policies, by debtor as well as creditor countries. During the course of the conversations, the United States representatives made it clear that the [Page 963]Government of the United States welcomes the intention of the Commonwealth Governments, expressed in their December communiqué,2 to follow the internal financial and economic policies needed to achieve a freer exchange of currencies and trade.
(b)
Freer trade and currencies: the freeing and expansion of world trade must cover currencies as well as trade. On the financial side the objective should be the eventual convertibility of sterling and other currencies and the gradual removal of restrictions on payments. On the trade side the objective should be to bring about the relaxation of trade restrictions and discriminations in a way which, in the words of President Eisenhower’s State of the Union Message, “will recognize the importance of profitable and equitable world trade”.3 It is in the interest of the United States to take such measures as are exemplified in the President’s Message in order that the members of the free world may the better pay their way by their own efforts.
(c)
Development: the creation of conditions, both by creditor and by debtor countries, which will foster international investment and the sound development of the resources of the free world. In this connection, the Government of the United States emphasized its intention to encourage the flow of investment abroad.
(d)
Organization: international institutions should be constructively used to promote these policies.

The Government of the United States welcomes the initiative taken by the United Kingdom Government in connection with these problems of common concern.

The two Governments believe that there is reason to hope for continued progress toward a better balanced, growing world trade and toward the restoration of a multilateral system of trade and payments. The nature and scope of the measures which may be taken by governments to further such progress, and the timing of such measures, will require further study.

The Government of the United States will undertake, and continue over the next several months, an intensive examination and review of the general subjects discussed at the present meetings, including the suggestions resulting from the Commonwealth Economic Conference, and possible alternative suggestions, in order to arrive at a sound judgment with respect to the specific courses of action which might be taken. The two Governments intend to have further discussions with each other, with other governments, and with the international organizations concerned, including the Organization for European Economic Cooperation.

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[Here follows a list of the representatives participating in the talks.]

  1. Regarding the Conference of Commonwealth Prime Ministers, see Documents 371 and 372.
  2. For the text of this communiqué, see Documents (R.I.I.A.) for 1952, pp. 62–67 or Department of State Bulletin, Mar. 16, 1953, pp. 397–399.
  3. For the text of President Eisenhower’s State of the Union message, delivered Feb. 2, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1953, pp. 12–34.