Office of the Historian

46. Telegram From the Embassy in the United Kingdom to the Department of State1

London, September 12, 1955—7 p.m.

998. Thorneycroft2 and Lee3 expressed to Clarence Randall and Embassy officers in strongest terms serious adverse psychological effect decision bicycle and Chief Joseph Dam4 cases would have in [Page 151] UK. Stressed fact that in view leadership position US and closeness with which every US action watched for indications trend US policy, these decisions would have highly dampening effect on efforts individual UK manufacturers export to US with consequent adverse effects balance of payments prospects. Moreover, decisions would be widely used by pressure groups in UK seeking persuade government adopt protectionist measures. Stressed their statements not usual protest that might be expected but reflected really deep concern in UK Government public and parliamentary circles. Chancellor expected raise this issue personally with Secretary Humphrey in Istanbul.

Decisions obviously render rather more difficult our representation for larger UK import quotas US motorcycles, whiskey, etc., and create poor climate for representations for further restrictions on export generators Soviet bloc.

They also likely reduce effectiveness Secretary Benson’s statement on need for greater markets US agricultural products abroad and make more difficult US negotiating position on fruit program.

Reliably informed Polish Embassy endeavoring exploit Chief Joseph Dam case by suggesting various trade propositions even though they had no real intention buying products involved. Polish informant expressed view effect decision on East-West trade might be significant.

Recent decision ODM5 establish committee determine basis award bids machine tools to foreign firms adds to uneasiness especially as it appears on same day as report that UK machine tools are selling rather well in US.

Aldrich
  1. Source: Department of State, Central Files, 411.004/9–1255. Official Use Only.↩
  2. Peter Thorneycroft, President of the British Board of Trade.↩
  3. Frank Lee, Permanent Secretary of the British Board of Trade.↩
  4. Defense Secretary Wilson rejected the British bid in August 1955 even though it was 17 percent below the best domestic offer. Wilson based his decision on Section 3(c) of Executive Order 10582 promulgated December 17, 1954, which stipulated that a contract could be awarded to a higher bidding U.S. company which agreed to perform the required work in an area of high unemployment. Westinghouse Electric and Pennsylvania Transformer, which were granted the contracts, both had plants in Pittsburgh, certified by the Secretary of Labor to be an area of a substantial labor surplus. For text of the 1954 Executive order and the accompanying White House press release, see Department of State Bulletin, January 10, 1955, pp. 50–51.↩
  5. U.S. Office of Defense Mobilization headed by Arthur S. Flemming.↩