231. Memorandum of Conversation1

SUBJECT

  • British Economic Measures

PARTICIPANTS

  • Sir Eric Roll, Permanent Under Secretary, Ministry of Economic Affairs
  • The Under Secretary G. Griffith Johnson
  • Assistant Secretary, E J. Harold Shullaw
  • Director, BNA

Sir Eric Roll gave the Under Secretary three copies of the statement being made by the British Government on October 26 concerning the urgent economic measures it is taking to deal with the balance of payments problem.2 Sir Eric said he wished to stress the speed with which the new government has tackled the problem and the new approach which it represents. He said the contrast was not only with respect to the Conservative stop-go policies, but also with respect to Labor’s former policies. He said the leaders of the new government had rejected a return to the Sir Stafford Cripps siege economy measures of 1946-1947. Sir Eric expressed the view that this is a very significant development and, if the course is maintained, it can affect the whole range of government policy, and not alone on the economic side.

In response to a question from Mr. Johnson, Sir Eric said that he did not expect that there would be a drawing from the IMF before the end of November or early December. In the discussion which followed on the statement to be made by the Department on October 27, concerning the British measures, Sir Eric offered a number of minor suggestions but expressed himself as satisfied with the positive and helpful character of the proposed statement. He undertook to endeavor to obtain a public statement by a United Kingdom minister regarding the Kennedy Round negotiations to be made shortly after the British statement on the balance of payments measures.3

  1. Source: National Archives and Records Administration, RG 59, Secretary’s Memoranda of Conversation: Lot 65 D 330. Secret. Drafted by Shullaw and approved in U on October 27. The meeting was held in Under Secretary Ball’s office. Roll was sent by Prime Minister Wilson to explain British economic policy to U.S. officials. Wilson’s correspondence with President Johnson on the subject, together with a statement of U.S. policy, are in Foreign Relations, 1964-1968, vol. VIII, Documents 13, 14, and 16.
  2. The statement announced a plan to correct the U.K. balance-of-payments deficit. The plan’s principal measures comprised a 15 percent surcharge on all manufactured or semi-manufactured imports and a system of export rebates. Extracts of the significant portions of the Government White Paper, “The Economic Situation,” are printed in Keesing’s Contemporary Archives, 1963-1964, pp. 20939-20994.
  3. Apparent reference to a November 3 speech by Chancellor of the Exchequer James Callaghan. For extracts of the significant portions, see ibid., pp. 20395-20396.