Foreign Relations of the United States, 1964–1968, Volume XII, Western Europe

264. Memorandum From the Under Secretary of State (Ball) to President Johnson ¹

Washington, July 22, 1966.

SUBJECT

• Harold Wilson’s Visit—The Opportunity for an Act of Statesmanship

When Prime Minister Wilson comes to Washington eight days from now we can follow one of two lines of policy:

We can discuss his monetary measures, review additional ways and means of bolstering the pound, press the British to put troops in Thailand and to maintain their expense expenditures, and offer to juggle our military sales arrangements to make this easier for them.

This follows the general line of short-term improvisation that has marked our relations with a succession of British Governments since the end of the war. It is the course of least resistance; it is what Wilson expects and he will come prepared for it.

The alternative is to look beyond the immediate present and to talk with Wilson in some depth about the longer-range relations between our two nations based on a clear understanding of the respective roles which each country should play in the development of a rational world system. This is a difficult and rigorous exercise. It requires that each of us clearly face reality.

Britain must recognize that she is no longer the center of a world system but that she can nevertheless play a critical role by applying her talents and resources to the leadership of Western Europe. We, on our part, should face the fact that it is basically unhealthy to encourage the United Kingdom to continue as America’s poor relation, living beyond her means by periodic American bailouts. We must, in other words, redefine the so-called “special relationship” in terms consistent with the longer-range interests of both our nations.

This is a good moment to begin. Compelling political and financial reasons combine to make it necessary and profitable for Britain to set a realistic course; at the same time they provide us the leverage to help bring this about. It is imperative that we use that leverage with a strong and clear purpose.

I recommend, therefore, that we urge on Prime Minister Wilson the following propositions:

Proposition One—Britain Cannot, by Herself, Continue to Play a World Role.

To solve her problems Britain must adjust her national aspirations to the limitations of her resources in the perspective of the present world power structure.

The United Kingdom is no longer the center of an effective world system. The Commonwealth has become little more than a figure of speech; it has meager meaning in a power sense—and not much meaning in a commercial sense. The “new” Commonwealth has no collective significance; at most it is a series of bilateral arrangements that are rapidly wasting away. The “old” Commonwealth is gradually fading out. Prime Minister Holt told me, for example, that for the first time in history the Australian papers were openly questioning the value to Australia of the “fiction” of allegiance to the Queen.

The problem for Britain is primarily psychological. Unlike the continental European nations, it did not have the shock of defeat and occupation to break it out of old molds of thought. It has not found it easy to relate its own internal social revolution to the acceptance of a new national role.

Here is where American influence and American policy can make the critical difference. For Britain—by itself—is unlikely to adjust to the facts of a new world environment quickly enough to check a developing imbalance in European affairs that can be dangerous for all of us. She needs the stimulus of American leadership—or, in other words, the pressure of a determined American policy.

Proposition Two—Britain Can Play a Highly Constructive Role for Herself and the World by Moving Decisively Toward Europe.

The need for British leadership of a uniting Western Europe is obvious. De Gaulle has rejected that leadership by pursuing an atavistic nationalism. Germany obviously cannot assume it. But Britain has the prestige and ability for the task.

We should impress on Prime Minister Wilson what that role of leadership implies. The British effort should not be confined to checking the fragmentation and renewal of national rivalries toward which De Gaulle’s policies are tending. Britain should seek to turn Europe outward both in its commercial policy and its political interests—in other words, to lead the peoples of Western Europe, moving toward unity, toward a new involvement in, and responsibility for, world affairs. This is not limited to the provision of political tutelage and economic aid to a restricted group of developing nations—important as that may be. It means that a united Western Europe should play a role along with the United States in keeping the peace around the world.

Britain’s other great mission in entering Europe would be to restore the balance between Germany and its neighbors that has been disturbed by French nationalism. A uniting Europe founded on Franco-German understanding has been increased by the fact of British aloofness, for a United Kingdom standing apart from Europe acts as a lodestone, drawing with unequal degrees of force on the individual parts of the European body corporate.

Britain within Europe, on the contrary, would provide the balance for a strongly-based European structure. It would dilute the bilateralism of the present Franco-German relationship which, by itself, is inherently unstable. It would give Western Europe a sense of completeness that should go far to assure its durability.

In this way we might tend to check the dangerous tendencies which French nationalism is already producing—tendencies which if continued could lead to the unhealthy situation of a disaffected Germany bound to the West by an increasingly irksome bilateral relationship with the United States and threatened with permanent discrimination by her neighbors on both sides.

Proposition Three—Entry into the Common Market Is Essential to British Financial Rehabilitation.

An equally compelling argument why Britain must join the Common Market is that otherwise she will never be able to put her economy in order.

No British Government, whether Labour or Conservative, has the political strength to bring about the structural changes in the British economy and in the attitudes and habits of both labor and management that are necessary to make the economy modern and competitive. This can only be done by subjecting British industry to the pervasive impact of competition—to what Harold Macmillan described as “the cold douche of a big market.” The measures announced on Wednesday² do not go to the heart of the matter; they will do nothing significant to increase productivity and will in the short-run discourage necessary private sector investment.

Proposition Four—Britain Should Offer to Sign the Rome Treaty as Now Written. ³

Wilson is likely to reply to these contentions that France is still threatening to interpose its veto to British accession to the Rome Treaty, and that, in any event, Britain cannot join Europe until it has negotiated adjustments in the Treaty arrangements to take care of domestic agriculture, New Zealand agriculture, etc.

The answer is that Britain’s tactics are placing it at a hopeless disadvantage against French obstructionism.

The French Government has said that if Britain were prepared to join the Treaty as written it could do so immediately. Britain, as an applicant, has little bargaining power; Britain, as a member, would be in strong position to work out the requisite adjustments since, on each issue, it could make common cause with one or more combinations of other Community nations.

If, therefore, Britain were to make clear its willingness to sign the Treaty, France would be hard-put to find a basis for objection.

Wilson’s likely rejoinder is that the British public is not ready for a decisive move toward Europe at this time. But a recent Gallup Poll has shown that 70% of the people favor entry into the Common Market if the British Government thinks it wise (as compared with 28% in 1963 at the time of the French veto). Moreover, the Labour Party would, in effect, be stealing the Tories’ clothes, since Heath has already indicated he would pursue this course if the Conservatives came to power.

Proposition Five—Britain Could Contribute Both to Non-Proliferation and to European Stability by Giving Up Its Nuclear Deterrent.

The final aspect of a rational United States policy toward Britain concerns nuclear weapons.

The Labour Party ran for office in 1964 on the promise that it would give up its nuclear deterrent. We should urge Prime Minister Wilson to live up to that promise. Britain definitely cannot afford the resources and foreign exchange that go into the construction of the present four nuclear submarines. It gains little in world prestige by being a nuclear power but it could gain great respect from the world by taking the statesmanlike step of getting out of the business.

There is reason to think that Wilson may hope some day to trade off cooperation in nuclear weapons matters with the French as the price of entry into the Common Market. This is, however, an illusion we should discourage. So long as De Gaulle rules, the French will have no interest in sharing any part of the control of the bomb with any other country, and it is certainly not in our interest to promote Anglo-French nuclear cooperation that is designed to perpetuate two national nuclear systems. Moreover, a considerable part of British nuclear technology has been provided by the United States and Britain has no right to give it away. We should make this clear to Wilson.

By giving up her national nuclear deterrent Britain could strike a dramatically effective blow against the spread of nuclear weapons.

The Wilson Government is pressing hard for a treaty with the Soviet Union in order to stop other nations from obtaining nuclear weapons. But British activities in this direction are likely to do more harm than good, since it is unedifying for a nation of fifty million people to insist that it must maintain a national deterrent, while contending that India with its 350,000,000 peoples and Japan with its 100,000,000 should accept self-denying ordinances. The British position is particularly galling to its former colonial dependency, India, since it gives a colonialist cast to the whole non-proliferation effort.

Continuation of the United Kingdom national deterrent has a considerable effect on Indian and Japanese nuclear appetites. By contrast, an evident United Kingdom determination to abandon the national deterrent could make it easier for these countries to remain non-nuclear.

Britain’s abandonment of its national nuclear deterrent would bring a second important result in greatly easing the problem of nuclear sharing, particularly for Germany. If Britain feels that she cannot give up her nuclear deterrent to any collective arrangement in which the Germans might participate then the alternative is for it to get out of the business altogether.

This act in itself would make the German problem manageable. Given the status of Britain in German psychology, parity with the United Kingdom would be a full answer to the anxiety over nuclear discrimination.

Proposition Six—The United Kingdom Should Be Encouraged to Move Toward a European Defense Community.

Some thought is being given to such a proposal in the British Foreign Office. Whether or not the United Kingdom succeeds in joining the Common Market a British proposal for a European Defense Community—functioning within the NATO framework—would dramatize United Kingdom intentions toward Europe.

Almost certainly this proposal would be turned down by France. Yet it would still have powerful appeal to the other Five and they might be prepared to move forward in this sector without France. The creation of such a Community would facilitate the solution of many issues—including the disposition of the United Kingdom nuclear deterrent, the future organization of NATO and the technological gap.

THE UNITED STATES HAS THE LEVERAGE TO ACCELERATE THESE DECISIONS

Up to now, we have made continuing investments in our so-called “special relationship” with Britain, but have received only limited benefits in return. The relationship does, however, provide leverage by which we can encourage the steps spelled out in this paper—provided we are willing to use it firmly.

As I see it, our principal elements of leverage are the following:

A. We Can Relax the Pressure for a British East of Suez Role.

I would not recommend that we ask Britain to reduce her present East of Suez commitments. I do recommend, however, that we not press her hard to maintain them in anything like their present dimensions.

As the Wednesday announcement made clear, Britain does not propose to maintain her overseas commitments at current levels. The basic reason for this is political. Britain cannot ask the British people to sacrifice wages and profits while still paying for a world role which, they tend to feel, is more nostalgic than real. Thus—no matter what we may say about it—Britain will inevitably cut down her overseas deployments as confrontation terminates, although in any event the United Kingdom presence East of Suez will continue for a while. To the extent that she delays the process of reducing that presence as the result of American pressure, we will have to pay an exorbitant price—both financial and political. And the probabilities are, that whatever we pay we will not materially affect Britain’s inevitable withdrawal.

It is a mistake to view the problem purely in money terms. Britain’s present deployments East of Suez are costing her $263 million of foreign exchange; equally as important, they are consuming $924 million of budgetary resources which affect Britain’s ability to produce for export. In addition, there are 100,000 men East of Suez at a time when Britain is suffering an acute labor shortage at home that affects its ability to produce goods for export.

Of course, we can juggle our military assistance arrangements at different points in the world so as to help meet part of these balance-of-payments costs. But this would settle nothing in the long term; for the problem is political, not financial. Whether it be logical or not, Britain will not easily adjust to a role of European leadership so long as she continues to extend herself in order to maintain a shadow of her Nineteenth Century imperial position. Certainly, that is the way it will seem to the British people as well as the Continental Europeans.

In my view, we should, therefore, relax our pressure on Britain to do things that she will either refuse to do or will do only at substantial financial cost to us and at the expense of deflecting her attention from necessary and constructive decisions.

We should have no illusions as to the outcome. When the chips are down,

—Britain will not put troops into Thailand;

—She will maintain Singapore only a few years longer;

—She will fall back on Australia and bring her troops home once confrontation is ended.

This should, however, not make us too unhappy. It is a mistake to regard the size of the British Far Eastern presence as significantly relevant to the American commitment in that part of the world. The American people have not conditioned their attitude toward our participation in the Vietnamese war on the continued maintenance of 55,000 British troops in Malaysia. Very few of them, in fact, know about it. If Britain were to pull her men home I think it would have a miniscule effect on the American determination to stay the course.

In our current discussions the question of British overseas deployments has been posed as a matter of choice. Would we rather have Britain remove troops from Germany or diminish its East of Suez role?

In terms of the propositions I have put forward in this memorandum, the answer is clear. British troops in Germany have an immediate relevance to Britain’s participation in Europe. British troops in the Far East are a distraction from the role that Britain should play over the next few years.

I recommend, therefore, that we not use our muscle in an effort to keep a large British presence East of Suez, since we should not seek to perpetuate a transient advantage at the expense of a long-term policy. By permitting Britain to phase out her Asian deployments we can help her make the hard decision to give up the pretensions to a world role that are today diverting her from a more constructive purpose.

B. We Should Shut the Door on Financial Support to Britain’s Chronic Financial Crisis.

In spite of the words we have uttered in the past, the British Government still believes that if sterling gets into serious trouble we will rescue it. We must make it emphatically clear that this is not the case.

We have failed to be persuasive in the past because we have not made the decision ourselves that we were, in fact, prepared to let sterling go down the drain. To carry conviction on this point, we must make it clear that we are prepared, if necessary, to take unorthodox financial action to protect the dollar, that we have an arsenal of measures ready, and that we have the determination to use them.

C. We Should Make Clear Our Willingness to Participate in a Financial Operation that Would Lead to British Membership in Europe.

But, while rejecting further futile rescue operations, we should make clear our willingness to assist developments that offer a long-term solution—particularly in relation to Britain’s entry into Europe.

If Britain offered to join the Rome Treaty without prior conditions, De Gaulle’s only plausible objection would be that the United Kingdom must first put her financial house in order. The basis for such an objection is that the other Community countries should not be asked to undertake the Rome Treaty obligations to provide mutual help to a Britain running large deficits and vulnerable to the whims of the holders of its present heavy load of sterling balances.

We should make clear that—if the General were to interpose such an objection—we would be prepared to discuss with the Six how Britain’s financial affairs could be put sufficiently in order to make her an acceptable member of the European Community.

This might involve facing two problems: A controlled and limited devaluation of 10-12% in order to make British goods competitive within the Common Market; and the internationalization of Britain’s sterling balances.

I think we should welcome the chance to participate in a concerted effort with the Continental European nations to take these constructive measures if it becomes necessary. In that way we might, once and for all, remove the disturbing element of chronic British financial crises.

D. We Should Be Willing to Help the British Phase Out Their National Nuclear Deterrent.

If Wilson should decide to abandon the British national nuclear deterrent he could do so in various ways. It is not essential that he decide which way now. What is essential is that he make clear publicly his intent to do so within a definite period of time.

Whichever method of abandoning the deterrent the British may choose to follow we should be prepared to help:

• —If the British wish to phase out by way of a collective force we should be ready to help them develop such a force on acceptable terms.
• —If they simply want to get out of the business we should be ready to purchase the four Polaris submarines Britain is now building or assist in converting them into hunter-killers if that is feasible. Getting the British out of the national nuclear business would be worth a substantial expenditure in view of the contribution it would make to non-proliferation and the problem of nuclear sharing.

We should be ready to help Wilson dramatize this contribution. One way might be by a US-British-German non-proliferation declaration, (similar to the present US draft treaty) to which other countries would be invited to adhere. Within the context of such a declaration:

• —The three countries could announce their support for amending the present draft non-proliferation treaty, to preclude help to existing national nuclear deterrents after some fixed date.
• —The United States would state its intent to seek repeal to the 1958 amendment to the Atomic Energy Act⁴ which authorizes help to national nuclear programs.

E. If Additional Leverage Is Necessary to Bring About an Abandonment of the British Nuclear Weapons System, We Should be Prepared to Curtail our Sharing of Nuclear Information.

One aspect of the “special relationship” that has proved most galling, particularly to the French, has been our special arrangements for sharing nuclear technology with the British under the 1958 amendments to the Atomic Energy Act. These amendments are, however, only permissive, and the President can, by executive decision, curtail this flow of technology.

I think we should be prepared to use this power if necessary.

F. Britain’s Entry Into Europe Would Not Impair But, in Fact, Improve Her “Special Relationship” with the United States.

We must dispel the British tendency to feel that she must choose between entering Europe and maintaining the “special relationship” with the United States. The “special relationship” is something that springs from a common language and a common Anglo-Saxon heritage. We should make it clear to Prime Minister Wilson in unambiguous terms that we would find it easier to work with a Britain that was leading the drive toward a unified Europe than with a Britain that continues to be isolated from the Continent.

CONCLUSION

I have put forward the foregoing line of policy out of a deep conviction that the steps outlined are essential to a stable and healthy organization of Free World power.

I have no illusions as to what can be accomplished during Wilson’s forthcoming visit. Even if we strenuously urge the arguments I have set forth, the Prime Minister would not immediately acquiesce. But we must make a start, and time is not running on our side. We should use the opportunity of the visit to begin the conditioning process.

For if we continue to pursue our present pattern of conversation with the British—dealing with each problem on an ad hoc basis and without a clear sense of where we want Britain to go in the long-term— we shall do both ourselves and the British a tragic disservice. We shall retard a process that must go forward quickly if we are to have stability in the West.

After all, it is the timing that matters. Sooner or later the British will be forced to abandon their pretensions to world power. Sooner or later they will enter Europe. These processes are already in train.

But if we do not exercise our influence to speed them up, British actions may once more be too little and too late—as has happened so often in the past. Europe needs Britain to move toward unity. And, if Britain does not take the decisive steps to identify herself with Western European aspirations, the process of fragmentation may well outrun any British contribution to cohesion. We shall then—once again—be confronted with the conditions of a new and dangerous instability.

SUMMARY OF RECOMMENDATIONS

When the Prime Minister raises the United Kingdom economic problem, we should make clear that we wish to widen the discussion, to deal with its causes, rather than merely with its symptoms:

1. We should press the Prime Minister to make clear to the Six unequivocally the United Kingdom’s desire to join the Common Market, i.e., to accept the Treaty of Rome in full and to negotiate desired adjustments after entry. We should indicate to the Prime Minister that, if the French response isolates sterling as the main obstacle to UK entry, we would be prepared to help in financial arrangements to overcome that obstacle. Failing this, we would not be ready to join in further “bail out” operations to help the United Kingdom.

2. We should encourage the United Kingdom to put forward the concept of a European Defense Community, whether or not De Gaulle continues to veto United Kingdom admission to the Common Market.

3. We should urge the Prime Minister to fulfill his campaign pledge to get the United Kingdom to abandon its national nuclear capability, both to advance non-proliferation and to lighten the United Kingdom’s economic load. We should urge that this be done within the context of a US-UK-FRG declaration—to which other countries could adhere—that none of these countries will help or launch national nuclear programs, pending conclusion of an East-West agreement. If necessary, we should exert leverage by suspending the flow of US nuclear information to the United Kingdom under the 1958 amendment to the Atomic Energy Act (or by seeking repeal of that amendment).

4. We should not allow the Prime Minister to use the “East of Suez” issue to bargain his way out of facing these issues. We should indicate that we realize the United Kingdom intends to stay there for a while, and then eventually to phase down, and should offer no incentive for what would almost certainly prove a vain effort to alter the inevitable.

George W. Ball ⁵

1. Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 UK. Secret; Exdis. Copies were sent to Bill Moyers of the White House staff, Secretary of Defense McNamara, and Secretary of State Rusk. In an attached covering memorandum to the President, Ball wrote: “The attached memorandum represents my personal view as to how we might appropriately handle the visit of Prime Minister Wilson.”
2. Reference is to the 500 million pounds in budgetary cuts presented to Parliament on July 21.
3. Reference is to the Treaty of Rome, signed on March 25, 1957, and entered into force on January 1, 1958, which established, among other things, the European Economic Community.
4. For text of the 1958 amendment, P.L. 85-479, approved on July 2, see 72 Stat. 276.
5. Printed from a copy that bears this typed signature.