266. Circular Telegram From the Department of State to Posts in NATO Capitals1

18817. Following cable based on uncleared memcons of Wilson talks is FYI, Noforn, and subject to revision upon review:2

During one day Washington visit Prime Minister Wilson had one hour private conversation with President followed by meeting in which Secretaries Rusk, McNamara, and Fowler, and Under Secretary Ball participated. President’s toast at luncheon for Wilson emphasized in warm terms continuing close cooperation of US and UK in cause of peace.3 President expressed confidence that UK would prevail in present difficulties which he compared with challenge of World War II. President noted Prime Minister was now asking of British people same fortitude which turned the tide in those days.

Private talk between President and Prime Minister covered Wilson’s trip to Soviet Union, economic problems, Vietnam, the German situation and the British position East of Suez.4

Prime Minister in discussing visit to Soviet Union in larger groups said Kosygin in course of nine hours of conversations had given no encouragement whatsoever concerning possibility of Geneva meeting on Vietnam. Kosygin had been strongly critical of President but at least as strong in criticizing Chinese. Wilson believes Kosygin sincerely fears escalation Chinese intervention and confrontation between US and China. Wilson said he thought we may have been too complacent in assumption Chinese would not come in. In response Secretary’s query Wilson said he thought Kosygin in refusing to go to Geneva influenced more by Chinese aspect than by Hanoi’s views. Prime Minister said he had pressed Kosygin hard on US POW’s in North Vietnam.

In discussing UK balance of payments problem Prime Minister pointed to 9% increase in exports in first five months of 1966 including rise of 23% in exports to US but said economy had been “blown off course” by sharp increase in price imported materials, adverse capital [Page 559] account movements, and worst of all seamen’s strike. He described Draconian measures adopted by his Government and stressed his determination in dealing with situation. Wilson said devaluation of sterling would not be good thing recalling worldwide repercussions which followed devaluation of the 30’s. Prime Minister said UK financial problem had been exaggerated and some British financiers showed their political prejudices in voicing their views.

Wilson and Secretary Fowler exchanged views on problems of increasing international liquidity. Secretary Fowler said there had been enough agreement at Hague meeting of Group of Ten to enable us to move into IMF. We should press hard with idea of establishing machinery for handling liquidity problem in time for September 1967 IMF meeting. Prime Minister said it was important to reach US-UK agreement before this meeting.

With respect overseas military expenditures Prime Minister said there would be cuts. He would deal with confrontation situation in Malaysia when it was clear confrontation had ended not before. Troops in Germany presented difficult problem for both US and UK. President referred to prospect US ship purchases in UK to value of $23 million, $15 million from shifts of air units from France to UK and purchase of Rolls Royce engines as adding up to $100 million. Wilson expressed satisfaction with these arrangements. He suggested possibility of withdrawing presence while maintaining commitment to Libya, reduction of activities in Malta and hope US could help by increasing repair work US Sixth Fleet in Malta.

In separate discussion with members of Prime Minister’s party Secretary McNamara said he did not think Germans would agree to meet full British offset request. Germans feel both US and UK forces overmanned and believe there must be cheaper way of maintaining these forces. Secretary McNamara said this could be studied. For example, UK air squadrons in Germany could just as well be maintained in UK. Also we should take greater account of air transport mobility and pay less attention to geography factor and concentrate more on “time readiness.” Sir Burke Trend said UK had attempted to do this in Defense Review and thought NATO should make systematic study of problem. Secretary McNamara agreed but said study should proceed in way which would not weaken public confidence in NATO. Secretary Rusk noted that there are two parallel trends: one a feeling in Europe that threat has lessened and on other hand danger that there will be loss of confidence in NATO if military structure weakened. Europeans feel they can relax their efforts but expect US to continue its full contribution.

On question UK membership in Common Market Prime Minister said some people in his own party and most of press thought UK [Page 560] should cut world role and go in. He said UK anxious to join on good terms but not on French terms. French would insist UK break its ties with US or at very least abandon East of Suez position. Prime Minister thought time would come when UK could enter Common Market under satisfactory terms but that time not now. Sir Burke Trend said in separate conversation with Secretary that even if UK offered to sign on dotted line French would find some other reason to prevent UK entry.

In discussion of African problems with members of Prime Minister’s party Sir Burke Trend said Soviets do not appear to place Africa at top of their priority list. Secretary noted prominent role of Cubans in Congo Brazzaville.

On Rhodesia Sir Burke said sanctions biting hard but this not so apparent to man in street and thus sanctions so far have had little political effect. Under Secretary Ball said sanctions had reduced economic activity in Rhodesia but political effect at best unclear.

Secretary in discussing South Africa problem said it was possible Africans would press issue hard in General Assembly in extremist form. Under Secretary Ball said it might be difficult for UK if it were faced with decision of vetoing mandatory sanctions against South Africa. When Ambassador Dean said there would first have to be finding of threat to peace Mr. Ball noted UK had already given way somewhat on this point in the resolution concerning tankers off Beira. Discussion of arms sales to South Africa covered septel.5

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 UK. Secret. Drafted by Shullaw and approved by Stoessel.
  2. Copies of the memoranda of conversation are in the Johnson Library, Bator Papers, UK Problem. A memorandum of the portion of the conversation dealing with the international monetary situation is in Foreign Relations, 1964–1968, vol. VIII, Document 102.
  3. For text, see Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1966, Book II, pp. 790-792.
  4. For Wilson’s version of these discussions, see The Labour Government, 1964-1970, pp. 263-264.
  5. Telegram 19147, July 30. (National Archives and Records Administration, RG 59, Central Files 1964-66, AV 12-2 S AFR)