82. Message From British Prime Minster Wilson to President Ford 1

Jim Callaghan and I are looking forward very much to our visit to Washington at the end of next month,2 when we hope to be able to [Page 280]discuss all the major issues confronting the Western world. However, I felt it would not be right to wait until then to share with you one particular anxiety I have.

As you will know we have all been watching with close attention your efforts to minimise unemployment while continuing to fight inflation. Of these two grave threats to our economies—and ultimately perhaps to our cohesion and our institutions—the former seems to us to be growing more serious.

To a major extent the decline in activity and growth which is taking place is certainly attributable to the five-fold increase in world oil prices, which has taken huge sums of money out of the normal circulation and put it into the reserves of a few governments. This deflationary impact is thus one aspect of the complex of financial, economic, energy and trade problems which the action of the oil producers has set us. All of them need to be tackled by co-operative effort, and your Administration has given invaluable leads in this direction. It is, I think, no less true in this economic aspect than in the others that we all need to have continuously in mind the effect on others of our own actions and policies.

We in the United Kingdom have thought it right against this background to stimulate activity and many of our European allies are doing the same. Each one of us by doing so helps to avert a socially dangerous build-up of unemployment within his own country and at the same time helps to maintain international activity and to reduce the temptation for the more hard pressed countries to fall back into measures of a protectionist nature.

But the US is the motor of the industrial world: and if the motor fails then the rest of us will inevitably come to a halt. The published indicators which have come out in the last few weeks have successively shown a picture of a motor which is indeed slowing down. The recession now looks likely to be deeper and longer than had been expected and I understand that even the more optimistic forecasters do not now expect any significant upturn before the second half of 1975.

It is right to let you know that for us in Britain, and no doubt for many others, this is a deeply worrying prospect. The confidence of business, the support of labour for domestic economic policies of freedom from restriction in international trade all depend on the conviction that all our governments will act to prevent recession from deepening into depression.

I look forward to discussing all this with you and telling you something of how we are tackling our problems in Britain, but wanted to express my concern now because I know that you will be thinking about economic matters in the next week or two.

  1. Source: Ford Library, National Security Adviser, KissingerScowcroft West Wing Office Files, Box 24, United Kingdom (18) (9/11/74–12/31/74). No classification marking. Forwarded under cover of a December 30 letter from British Ambassador Rams-botham to President Ford. Kissinger subsequently forwarded both documents to the President under cover of a December 31 memorandum. (Ibid.)
  2. Prime Minister Wilson visited Washington January 29–31, 1975.