United Kingdom, 1973–1976
246. Memorandum From Secretary of the Treasury Simon to President Ford
Summary: Simon discussed Lever’s visit to Washington and the UK economic situation.
Source: Ford Library, National Security Adviser, Presidential Country Files for Europe and Canada, Box 15, United Kingdom (9). Secret. On November 3, Yeo briefed Kissinger on his recent trip to Germany, where he discussed the UK economic situation with FRG officials. (Memorandum of conversation, November 3; National Archives, RG 59, Records of Secretary of State Henry Kissinger, Entry 5403, Box 19, NODIS Memcons, November 1976)
247. Memorandum of Conversation
Summary: Ford and Lever discussed the UK economic situation.
Source: Ford Library, National Security Adviser, Presidential Country Files for Europe and Canada, Box 15, United Kingdom (10). Secret. The meeting took place in the Oval Office. Earlier that day, Kissinger told Ford: “I would not weaken now. Tell Lever you will think about it and then write Callaghan to negotiate with the IMF. If that fails, you may have to tell Burns to roll over the debt for a couple of months. I don’t think you should have this on your hands—possibly the fall of a government under very adverse circumstances.” Kissinger added, “If we turn down the British, it should not be to Lever—he has a monumental ego and we don’t want him going back saying he was kicked in the teeth.” At that point, Callaghan telephoned; Ford said that “he would be sympathetic” and would write Callaghan after hearing Lever out. After the call, Kissinger said, “I don’t know if what Burns and Simon want is doable politically. Maybe it’s necessary, but I don’t see why you should cram it down their throats.” (Memorandum of conversation, November 16; ibid., National Security Adviser, Memoranda of Conversation, Box 21) Lever briefed Kissinger on the UK economic situation on November 15. (Memorandum of conversation, November 15; National Archives, RG 59, Records of Secretary of State Henry Kissinger, Entry 5403, Box 19, NODIS Memcons, November 1976)
248. Note From the Government of the United Kingdom to the White House
Summary: The note expanded on the issue of timing referred to in Callaghan’s November 12 letter to Ford.
Source: National Archives, RG 59, Records of the Office of the Counselor, Helmut C. Sonnenfeldt, 1955–1977, Entry 5339, Box 4, Britain 1976. Secret. In a November 17 covering letter, Ramsbotham noted that Kissinger and Lever had spoken by telephone again before Lever’s departure for London and that “an hour or so beforehand, Harold had had a word with Prime Minister Callaghan, the gist of which is indicated in the attached note. Harold put the point in paragraph two to the Secretary. But I thought it would be useful for you to have the whole note, particularly paragraph three, which amplifies the Prime Minister’s perception of the timing which needs to be followed.” (Ibid.) In a November 17 memorandum to Kissinger, Sonnenfeldt reported that Lever told him that morning that he would recommend that Callaghan not accept further deflationary conditions as they would result in defense cuts and protectionist actions that would damage U.S.–UK relations and the UK’s position in the world. (Ibid., Records of Secretary of State Henry Kissinger, Entry 5403, Box 19, NODIS Memcons, November 1976)
249. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford
Summary: Scowcroft requested Ford’s approval of an attached reply to Callaghan’s November 12 letter.
Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box 25, UK (22). Secret. All brackets are in the original. Ford initialed his approval of the message including the bracketed phrase. Ford’s reply was sent to London as message WH 61612 on November 22. (Ibid.)
250. Message From British Prime Minister Callaghan to President Ford
Summary: Callaghan replied to Ford’s recent message on the UK economic situation.
Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23). Secret. Forwarded under cover of a November 23 memorandum from Scowcroft, on which a handwritten notation reads, “President has seen.” In an undated memorandum, Scowcroft informed Ford: “We are in a difficult position. On one hand, pressure on the Fund to reduce their demands on the British could impair the credibility of the agreement and thus weaken confidence in sterling. On the other hand, Callaghan believes he is up against a dire political situation. The pivotal issue is 1/2 billion pounds.” (Ibid., NSC International Economic Affairs Staff Files, Box 3, Country File, United Kingdom (5)) In his November 24 reply to Callaghan, Ford characterized any U.S. intervention in the UK–IMF negotiations as “inappropriate,” but assured Callaghan that the U.S. would “move sympathetically” on sterling balances once the UK and the IMF had achieved substantial agreement. (Message WH61623 from Ford to Callaghan, November 25; Library of Congress, Manuscript Division, Kissinger Papers, Box CL 148, Great Britain, Chronological File, 15–30 November 1976)
251. Memorandum of Conversation
Summary: Ford and Schmidt discussed the UK economic situation, oil prices, and North-South relations.
Source: Ford Library, National Security Adviser, Memoranda of Conversation, Box 21. Secret; Nodis. The memorandum is incorrectly dated “November 23 (?)”. Ford and Schmidt talked by telephone on November 24 from 9:22 a.m. to 9:38 a.m. (Ibid., White House Central Files, President’s Daily Diary) Earlier that day, Ford sent Schmidt a message on the UK economic situation. (Message WH61616 from Ford to Schmidt, November 24; ibid., Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23))
252. Memorandum From Secretary of the Treasury Simon to President Ford
Summary: Simon reported on his recent trip to London.
Source: Ford Library, L. William Seidman Papers, Economic Policy Board Sub-ject File, Box 77, Memoranda to the President, June 1976–Dec. 1976. No classification marking.
253. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford
Summary: Scowcroft relayed a message from Callaghan on the UK negotiations with the IMF.
Source: Ford Library, National Security Adviser, ]Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23). Eyes Only. A handwritten notation at the top of the memorandum reads, “President has seen.” Ford and Callaghan talked by telephone on December 1 from 11:25 a.m. to 11:39 a.m. (Ibid., White House Central Files, President’s Daily Diary) No memorandum of conversation on this discussion was found. In a December 1 memorandum to Ford, Scowcroft and Greenspan provided talking points for Ford’s telephone call with Callaghan. (Ibid., President’s Handwriting File, Subject File, Box 1, Countries—United Kingdom)
254. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford
Summary: Scowcroft relayed a message from Callaghan on the UK negotiations with the IMF.
Source: Ford Library, National Security Adviser, Scowcroft Daily Work Files, Box 14. Secret. The memorandum is a copy without Scowcroft’s initials.
255. Memorandum of Conversation
Summary: Kissinger and Healey discussed the UK economic situation.
Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23). Secret; Nodis.All brackets are in the original. The meeting took place in 11 Downing Street. Attached but not published is Tab A, a November 25 memorandum entitled, “Aide Mémoire on a Safety Net for the Sterling Balances;” and Tab B, a reprinted version of a December 9 article by Edwin Dale in the New York Times entitled “British Sterling: Officials of U.S. Face 2 Options.” Kissinger was in London from December 10 to 12, where he discussed Rhodesia with Crosland.
256. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford
Summary: Scowcroft relayed a December 10 message from Callaghan on a safety net for the UK.
Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23). Top Secret. The memorandum is a copy without Scowcroft’s initials. An unknown hand wrote “Dec. 10, 1976” at the beginning of Callaghan’s message. In a December 12 message to Ford, Schmidt urged that the U.S. representative at the forthcoming Basel meeting be so instructed “as to enable the meeting to envisage the safety-net solution in so far as is necessary for Prime Minister Callaghan to tell the British Parliament on Wednesday about the fact that the safety-net is in the making.” Then, Schmidt continued, FRG and U.S. officials, scheduled to meet in Washington on December 15, should “be in a position to draw up the agreement on the safety-net for sterling balances,” enabling an announcement of “the principles of the safety-net in the later course of this week. One should hope that thereby any psychological danger for sterling balances can be avoided.” (Ibid., Scowcroft Daily Work Files, Box 14)
257. Note From the Government of the United Kingdom to Secretary of State Kissinger
Summary: The note discussed the sterling balances problem.
Source: National Archives, RG 59, Records of the Office of the Counselor, Helmut C. Sonnenfeldt, 1955–1977, Entry 5339, Box 10, POL 2 United Kingdom. Secret. Sent to Kissinger under cover of a December 13 letter from Ramsbotham that reads, “You asked this morning if I could let you have a note on the problem of the sterling balances: the “safety-net” scheme; the alternative scheme of Mr. Yeo; and what we could and what we could not accept of the latter. Here it is.”
258. Telegram 20294 From the Embassy in the United Kingdom to the Department of State
Summary: The Embassy assessed Healey’s mini-budget and the resolution of the UK negotiations with the IMF.
Source: National Archives, RG 59, Central Foreign Policy Files, 1976, [no film number]. Confidential; Immediate. Also sent immediate to Treasury. Sent for information to Bonn, Paris, Rome, the Mission to the OECD, and the Mission to the EC. On December 16, Kissinger said to Ford, “I see your Treasury is taking full credit for the IMF deal.” Ford responded, “I almost vomited when I read it.” Kissinger replied, “If it had not been for you, we would have been in the worst crisis ever right now with the British.” (Memorandum of conversation, December 16; Ford Library, National Security Adviser, Memoranda of Conversation, Box 21)
259. Memorandum From Secretary of the Treasury Simon to President Ford
Summary: Simon discussed alternative proposals for dealing with the UK sterling balances issue.
Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23). Confidential. Attached but not published is an undated memorandum entitled, “Outline of a Proposed Comprehensive Multilateral Approach to Resolution of the Sterling Balances Problem.” Sent to Ford under cover of a December 18 note from Scowcroft noting that “Simon wanted you to have this paper in connection with the 2:30 meeting today.”
260. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford
Summary: Scowcroft briefed Ford on a forthcoming meeting on UK economic issues.
Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box 25, UK (23). Secret. Attached but not published are Tabs A and B. A stamped notation on the memorandum indicates the President saw it. Ford met with Simon, Greenspan, Burns, Seidman, Yeo, Scowcroft, and Kissinger in the Oval Office at 2:35 p.m. The end-time of this meeting was not recorded and no other record of the meeting was found. (Ibid., White House Central Files, President’s Daily Diary)
261. Message From President Ford to British Prime Minister Callaghan
Summary: Ford replied to Callaghan’s December 16 message on the UK economic situation.
Source: Ford Library, National Security Adviser, Scowcroft Daily Work Files, Box 14. Secret. In a December 16 message to Ford, Callaghan thanked him for the “agreed form of words on our arrangements for dealing with the sterling balances” and “the offer of the swap facility” arranged by Burns and Simon. Callaghan noted that the swap facility and a proposed FRG standby arrangement “will help to reinforce the confidence effect of the package.” (Ibid.) In a December 22 memorandum to Kissinger, Rogers reported “a breakthrough” on sterling: “They agree in principle, first to phase out sterling as a reserve currency, second to conditionality for the supplementary assistance we and the other countries provide, and third to self-funding of the balances. The details—essentially how much conditionality on their side and how many dollars on ours—will be negotiated over the next several weeks.” (National Archives, RG 59, Records of the Office of the Counselor, Helmut C. Sonnenfeldt, 1955–1977, Entry 5339, Box 10, POL 2 United Kingdom)