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United States Department of State / Foreign relations of the United States, 1947. The British Commonwealth; Europe
(1947)

The British Commonwealth of Nations,   pp. 1-195 PDF (70.7 MB)


Page 1


THE BRITISH COMMONWEALTH OF NATIONS
                     UNITED KINGDOM
CONCERN OF THE UNITED STATES OVER THE FOREIGN EX-
          CHANGE POSITION OF THE UNITED KINGDOM'
841.50/1-1847
    The Secretary of State to the Embassy in the United Kingdom
SECRET                             WASHINGTON, January 18, 1947.
No. 714
  The Secretary of State refers to the Embassy's report No. 1449, the
Comnm7ercial and Economic IWeekely for December 2, 1946.2
  The Department has taken special note of the section in the fore-
going report entitled "Export Drive and Dollar Parsimony," in
which the Embassy refers to recent pronouncements on the part of
British Government officials dealing with the allegedly unsatisfactory
dollar exchange position of the United Kingdom. In general, the
Department is inclined to agree with the Embassy's belief that this
series of statements has been undertaken with an eye to the future
rather than the present. The possible motives for such action advanced
by the Embassy appear to be plausible. Another motive that had been
suggested in the Department before receipt of the Embassy's report
was a possible desire on the part of the British to utilize the sterling
balances as a means of strengthening the United Kingdom's export
position after the present seller's market will have run its course.
According to this view, the British may not object to the passage of
some time before they reach settlements on the sterling balances. In the
meantime, they will use those balances to maintain or extend the United
Kingdom's trade position in the creditor countries. It was also sug-
gested that the recent emphasis on balance-of-payments difficulties
night be a first step in an attempt by the British to obtain a concession
with regard to Section 10 of the Financial Agreement,3 such concession
to consist of the privilege of paying the funded part of the sterling
settlements in inconvertible sterling, that is with British exports.
  1 For previous documentation, see Foreign Relations, 1945, vol. VI, pp.
1 if.
  2 Nolt found in Department of State files.
  'For text, see Department of State Treaties and Other International Acts
Series (TIAS) No. 1545, or 60 Stat. (pt. 2) 1841.


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