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

Europe,   pp. 196-654 PDF (168.7 MB)


Page 404


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FOREIGN RELATIONS, 1947, VOLUME III
  I think this doubt legitimate. It arises primarily from the compo-
nent doubts concerning the full efficacy of the present approach as a
solution of the problems of England and Germany. In neither of these
cases am I sure that we have faced the facts. The replies which were
submitted by the bizonal area to the questionnaire sent in by the Paris
Conference showed a future German economic development based on
several optimistic assumptions. A key assumption, for example, was
that the output of steel could be -brought within four years to a figure
of ten million tons per annum. Another was that adequate export
markets would exist and that the terms of trade would develop in
Germany's favor. Nevertheless, this reply, too, did not show complete
hope of "viability" at the end of the four-year period.
  In the case of England, the situation is similar. On the same sort of
optimistic assumptions, people in Paris can see Britain at the end of
the aid program almost self-sufficient, not quite. If these assumptions
should prove to be unsubstantial, the gap would be greater.
  But in the case of Britain things are complicated by the process of
internal adjustment which is now wracking the British people and
Government. We have seen that only the pressure of painful necessity
can force a development in the right direction. But we have also seen
that if the pressure of necessity gets too great, the result can be a break-
ing instead of a yielding- a catastrophe instead of an adjustment.
For us to attempt to calculate with precision, on a day-by-day basis, the
exact position of this point-with-no-return and to utilize the pressure
of our foreign aid program to keep the British just close enough to
this point without letting them go beyond it, seems to me to demand
of us an operating flexibility which we do not enjoy, and therefore to
involve tremendous political risks. I am afraid that in this case the
whole process of adaptation which the British people must undergo
will become fouled up with inevitable psychological by-products of a
protracted relationship with us an [as] an object of charity.
  And again, I see no guarantee of success. With many of England's
traditional sources of income lost I think there is for her no satisfactory
economic future, in the long run, which does not include (1) a long-
term spontaneous flow of private capital from this country to England,
and (2) a considerable freedom of labor and population to emigrate
from areas in Britain where their presence is no longer economically
justified to other continents, particularly our own. In other words, the
problem of England's long-term economic future is one of flexible and
fluid adaptation to the economies of this country and Canada.
  I do not believe that this process can be successfully brought about
by inter-governmental negotiations across the barriers which now di-
vide these countries as independent and sovereign nations. For this


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