15. Circular Telegram From the Department of State to Certain Posts1
739. For policy guidance and background information texts are reproduced below of statement by State and press release by Treasury Department concerning new balance-of-payments program announced today by United Kingdom government.2
In discussions of new British program, US reps should indicate some reservation and caution as to acceptability of British line of action, in spite of fact that public statements by USG necessarily somewhat optimistic since faced by fait accompli. US of course recognizes need for remedial measures by UK. At same time problems will be created for international economic policies and multilateral arrangements such as GATT and IMF. Much will depend on implementing measures adopted by UK and on duration of program. Further guidance will follow as appropriate, and reporting of effects and reactions to British program is requested.
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Statement by State Department to press, October 26:
US Comments on British Moves to Deal with Balance of Payments Problems
The United States Government welcomes the speed and vigor with which the British Government has moved to deal with the problems relating to its balance of payments and to the underlying economic situation of the United Kingdom. While we naturally regret that the situation has led the British Government to deem it necessary to resort to emergency import charges, we are gratified that these charges are to be non-discriminatory, and by the categorical assurance that the charges are strictly temporary and will be reduced and eliminated as soon as possible. The United States Government is confident that the wholehearted cooperation of the British Government in the Kennedy Round will in no way be impaired. The United States Government stands ready to cooperate in any way that it appropriately can with the British Government in dealing with these problems.
For release at 9 A.M., Eastern Standard Time, Monday, October 26, 1964
[Page 31]The United States Treasury today issued the following statement:
The new British Government has acted promptly and effectively to maintain the strength and stability of the pound sterling. Its temporary measures strike at the inflated imports which have been the principal source of immediate pressure on the pound. Its longer-run measures affecting productivity, incomes and prices can provide the improvement that is needed in the competitive position of the United Kingdom in world markets.
It is gratifying that the action taken is nondiscriminatory in form and avoids any damaging repercussions upon the functioning of the international monetary system. The import charges will for a time have a moderately adverse effect upon our trade as well as upon that of other countries but there is no painless corrective, either for the United Kingdom or for the rest of the world. The United States welcomes the British determination to reduce and remove these import charges at the earliest opportunity.
Existing arrangements for international financial cooperation have proved their effectiveness in recent years and are again demonstrating their capacity to maintain the smooth functioning of the international monetary system.
- Source: Department of State, Central Files, FN 12 UK. Limited Official Use; Priority; VerbatimText. Drafted by Leocade Leighton (E/OFE) on October 26; cleared by Frank M. Tucker (EUR/BNA), Joseph A. Greenwald (E/OT), Thomas E. Summers (EUR/RPE), and Widman (Treasury); and cleared by Benjamin Caplan (E/OFE). The telegram was sent to 56 posts.↩
- Regarding the October 26 British announcement, see Document 13.↩