'1 • • I ' Ju · l 19' 1 e I er t ha ae a C to I e n· TOP Si CCil ET z In ascertaining why his had happened be mentioned wbol sele _p -ices up by 40 por oent This he d 1n «rtect reduced the •1cl ue or the loan'by $1 billion Secondly Canada e nd gentina bad denanded dollars to a rapidly increasing extent 1n payaent tor BritaiJl •s uporte f rw those countries end third this action roveeled a dollar snortage throuflhout tbe world which was fu nduentnl to difficulties taoed by Br1 tal n The reul 1•eason for the dif fioulti es was the slow rnto of world recovery includl ne reoover r in che Ji'ar as t and Indonesia which we1·e i mportant to tho Uni ted Kingdom The world problem bad an impact requiring very urgent action In tlleir own fie ld they mie Jlt te kG d oransive aotion by cu t1ng U K imports but thl s wo ll d start o o1role or r estrictioni sai Yihioll should be avoiued S1 r Stuttord Cr1p s interjeoted thot the U K hcli enoount e re« ineree sing ditfioultioa in ea rn1ng foreign f jl' exohnnso aentioni ng il tJ Ort h Qllioaps in l atin wnerice • end recent cancellations of u s eontraote tor exa nple · tor linen end hosiery 'l' leS'B troubles a ose rro a dollar shortege all over be world r Clay on said ld r Bevin ' a speed iu actiP g after be Secretary's speec createa a hif Jlly revornble ' l prees1on in the United States In the U S viewpoint no tur t her pie6 emeal assistance ' '4 oaaible for Euro9e Tho p ro bleit must be « ee l t w1 ch os n whole Ital · cdght today be in the worst position ot l u'Opee n countries ·cut aolut10 1 of I t alian i rcble111s must a• m1 t o proc ram for tho whole p roblem Tll u s sp oa •1ioe csaent111 l Lfr Cla ton refel rect to OJ oponi ne remeL lt by 1' r Savin bo tbe a 't'oct that the U 7 Jltud t bo n 'lnrtner in the Buropear 1•1un nnd 1 r i could not be equipped 1'1nenoi ll y to carry ouo s ch o portnorship it relations ith the U woU d become sonewllet eilll lar to reli tionsbiJ betwaen 'CllB ' and Yu oslovic Lr c ayton eou d iot see b0 tJte r K could ti ld 1 taelr ln a iueos cv _position e t srtc i how tl e u _ roblea •r s a if ferec t f' roa othor urop cC mtl ie-s r Cle rton refer red tc tile pnr c-r J livel'ec st 1fl5hineto i race Ni the t'i noncinl U t tl zin fOS i- ion e ad understoOCl e i fricultie A4 for rt ssia's stellitee ln asterr urope be cloI1btod 1·1th r Eevi11 aeth Jr the i • S S P could llolii or ii _orove its ositicn there because those countries woul d b I oom pelled 1·c1· o lOrt S tir ta to tradr acoively vi1th thereat Ml' Clay-ton l eite1·ated t hat he wt S unable t o vis 1 talizo the A u dn1n1 r t i on g oine o ConerosM rega1•ding new pro1 ost d s t or e ny one H i ntry and h t • l t that a l ' 1ropo ln plan must be worked cut In thie l r llavi l 's ontinu ed leadersh11 wo uld ·oe 'leloomoo r Levin Srik ' 1scuasion 1ooicetod t lat ll9V1 I ie iost w xious J an Uoua tor ao c inter in rt t •1c1t r J _ C L w • ·rM • roi ·r Ltrb1ra the 1 to atop a bae 1- b t o s10veo by eorle at hooe r 10 were 1ncted t r tL · 1 r11 ish tiru c1al vaa1t1on 3e cons dere l the J • • - rouuction t r d recc- •r r l'eccrd a nce th• l'i'Or c e a e ooc onu -r c ey an 19ni1011 a tlldt Ctc ll ct the r nclal d rticul -iee ll c due to - h t S r·1·ico rise - l 11 vin aald t • • cir le cu st be broii cn C ' t sono t or1 ry u-ron uen ra min£ to 1947 and •48 l e Orl ed o' lt Give o 5 w llio i tons of ra IJ t1nu I Will brou tile ro luc tion prcblom in G-err inny• 1r DnltOll 1 lt rjact¢ l fli t h r vtG 1'$1100 to ll1· Clayt on •• •111a0t ioa tho t one cLl i'fe rRnoo bGtv1eon t 1e 1 en I othor -uroi ean countries woo that U1d J l lelp ing In e r y tt 3ev n rever 1oS to food sa l a the U s R iea flush wi t cercolr bnd t e we a tr ins t o r et ra111 tro r tllea 01 u 1 ea 1n t alllJlce On the genehll nropoe o ar Le l' ed 1r w1d d llin 111tb teed coal stool etc 1n _9a 'a llel 001 r to sh° r•'auire ic11ta or ir ulvi1to 1 countrle• llUt t u needec aoDe 1saurance coutinui y of suppl • 1n 1 9 7-4£-- perl'laps 1'11 9- -which t c cslled • o ooepoc·o e years• ot lllr t 11 N'o n Crip s 1nterJcot ad t t at 1J1t ernlll ae nauro a op on Lo the t a coulc no aak e DO re 1 ui n s x ee a a a1rrorencc in t e e1 w uatioe ct' crl 1Ua -reeo•aroes l t c lso exm-essed tt o inion t lf t •• e s 11 ditterer c bot teru t e • • ll ot · er i u-ope u cow trios b ioauao or c tl ttciR t th non- J rOiJMt1 cour tr • Uovin eeio t tlat f e oons l ue r d Jost U Otha1· • i trODtHlJl country thio OLlld r1 t J n 11 th l UJSian Otl'utecy nf 1 el I the t tho IJ 1 0ulCJ 0 1100UJtt C I' U 8lllmJl Ulld • Ould Wi1 hO 'Q' ' t ror t uropo t he '1 ' 0 1 0 bo h elp- l e90 und ou t or dol er a nd r a r 1r 11Jy anethor t lt-Opean oou ntry t he sc1cnst in coaMt 11ul 01 tho Cont1r ont 0011 4 deol 1 l lb uritain in duo eourae r eal in o ' to t 10 fl J i niste1 cent ionod t 1ot U ' ti-in b to l t otrol1c n su lie o to w1c o avclc atorvot1on Mu ca· l r-opua er ucJ 1 ri t _ 1n held pol1t1ctl l S8J'Otla1b l1ty a r u einiler cc 1 Rt L rc tio ut'I •p rll6d 1r rerti or • rrica I r Dou l ' e nooo t-etr re r ruf to • 1_ trea racw1 vod t c A tr e rettSUr Ju a s cG - ett_4 t t1J't' 'W-r O- nt ti1 t1 oen in · le uaJtt oi 1 oc it 10 o -' • a ris z u cl i t t no - J ·st ai1 outru ol 947 Ua wcntic leG tt-11 rt or · i e M car t clru111 •• 10r tae i urpoee ol rcpleni•hiu a-to-cK1 h1oh 1 ud betJ u rur t O' C in the '1rett s11urt or t econcllliC revtval d'nci l so tl 1 t ortti ll pur citnoo ot t 1 h Lps v n c u u on-1·$curri1ti 1 em 11 l mo non tary t bo1 f ht l' r oltolt sa'IIJ he riot ltor tul o r 1mp1• WeJ11011t He ugraed t llut ropl onisrunant 01· 1 t oo1 s 11n ship il lJ 'Obese td i it not recur bllt rs_ lAni l11 ont culu cor ·y ever a twol•e-r ionth eriOd Contre it - a we re the coat o-r cor er ibil1Ly see below bcu J oh the srl C11b _ 4 ereueo si • ellllinctcn t te dollar coac or whica lie could no't o st ioate • or ats c ri l 1 o t tior ln i s ort e •01 al Go «lontlooed ent 1oned ' r Bevl n in erjeetecl tlle t oonvert1o111ty ✓ OOQ non 1 crim in•t1on obligations upon the U X had i n bi £ O1 ini on been dated t llree years too a ocn Sir Stafford Cripps 'llOnt ioned tb2 t tlloir expor t estir JAtoe ru ght prove h1gt and roolOl t closing o markets raises the question tbBt e ven hougn the Bri t i sh could llll1ke the soo s they misht not be able to sell them ln response to Mr Cla ton •s ques ti on ha sai d ho tt ouent rgentine marketing diffi oulti ea repr esented hit-ormss meeaure s by ar endo ot the t 5entin e Cov9 rnrco nt J lr Cle on then eoked r ointedl ' w hy r D lton ba d not Ooll e earlier with the se troubles notin1s tho t OoOEress would e djourn July 26 and exceptional casoe for rol1ef troll goverMtonteJ co llll l toents might be diff icult to handle at th lo session ce would not propheey inability t o handle caoee L shia conz ross but wondered why tile B r1tish autl orit i es ha d not tako n up the problem wl1eu it N 1·8t arose Tlte British roaponac was tlutt Oanado and fa rsentina demands tor dollars caused muct or the trouble and this bad arisen rapi Uy 8Jld so ewbat surrept1t 1ouely fr De l ton in r eferrini to oonv e rt11l1li ty o C· S ter- litl6 code i t clear he wen not asking tor or s-uggostine any cbanse 1 i t his cOC li tae it Ullder tho 1'inanciol sreem e nt l· oreo er I he pointed cut that regardless ot the terms of the l'in noi al l J reement o larg e art of tho difficul ties n o1 'acing tllf Sritiah wo uld btJ C arisen anyway • ID- Clayton Rotet· ri ng to Ur Bovin • s noad of C ooa ur Clo rton aa 1a thst f ood up till now wes a question Of produoticn and not n ooey notins ch4t he lS million ton exporL ot U $ oarenls was a vast effort ano reached'about the maxi rnun' I which t1•onepol' t nnd transit faci li ties would 1llov1 Ko 2 5r ee l t he 1 $ was wol l fed Wld possibly wa st et l l of f ood but t ll1s d i d not indico to unw1ll1 neness to shore wit b o bors since the t r o r s1t r roolelll was t ho bot t leneck · e c id not hi Ve t1e boxcus terminal s port aoilitie e tc and could not ¢reato Lh ovor - n i s ht Pe i hap s ono oillion mor t one of coro 1ls could bo go ten out but tl'lere wos a lir lit - r Pevlu observod t iat i n ccntrast to tJIH t cperut 1ens tho uuthor1t1os could concentrate n o6s ct to-od be ter et present O Hd could a voiG - ist c n iro_pe 1r 5ev1 n • ok cf G1Jl RH i1 a f• ai rs nontion1ne r ecent cohvorsations t i h Oet al obertson ttr 6 di tf1cu1tiea 1 t o rlcins_ ut plan beeauac of t udc u sr r 11 011 e ior s In our _plttnfJ · ill 'e b hel i 1 tp b t pprO r 1utions 11 11 Clay ond F obel' $o n ae t l forever tied by 8 £'1 ill O riu tiou f U Stic 18 11 tr luytOll snid tnnt n ' oour se eJpro r riatio is ere a li itin i'2ctor in o tom of covsrntce lt fJ'Jt e would look i11tc t he dL 1'1 aul y 5 L t• Cl yl i orj rei -i e 1·a t ed thut t Le 1 1 1 f 11t11•tner i ll tho J rl t 31 lil l 1»·0 r 1•o t he r Lll O a pa l't 01 l'Oll• · · it tlpe cial nsoistth1Ce to l Aa 1 j _par1 ncr • ld 'l'ic lotv t o rinci1•l6 tho no piec et l epproacll to the ' 1ro Joo 1 _r robl cit • oulc be 1 tnc ertic - e eic that i a tf' e J i even u 11ou- 11i ' 0 8uefll Ap l ro c r • oult Oc hord · 'to ell to ti1e r a public o na COJi i P•ess bl C t'r t 11Llcly nnu no ossibili t y of 1 1 e rim l' t r C 'Jent 'or tho t -1 es 1 -Brt or tile eau a1 prose • t th1 r ini I t-hOU£1 t 3ix t cft ord Cripps rtla e'- t -10 poin1 e in tl e r1us nc iul i greecnent nar iel c or v er t1 ' 1li ty and r cmd1scrim1 at1cn in i m orta which ' 1 ht be leo ed in o ea somo relief' to t ie Erl tial io lcr rolllon 1i• Gu lt r l s not J Uite sure if tt is t ae spoeiria lly re 1sed by Cripps • t thl o point ' ' r Cll· yton r a 1ae i t h r it'$ t of a i$ or1tic1sm a of l J o nn rr1 o v ttlc 1 r r 1 1J1c J1n•e cf tt- e air cool 9 r hlc s - e l o tLM reisea t te ue etien o f u 5C ion ree a -dlng no ea 1 res in Japan bot b et wblc h hett heon covered s r- a e t lf · o su ari z I r Cloi•1 on oecribed the tdea p reeent e by ec rotory 1 -6 l'f'Jhcll as invo vir e Jt re8lly big proCle T 1e J AOministrat on wun ed intcrtr ation f rom 11 of the inter es ocd uro l elln c ountrios as to V why r ecover i n · uro1 a had been so slow wha t EUJ ope could do to hel p it el i 8 J d how lone it r i1i J1t take with a minull D or aes i stonce trD 'I the United STatoa for Urope to e et beck on i ts cmn teet Fellowing Virms on roasonl- l tor elow recov ery l nd reo edinl coeaeul'oo 1•1ould na d 1nro rJllation regnrdi lg rood roqu i ements tu el regu iremcnt s 2nd other er 1ereency essentials Prima l J nistar r e1'11r1•1ng o l Jl• Clayton• s r n1ark on social1 tion s aid th lt new eocial a t structuroa were created a s olterne t1v s to structures craa tod by the Mazie which eyndicaten could not be all eu to r eemerge nnd i ' t hey d i d would cause fears tn nei ghborif€ ooun·trioa 1 ll' Bevin thought t he t1·oublo l u Germany ai emmed from unaottleo le-vel - ct- 1ll ustry uesti ons nmi mentioned co trovel SY or whothet Gere an lt eel _pr o duci ion v e s to be ll rtlllion cons or SOllO other ti lll e He elso daprecatod Ci smantl i ng ot err 18 industry and asked that Cl ay s ettl e hia qu ost1on so h• Germane IV1U know where tiiey s to nd expressing will1llg 10 e to fight out with the l'renob a o OS-11' C egreen ents wb1oh were not pal etabler Besides level -or induatry problems he thousht the Potsdaa i p roe ent forced o hi m in h1s first day of o ffiee l ft r uo h to be den1rod Syn6ioates iu CertWny- werB o war J Ot ential and c ould l'lOt be p-at back In general- 11 - Bevin t hou6b o s and 11 A plans for Corman ere not tu apart i r Clez-ton said he woul d look into tbc level-of- in uetry problem in Gerroo ny on tl o TOJ' Sl CRli T 6 n the point o eroan ll inhg 01 the Ad assed r •XJ ro•••4 bis erso11tl rt that part or tn proble i lllo1·•d on the iuest ion or clot 1 l- g a D gOl a o the 1n4u tr1al opeHtion e - th enougl eutborlt y to cet product1011 golna i ie also bellaTed tl et tile ack ct a ourraoo7 1n GaN any which ccaullded public cootldence ••• • root d lfficu1t de reaslni lnoentlYae Ci vertlng re•ouroea Cl esti 1£ aleck 1118l'ket1 d clticanel y Aero wao eeneral aere ent tbct tho lack or con fidanoa lo ou rrancy was prob_ e r wl ioh ClP lled over ell ' uropo Mr Bevin agreed on tho curr noy quest ion llld 11eot1oned his thougllt btit tho currency -ror tho 11on-Hue ian zones could bo 11 nkod wi t h t be l•'renc h t t•c no tllO Belsien -crane nd tl o 1 1 tCh e u Llde1· He r rer ro4 to conl'usion o r author1t Jo ooul operations na 8 114 ho was trying to get lt l a a roie htanod out ' he proposal o r Clay tor a single tru too he thought would not work