A PROBLEM TO BE FACED IN DOLLAR EXHAUSTION

Press, Volume LXXXV, Issue 25766, 30 March 1949, Page 4

A PROBLEM TO BE FACED IN DOLLAR EXHAUSTION

ROOSEVELT ENTERS

THIRD TERM

[By the Rt. Hon. WINSTON SPENCER CHURCHILL, M.P.] XI.VT

Above the roar and clash of arms there now loomed upon us a world-fate-ful event of a different order. The Presidential Election took place on November 6, 1940. In spite of . the tenacity and vigour with which these fourvearly contests are conducted, and tne bitter differences on domestic issues which at this time divided the two main parties, the Supreme Cause was respected by the responsible leaders, Republicans and Democrats alike. At Cleveland on November 2, Mr Roosevelt said: “Our policy is to give all possible material aid to the nations which still resist aggression across the Atlantic and Pacific Oceans.” His opponent, Mr Wendell Willkie, declared next day at Madison Square Garden: All of us —Republicans, Democrate and Independents—believe in giving aid to the heroic British people. We must make available to them the products of our industry.” “INDESCRIBABLE RELIEF” This larger patriotism guarded both the safety of the American Union, and our life. Still, it was with profound anxiety that I awaited the result. No newcomer into power could possess or soon acquire the knowledge and experience of Franklin Roosevelt. None could equal his commanding gifts. My own relations with him had been most carefully fostered by me, and seemed already to have reached a degree or confidence and friendship which was a vital factor in all my thought. To close the slowly-built-up comradeship, to destroy the continuity of all, our discussions, to begin again with a new mind and personality, seemed to me a repellent prospect. Since Dunkirk, I had not been conscious of the same sense of'strain. It was with indescribable relief that I received the news that President Roosevelt had been reelected. FORMER NAVAL PERSON TO PRESIDENT ROOSEVELT I did not think it right for me as a foreigner to express any opinion upon American politics while the election was on, but now I feel you will not mina my saving that I prayed for your success arid that I am truly thankful for it. This does not mean that I seek or wish for anything more than the full, fair, and free play of your mind upon the world issues now at stake in which our two nations have to discharge their respective duties. We are entering upon a sombre phase of what must evidently be a protracted and broadening war, and I look forward to being able to interchange my thoughts with you in all tliat confidence and goodwill which has grown up between us since I went to the Admiralty at the outbreak. Things are afoot which will be remembered as long as the English language is spoken in any quarter of the globe, and in expressing the comfort I feel that the people of the United States have once again cast these great burdens upon you I must avow my sure faith that the lights by which we steer will bring us all safely to anchor.

Curiously enough, I never received any answer to this telegram. It may well have been engulfed in the vast mass of congratulatory messages which were swept aside by urgent work.

LOTHIAN’S ERRAND Up till this time we had placed our orders for munitions in the United States separately from, though in consultation with, the American Army, Navy, and Air Services. The everincreasing volume of our several needs had led to overlapping at numerous points, with possibilities of friction arising at lower levels in spite of general goodwill. Three days after his reelection the President publicly announced a “rule of thumb” for the division of American arms output. As weapons came off the production line they were to be divided roughly 50-50 between United States forces and the British and Canadian forces. But how was all this to be paid for? In mid-November, Lord Lothian flew home from Washington and spent two days with me at Ditchley. I nad been advised not to make a habit of staying at Chequers every week-end, especially when the moon was full, in case the enemy should pay me special attention. Mr Ronald Tree and his wife made me and my staff very welcome many times at their large and charming house near Oxford. Ditchley is only four or five miles away from Blenheim. In these agreeable surroundings I received the Ambassador.

He was fresh from intimate contact with the President, with whom he had established a warm personal friend, ship. His mind was now set upon the Dollar Problem; this was grim indeed. DOLLAR RESOURCES DWINDLING Britain entered the war with about 4500 millions in dollars, or in gold and in United States investments that could be turned into dollars. The only way in which these resources could be increased was by new gold-production in the British Empire, mainly of course in South Africa, and by vigorous efforts to export goods, principally luxury goods, such as whisky fine woollens, and pottery to the United States. By these means an additional 2000 million dollars were procured during the first 16 months of the war When the war exploded into hideous reality in May, 1940, we were conscious that a new era had dawned in Anglo-American relations. From the time I formed the new Government and Sir Kingsley Wood became Chancellor of the Exchequer we followed a simpler plan, namely, to order everything we possibly could, and leave future financial, problems on the lap of ORIGIN OF LEASE-LEND. The full text of Mr Churchill's letter to President Roosevelt, referred to here, wiH be printed in a specially long instalment to-morrow.

the Eternal Gods. Fighting for life and presently alone under ceaseless bombardment, with invasion glaring upon us, it would have been false economy and misdirected prudence to worry too much about what would happen when our dollars ran out. We were conscious of the tremendoui changes taking place in American opinion, and of the growing belief not only in Washington but throughout the Union, that their fate was bound up with ours. Moreover, at this time an intense wave of sympathy and admiration for Britain surged across the American nation. Very friendly signals were made to us from Washington direct, and also through Canada, encouraging our boldness and indicating that somehow or other a way would be found. In Mr Morgenthau, Secretary of the Treasury, the cause of the Allies had a tireless champion. APPROACH TO ROOSEVELT Up till November, 1940, we had paid for everything we had received. We had already sold 335 million dollars’ worth of American shares requisitioned for sterling from private owners in Britain. We had paid out over 4500 million dollars in cash. We had only 2000 million left, the greater part in investments, many of which were not readily marketable. It was plain that we could not go on any longer in this way. Lothian was confident that the President and his advisers were earnestly seeking the best way to help us. The Ambassador urged me to write a full statement of our position to the President. Accordingly that Sunday at Ditchley I drew up, in consultation with him, a personal letter. On November 16, I telegraphed to Roosevelt: “I am writing you a very long letter on the outlook for 1941 which Lord Lothian will give you in a few days.” As the document had to be checked and rechecked by the Chiefs of Staff and the Treasury, and approved by the War Cabinet, it was not completed before Lothian’s return to Washington. In its final form the letter was dated December 8, and was immediately sent to the President. As it gives a view of the whole situation agreed to by all concerned in London, and as it played a recognisable part in our fortunes, it deserves study. (To continued.) Copyright 1949 in U.S.A, by The Nev York Times Company and Time, Inc. (publisher of Time and Life); in the British Empire by the Daily Telegraph Ltd.; elsewhere by International Cooperation Press Service, Inc. World rights reserved. Reproduction in full or in part in any language strictly prohibited.