Britain and the making of the Post-War World
of trade we expect to emerge with at the end of five years or whenever it is that the transitional period terminates. An outline of our answer is given in my next following telegram. It will be seen from this that an eventual balance requires that our external income from exports and net invisibles shall be of the order of nearly seven billion dollars or say six and a half billion at the very lowest. We say that we are able to assume a debt liability of 100 millions which is 1½ per cent of this but see no reasonable hope of being able to meet 150 millions which would require a further expansion of our overseas income or curtailment of our overseas expenditure by less than another 1 per cent. This obviously lays us open to the accusation of possessing extensive and peculiar information about the future. 11. Our best answer is, of course, that what really scares us is the possibility of owing to the US an amount of money which is enormous in relation to our prospective exports to them in conditions where, for all we know now, multilateral clearings may have broken down, Very well, says Clayton, draft a clause to protect yourselves against this possibility. We admit that commerce in the post-war world either goes all right from our point of view or it does not. In the first case 150 millions may be practicable and in the second case 100 millions may be scarcely possible. Nevertheless failing the solution of a free grant one has to draw the line somewhere and they must not try to involve us in the fallacy of sorites. Very well says Clayton, draft a clause under which your liability will be related to your capacity. We do not want to embarrass you, he adds, but we want to be able to say that we have reached an elastic arrangement which duly protects the interests of both sides. 12. You will be aware how reluctant I have been to enter on the slippery path of escape clauses. But we all think that the time has come when we cannot reasonably excuse ourselves from making some response to Clayton’s generous and not unreasonable suggestions. In refusing to do so we are in truth still grasping at the ineluctable poetry and refusing to come to earth in well-reasoned prose. Yet from his own point of view and from ours too when once we have accepted the inevitability of prose, Clayton is generous and is not unreasonable. If you had sat as many hours as the 141