Signing the Anglo-American Financial Agreement: 6 December 1945 Posted on: 7 December 2020
Signing the Anglo-American Financial Agreement. Front row from the left: John Maynard Keynes, Lord Halifax, James Byrnes, Fred Vinson. Back row: RH Brand, Sir Henry Self, Sir Edward Bridges, Professor Robbins, Sir Percivale Liesching, Dean Acheson, William L Clayton, Thomas B McCabe (The National Archives)
The American Congress and the American people have never accepted any literal principle of equal sacrifice, financial or otherwise, between all the allied participants. Indeed, have we ourselves? Lord Keynes, defending the Agreement in the House of Lords, 18 December 1945
Seventy five years ago, an agreement was signed in Washington for a US loan to the UK government of $3.75 billion repayable over 50 years.1 The UK’s final payments on this, and a loan from Canada agreed in March 1946, would not be made until December 2006. Though the terms of the US loan were not ungenerous, the British government found them hard to swallow. Nevertheless, in December 1945 most people in the government thought the agreement an essential lifeline. Some ministers and officials opposed it, with its attached conditions requiring radical changes to UK commercial arrangements. Others favoured refusal, confident the US would improve its offer if the UK held out long enough. But for Foreign Secretary Ernest Bevin, who successfully urged the Cabinet to agree to the deal, the main arguments were geopolitical as much as financial. In his view, the agreement was essential to emphasise Britain’s key position as a bridge between East and West, to revive trade with Europe, and above all to keep on close terms with the US. The Anglo-American Financial Agreement must be seen in that wider context. The end of the ‘Big Three’ The end of the Second World War in August 1945 brought not just peace but profound global shock. The victorious Grand Alliance dissolved, leaving two Superpowers—USA and USSR—with a bankrupt and exhausted UK in third place. The ideological gulf between Soviet communism and American capitalist democracy, sublimated during
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