The months May–December 1965 saw several developments in the Wilson– Johnson relationship. The White House feared, in the light of London’s ongoing Defence Review, that economic troubles might compel the Wilson government to reduce its military commitments East of Suez, leaving the United States as the only world policeman. This possible scenario worried President Johnson, with the result that his advisers decided that it would be fitting to try to impose some sort of ‘deal’ on London – the United States would support sterling only in return for a British commitment to avoid far-reaching defence cuts. There is little direct evidence concerning Johnson’s own position on this arrangement, but it is clear nonetheless that he wanted Wilson to understand that US support for the pound would be less likely if the British began to reduce their global responsibilities. However, Johnson overrode his National Security Adviser, McGeorge Bundy, who maintained that the United States should support sterling only if the British committed troops to Vietnam, as well as maintaining their existing defence commitments: ‘a battalion would be worth a billion’.¹ The President, however, was sensitive to the impression that might be conveyed if the United States enlisted ‘mercenaries’. Wilson always denied striking a deal with Johnson, but in truth he did accept the link between Britain’s defence posture and the ease of securing US support for sterling. On 17 June, Wilson initiated his ‘Commonwealth Peace Mission’ to try to bring peace to Vietnam, essentially on American terms. He believed that he had Johnson’s firm support, but the President was in fact hostile towards the scheme, which he thought might turn out to be an embarrassment to Washington. The project failed in part because of the perception among the communist powers that Wilson was merely Johnson’s ‘errand boy’. On 16–17 December, Wilson visited Washington for the third time since assuming power. The summit went well, not least because he underlined his commitment that the UK should remain in force East of Suez and affirmed his support for US policy in Vietnam.

‘Imperial delusions’? Wilson and Britain’s global role

Upon taking office in October 1964, the Labour government began a Defence Review, to try to find ways to save money in this regard. It sought to spend no more than £2 billion on defence by 1969/70 (at 1964/65 defence estimate prices). The figure was roughly the cost of defence for 1964/65, and meant a reduction of £400 million from earlier projections for 1969/70.² NATO and the Far East were prime candidates for cuts. Commitments in these regions cost ‘£180 million and £270 million respectively’, as the US Embassy noted on 11 November 1965.³ A CIA report on 7 June noted that the most expensive of these, the bases in the Far East, were ‘supportable under ordinary circumstances’ by an economy with a GNP the size of Britain’s, which stood at ‘more than $800 billion’. However, the balance of payments deficit, ‘a record breaking $200 billion’ in 1964, generated ‘apprehensions about sterling devaluation – which might in turn generate a run against the dollar’.⁴ In 1964/65 the foreign exchange costs of defence spending accounted for around 40 per cent of Britain’s balance of payments deficit on current and long-term capital accounts.⁵ The British continued to face the question of ‘whether they can save the pound with a combination of domestic toughness and substantial foreign help or whether in sheer prudence they must give themselves more leeway by drastically reducing their defence spending abroad’.⁶

Wilson wanted to reduce the cost of Britain’s defence commitments, but he still supported the idea that Britain should continue to play a global role. He certainly wanted the Americans to appreciate his commitment to East of Suez. On 14 May 1965, he told Dean Rusk, US Secretary of State, and David Bruce, US Ambassador, that he would rather ‘take half of the British troops out of Germany than withdraw them from the Far East’.⁷ Wilson believed that Europe was unlikely to be the scene of another war,⁸ and he knew that, given the situation in Vietnam, the Johnson administration preferred a substantial British presence in Asia to one in West Germany. As Rusk commented on 22 October, a ‘marginal input by the United Kingdom in NATO is less important than an input in Southeast Asia’.⁹ The Foreign Office backed up Wilson’s regard for East of Suez and close Anglo-American ties. On 12 August, Paul Gore-Booth, the Permanent Under Secretary, noted American concern about Britain abrogating its role in the world, which might precipitate ‘a gradual return to isolationism within the United States’. Washington believed that it was ‘an essential American interest that they should continue, in effect, to play a world-wide peace-keeping role’, but without the help of major allies ‘there will be a revulsion of American opinion against it, with damaging longer term consequences for American interests’. Because Britain believed that ‘the damage to our own interests in such circumstances might be even greater, we think it desirable to seek, within the limits of our ability, to maintain our global role, in association with the Americans’. Moreover, said Gore-Booth, ‘even if the Americans are prepared in the last resort to go it alone, a British withdrawal would inevitably change the whole nature of our relationship with the United States and drastically reduce our influence on them’. Britain’s ‘ability to go on acting as a world power, even if of secondary dimensions and pretensions’ was ‘an essential element in our association with America’.¹⁰ The Conservative opposition supported the preservation of the world role, too. The US Embassy noted that after Wilson’s defence in the House of Commons on 21 December 1965 of the global role ‘the Opposition did not directly challenge the Government’s view of Britain’s defence role in the future’.¹¹

However, Wilson’s views did not command universal assent. The US Embassy noted on 5 November that there was growing controversy in Britain about ‘the level of national defence commitments east of Suez and the wisdom of continuing to maintain them in view of allegedly more pressing priorities’. Some of the criticisms were ‘technical and deal with the kind and degree of relevant military investment and support’. Critics in the Labour Party attacked ‘other aspects of the British engagement east of Suez’, arguing that the country ‘can no longer sustain a role based on “imperial delusions” and call for a drastic cutback of east of Suez commitments and order to provide … the means to pursue a stable balance of payments policy and much needed social reforms at home’. The Embassy noted that many ‘avowed leftists … oppose the scale and extent of British commitments on grounds of doctrine and conscience’, while others believed that Britain should ‘rearrange its defence priorities everywhere if it is to carry out domestic social and economic aims of more immediate concern to the British people’. Others saw ‘in reduced international tensions between the West and the Soviet Union in Europe additional reasons why Britain can afford to reduce its total military commitments’.¹² Some figures in Wilson’s Cabinet also criticised his attitudes. Noting the Prime Minister’s recent affirmation of support for the British role East of Suez to Dean Rusk, George Brown protested on 19 May that he disagreed ‘with this strategy both on principle and also in relation to the claims it would be bound to make on our resources and its consequences for our balance of payments’.¹³ Brown felt that British money was better spent at home, and he complained later that Wilson was committed to East of Suez in part because of an excessive dedication to the White House: he ‘was now bound personally and irrevocably to President Johnson and had ceased to be a free agent’.¹⁴ On 17 November, Philip Kaiser at the US Embassy reported the deliberations in London about the Defence Review, among ‘key Cabinet officials, senior civil servants [and] military chiefs’. Kaiser had learned from ‘several participants’ that Denis Healey, Minister of Defence, felt that ‘numbers of British troops … should be substantially reduced’ to help save money. ‘East of Suezers’ had a difficult time, said Kaiser; Wilson, George Wigg [Paymaster General] and the Foreign Office were the ‘only strong defenders of East of Suez role’. Healey had argued that there was ‘no real national role for UK East of Suez and that British [were] liable to be nothing more than hangers-on in [the] area’. A number of ‘high officials’ in the Foreign Office and the Ministry of Defence had later ‘expressed concern’ to the Embassy about the threat to the position East of Suez. They ‘genuinely fear [the] erosion [of the] UK’s East of Suez position and have suggested that the subject of [the] British defence review would be sufficient justification for [a] meeting between President Johnson and Prime Minister Wilson sometime in December’.¹⁵ Some of those who questioned the validity of Britain’s global role cited the ‘precedent’ of Britain’s abandonment of Greece in 1947. This had led to Washington’s promulgation of the ‘Truman Doctrine’, by which the United States expanded its global peacekeeping presence and helped to fund the defence effort of allied states.¹⁶

An Anglo-American ‘deal’?

Time and again the White House stressed to the British the importance of the East of Suez role. For example, on 10 June 1965 Patrick Dean, the British Ambassador to Washington, told Gore-Booth of the concern of Robert McNamara, US Secretary of Defence, that ‘the United Kingdom had to regard herself as having inescapable commitments in the Indian Ocean for at least the next ten years’. The United States had the ‘military resources to take this part of the world on, but not the political strength either at home or abroad to do so alone and without allies. If, therefore, the British withdrew there would be a vacuum which somebody else would no doubt fill’. The ‘last thing’ that American policymakers wanted was ‘to find themselves involved with Indonesia at the same time as they are confronting the Chinese in Vietnam, and we are most important to them as a political and military buffer’.¹⁷ On 20 May, Francis Bator of the National Security Council sent a memorandum to President Johnson warning that economic troubles might prompt the British to initiate ‘sharp changes’ in their ‘foreign political and military commitments’. Washington ‘should expect growing British pressure on us to support troop reductions in Europe, or take over some of their East of Suez commitments, or to help ease some of the pressure on their arms and aviation industries’. Although Wilson had assured the White House that he would not devalue the pound, his measures of ‘tight money, import restrictions, controls on capital movements and “persuasion” to clamp down price-wage-inflation’ could well prove inadequate. The British faced the ‘big question’, said Bator, of ‘whether they will be able to protect the pound through a combination of tough domestic measures plus external (notably US) help’, or whether, ‘in addition, major cuts in defence spending abroad will be necessary’. Bator argued that Wilson was ‘too conscious of our support for the pound and of his reciprocal support for our position on Vietnam’ to try to ‘pressure us very hard or to present us with unpleasant surprises’. However, there were growing pressures ‘within the government for something to give’ with regard to Britain’s military presence in Europe or East of Suez.¹⁸ Bator’s concerns that Britain might be tempted to shed some of its global commitments registered with President Johnson. On 16 June, he told the Secretary of the Treasury, Henry Fowler, that as well as investigating the general question of international liquidity, he should examine Britain’s economic problems. British weakness was ‘of major foreign policy concern’ to the United States, said Johnson. He asked Fowler to consider how the United States could ‘arrange for a relief of pressure on sterling, so as to give the United Kingdom the four or five year breathing space it needs to get its economy into shape’. Otherwise, Washington faced the ‘danger of sterling devaluation or exchange controls or British military disengagement East of Suez or on the Rhine’.¹⁹

The President’s worries about British economic troubles gave some of his subordinates the idea that there was scope to impose some kind of politico-economic deal on Wilson, to ensure that any British defence measures did not threaten US interests. On 25 June, Bator asked Bundy, in the approach to a visit from James Callaghan, the British Chancellor of the Exchequer, ‘whether we are prepared … to engage in a purposeful, joint exploration of a possible deal – which will involve defence, as well as money and commercial policy’. This ‘deal’ would seek to ‘protect the pound, avoid exchange or trade controls, and maintain the British presence East of Suez and on the Rhine’. Bator argued that Callaghan’s visit should be used to give Wilson ‘a sense that we are engaged on his economic problem and that there is some prospect for a deal which will keep the speculators at bay, and, over the longer term, give him a chance to pull off his economic programme to get the UK economy into competitive shape’. This would help ensure that Wilson thought of the United States should economics force him to consider deep cuts in Britain’s foreign commitments.²⁰ On 28 June, Bundy tried to prime the President on the question of reaching an Anglo-American understanding. He told him that after discussing ‘the British problem’ it was ‘agreed that we should not make any deals with the British on the pound alone’. Any arrangement ‘should be put together in terms of our overall interests – political and economic, as well as monetary’. None ‘of us expects his kind of deal can be made with Callaghan. It will have to be a bargain at a higher and broader level’, between the President and Wilson.²¹ However, at this point Johnson made no concessions to this approach, which might easily have been interpreted as an attempt to coerce a loyal and valuable ally. In any case, Callaghan’s visit to Washington included an hour with Johnson, who proved ‘sympathetic’ towards British economic difficulties, not least because of an ‘awareness of their possible impact on the dollar’.²²

The President’s advisers continued to moot the question of a deal. On 29 July, Bator told Bundy that Fowler, Robert McNamara (Secretary of Defence) and George Ball (Undersecretary of State), had agreed on roughly the same position on a quid pro quo with Britain:

1. East of Suez and BAOR are sacrosanct (by and large);
2. $2.80 is sacrosanct;
3. no pre-crisis preventive package is available;
4. an emergency rescue package, in the face of a crisis, must be multilateral – we will not foot the bill without substantial help from others …
5. no multilateral rescue package is obtainable unless the UK takes further steps to compress internal demand, etc;
6. UK troops in Vietnam, while not strictly a necessary condition for us to be forthcoming on sterling, would greatly improve the odds.²³

Bator added that ‘even if we leave out Vietnam … they must under no circumstances devalue, or impose comprehensive trade and exchange controls, or cut back on East of Suez or on the Rhine, yet we will not take part in a rescue operation unless they are prepared sharply to deflate at home’. Johnson opposed the devaluation of sterling and any British cutback on global commitments, but despite the promptings of his subordinates he had yet to show his cards on the matter of a politico-economic bargain with London. It was thus necessary, Bator told Bundy, to prepare ‘the President’s mind’ and to get a clear ‘reading on his priorities’.²⁴ Assuming that Wilson did not ‘come through on Vietnam’, but that London was ‘prepared to promise to stay on the Rhine and East of Suez’, would Johnson:

1. … prefer to bail out the British with the US putting in the bulk of the money even if they willnot promise the internal measures that are needed to avoid another crisis a few months later? In other words, are we prepared simply to underwrite $2.80 indefinitely?
2. If not, it is useless to say to ourselves that devaluation is unthinkable. It had better become thinkable … in the minds of the principals and the President.²⁵

Bator believed that Johnson would rather see the devaluation of sterling than permit the United States to ‘underwrite $2.80 indefinitely’ without deflationary measures in Britain. If, however, Wilson ‘makes an absolute objective of $2.80 – then of course we are in the saddle and can impose whatever terms we wish when he comes for help on a Friday evening’.²⁶

Johnson’s key advisers wanted to use US support for the pound as a lever to impose terms on the British, but the ‘hawkish’ Bundy wanted Britain to do more than to keep its existing commitments: he was especially keen that the British should commit troops to Vietnam. This was despite the fact that economic difficulties made London ill-disposed ‘to conceive of adding anything’ to existing commitments, compounding ‘their difficulty in responding’ to Johnson’s own desire for a British flag in Vietnam.²⁷ Knowing Wilson’s desire to deal with Johnson face-to-face, Bundy told the President on 28 July that the Prime Minister might seek ‘a private understanding with you’. Any attempt to this end would be unacceptable, said Bundy, because ‘the British are constantly trying to make narrow bargains on money while they cut back on their wider political and military responsibilities’. It made ‘no sense for us to rescue the pound in a situation in which there is no British flag in Vietnam, and a threatened British thin-out in both east of Suez and in Germany … a British brigade in Vietnam would be worth a billion dollars at the moment of truth for sterling’.²⁸ On 29 July, Ball warned Bundy that any demand for British troops in Vietnam presented in the context of ‘balance of payments help’ from the US ‘would give the British the reaction that we are asking them to be Hessions [sic]’. In the face of Ball’s analogy that Washington would in effect be enlisting mercenaries to fight in Vietnam, at least on this occasion Bundy conceded that the United States ‘did not want to be buying troops’, which would look ‘bad from everybody’s point of view’. However, Wilson needed to know, Bundy asserted, that unless the British played by American rules Johnson might not ‘even do a short run rescue operation’ to protect sterling. Bundy repeated to Ball his fear that Wilson might ‘come to the President through the Treasury and make a money deal without our getting certain satisfaction on some political points’ concerning Britain’s stance in world affairs.²⁹ Bundy’s concern in this respect indicated that Johnson was less impressed by the crude notion of a ‘deal’ with Wilson than were some of the White House advisers.

Johnson, Wilson and the ‘deal’

The documentary record contains few of President Johnson’s direct comments about a bargain with Wilson. There is evidence, though, of his exasperation with Labour’s apparent unwillingness to uphold the toughest of measures to preserve the parity of sterling. He asked Eugene Black, president of the World Bank, on 5 August:

Later that evening Johnson told William Martin of the Federal Reserve that he had ‘never had any confidence’ in the British ability to handle their economic difficulties. He was tempted to say ‘we begged you, pled with you, tried to tell you and you haven’t followed our advice so we can’t help you’. The British were like ‘a reckless boy that goes off and gets drunk and writes cheques on his father’. The father honours ‘two or three or four’ of the cheques before ‘call[ing] him in and just tell[ing] him now we’ve got to work this out or you live off what you’re making … if you don’t, I can’t come to your rescue any more’. But the boy just ‘goes home’ and writes another cheque.³¹ There is evidence that Johnson finally accepted the view that US economic support, however reluctantly it was dispensed, could be used to shore up the British commitment to the global role. His thinking in this regard is reflected in the comments of his advisers. On 28 July, Bator noted Johnson’s belief that anything ‘which could be regarded as even a partial British withdrawal from overseas responsibilities is bound to lead to an agonising reappraisal’, so far as US support for sterling was concerned.³² On 8 September, Johnson indicated that he fully supported the views of George Ball.³³ Ball believed that Johnson should tell Wilson that ‘we are coming to your rescue on the condition that they [sic] are not going to pull back from their present commitments’.³⁴ Patrick Dean gathered from a conversation with Johnson on 12 August that the Americans were ‘prepared to go quite a long way to help us in our present difficulties, provided that they remain satisfied that we are ready to continue to help ourselves and do our share in the world’.³⁵

The President did not, however, want to go so far as to try to force Wilson to place British troops in Vietnam. Johnson was not always a man of great subtlety, but he realised that if, under these circumstances, Wilson agreed to send men to Vietnam then the controversy of the US stand there might be inflamed still further should the facts emerge of the recourse to ‘mercenaries’. Clive Ponting has indicated persuasively that in rejecting the ‘a battalion for a billion’ approach, Johnson understood that, given feelings in the Labour Party and among the British public, Wilson would not be able to commit British troops to Vietnam, and to press him to do so might strain his desire to sustain Britain’s global role and not to devalue sterling.³⁶ In March 1965, Wilson himself said that the situation in Vietnam created a ‘danger of widespread anti-Americanism and of America losing her moral position’. If Washington tried to use Britain’s ‘financial weakness … as a means of forcing us to accept unpalatable policies or developments … this will raise very wide questions indeed about Anglo-American relationships’.³⁷ Johnson vetoed Bundy’s efforts to try to force the British to commit troops to Vietnam. After a talk with the Cabinet Secretary, Burke Trend, on 2 August, Bundy told the President that ‘In accordance with your instructions I kept the two subjects of the pound sterling and Vietnam completely separate’.³⁸ Bundy’s account to Johnson on 10 September of Ball’s talk with Wilson also indicates the President’s reluctance to demand British troops in return for American money:

The question of the alleged deal attracted some attention in Britain. Wilson noted in 1970 that ‘there was a small minority on the extreme left’ who believed that Anglo-American bonds were ‘not so much a relationship as a cash nexus’. The ‘legend’ was that ‘short-term monetary accommodation’ was made available only in return for a secret understanding that Britain would support US policy in Vietnam’. But according to Wilson the truth was that ‘there was never any suggestion’ that Vietnam or British troop commitments abroad ‘should be taken into account when urgently needed economic cooperation was involved’.⁴⁰ Edward Short, Wilson’s Chief Whip, suggested that during the first Wilson government (1964–66) Britain’s ‘reliance on United States support for sterling forced us to refrain from any overt criticism’ of American involvement in Vietnam. Wilson is said to have framed this bargain with Washington even before the Labour government came to power.⁴¹

After studying the available sources at the Johnson Library as well as the memoirs and diaries of various British politicians, Ponting concluded that in 1965 ‘the Labour government reached a series of “understandings” with the United States’, which ‘fundamentally shaped both British domestic and strategic policy’ for the first three years or so of the Wilson government.⁴² The terms held that the Wilson government would preserve the parity of the pound, implement deflationary economic policies at home and maintain Britain’s defence commitments in the Far East in return for American support for the pound.⁴³ Ponting’s ideas were subsequently adopted by at least one more historian,⁴⁴ although some writers were more critical. C. J. Bartlett, for example, argued that ‘While dependence on American assistance in 1964–65 might seem to have left the British government dangerously exposed to American influence (or even dictation), in practice it is just as reasonable to argue that the Wilson government was able to turn American self-interest to its own advantage … In effect, Washington was subsidising the Wilson government to pursue policies which the latter wished to pursue in any case.’ American policymakers may also have ‘failed to distinguish between genuine British opposition to American demands and a tactical stance designed to wring aid from Washington’.⁴⁵ Chris Wrigley has put forward similar arguments.⁴⁶

The release of more primary source material in recent years has permitted more substantiated reflections on the Anglo-American ‘deal’. Saki Dockrill has argued that while there was ‘a tacit understanding on both sides of the Atlantic Ocean that defence was closely linked to the economy, British officials and ministers just managed to avoid entering into a formal linkage agreement with the United States’, not least because it would be impossible to do so while the Defence Review was in progress.⁴⁷ John Dumbrell comments that the ‘deal’ ‘never attained any formal status, remaining rather at the level of shared understandings within a well defined power relationship’.⁴⁸ Thomas Schwartz supports these conclusions in his comments that ‘the evidence indicates that the arrangement was more in the nature of a classic “gentleman’s agreement” than an explicit bargain’.⁴⁹

In the face of speculation about his commitment to Washington, Wilson denied – correctly – that there was ever any explicit bargain on Vietnam or any other issue. Wilson told Johnson on 2 August 1965, for example, that ‘I should be loath … to run the risk of spoiling any chance we may have of fulfilling the functions which we originally accepted as co-Chairmen of the Geneva Conference.’ This was Britain’s position, Wilson told the President, ‘when you first raised the matter with me last December and its advantages for both of us seem to me to be just as valid, if not more so today’.⁵⁰ Wilson informed Ball on 9 September that Britain ‘would not accept an additional demand for a United Kingdom contribution to Vietnam as a quid pro quo for US Government short-term support for sterling’.⁵¹ He also told Bruce that day that ‘the attitude of the United States had been made abundantly clear by the fact that at a time when President Johnson would dearly have liked to see United Kingdom participation in Vietnam this had never been raised during all the discussions leading up to the present support operation’.⁵² David Bruce also denied that there was ever any Anglo-American deal. He argued that while the Johnson administration was ‘anxious’ about the possibility of a British withdrawal from East of Suez or from West Germany, it never told Wilson that, ‘If you will do this, we will help you, about your foreign exchange problem’.⁵³ On 17 July 1966, Henry Brandon, the Sunday Times’ Washington correspondent, wrote to Wilson about the American desire to frame a deal: ‘a long-term, massive loan in exchange for our maintaining all our present military commitments in the near future’. Brandon suggested that Wilson could respond by presenting ‘a bill to the US of what it would cost Britain to agree to American insistence on maintaining these military commitments and ask for some sort of military aid for the duration of Britain’s economic recovery period’.⁵⁴ Wilson’s reply evaded the point, saying little more than ‘we ourselves have been giving a great deal of thought to the problem of the mechanics of consultation over the whole field of public policy’.⁵⁵

Yet on other occasions he made clear his acceptance of a tacit connection between US support for sterling and Britain’s posture East of Suez. On 9 September, Ball told him that ‘it would be a great mistake if the United Kingdom failed to understand that the American effort to relieve sterling was inextricably related to the commitment of the United Kingdom to maintain its commitments around the world’. Wilson admitted that ‘all aspects of the [Anglo-American] relationship must be considered as a totality in any long-range review of the United Kingdom defence effort’.⁵⁶ In a Cabinet meeting in February 1966 he ‘repeated time after time that the Americans had never made any connection between the financial support they gave us and our support for them in Vietnam’, but he added that American ‘financial support is not unrelated to the way in which we behave in the Far East: any direct announcement of our withdrawal, for example, could not fail to have a profound effect on my personal relations with LBJ and the way the Americans treat us’.⁵⁷ Wilson and Johnson did not strike any explicit, formal ‘deal’, but the British leader realised that if Britain began to abrogate its status as a world power, then the Americans might well think twice about providing further financial support. In effect, though, the American approach was superfluous, as Wilson already had no wish to devalue the pound or to initiate deep cuts in Britain’s defence spending. Even before Labour’s return to office in October 1964, Wilson had repeatedly spelt out his commitment to the British defence posture East of Suez.⁵⁸ Moreover, the US stake in international economic stability meant that the Johnson administration would probably continue to support sterling regardless of Britain’s defence posture. Foreign Office official G. C. Mayhew commented on 12 May 1966 that ‘We have … been told over the past 18 months that continued US support for sterling depends to some extent on our willingness to continue to share the US burden east of Suez’. But he was not convinced that ‘the maintenance of sterling as an international reserve currency is of less interest to the Americans than it is to us and that the linking of support for it to a continued British presence east of Suez does not contain an element of bluff’. As his colleague K. J. Uffen added on 5 July 1966, ‘I would have thought it would have remained an American interest to continue to support sterling provided that our economic and monetary policies were not so perverse as to profoundly undermine the basis for international monetary cooperation’.⁵⁹

The idea of American economic support to sustain Britain’s global commitments certainly had some British adherents. Patrick Dean told Paul Gore-Booth on 10 June 1965 that ‘if we feel bound to invite the Americans to assume some of our present commitments East of Suez, or to assist us financially in meeting them, we shall have to convince McNamara, and behind him the White House, that having made all possible economies in our defence establishment, it is still beyond our capabilities to handle them on our own’.⁶⁰ Gore-Booth commented on 12 August that the ‘current alarm felt in Washington lest Britain should disengage from her worldwide role … could and should be turned to profit when American support, financial or otherwise, will make the difference between maintaining the British commitment’ and cutting back.⁶¹ Gore-Booth’s colleague, John Nicholls, suggested on 8 October that the Americans would ‘have to dip their hands into their pockets if they want us to continue playing our present role in the world … economically and financially, we are not in a position to do what the Americans would like us to do’. The ‘only difference is that we now appear to have a pistol at our heads and that, when the Defence Review is completed, it will be somewhat more difficult for the Americans to accept the obvious conclusion that they will have to make it financially possible for us to do what they regard, and what we in our hearts accept, as our duty’.⁶²

British economic problems

The measures of the United States to try to ease its own, substantial balance of payments deficit compounded British economic difficulties.⁶³ On 10 February, President Johnson announced moves to induce US companies to bring more money home and to encourage US banks to reduce overseas lending. Within ‘a few weeks dollars became scarce’ in continental Europe, and ‘the measures seem to have been the direct cause of some withdrawals of funds from London’. On 25 May, Britain made its second IMF drawing of £1,400 million. This was needed mainly to repay the short-term assistance borrowed from central banks in November 1964, but financial experts still remained concerned as to whether Britain had ‘really got to grips with its basic economic problem’.⁶⁴ Wilson realised that to strengthen his ties with the President he had to make it apparent that any American money would not be used to finance a domestic spending spree. Wilson told Johnson on 29 July of the Labour government’s latest economic measures, announced two days earlier:

The British budget was initially well received by economists, but it soon became apparent that the financial markets were ‘unconvinced that the crisis was finally under control’. On 2 August, a newspaper report indicated that President Johnson and William Martin had drawn pessimistic conclusions about sterling. This contributed to ‘heavy and widespread selling of sterling, and devaluation rumours revived’.⁶⁶ (Johnson had said little in public about the British economic situation because, as Fowler had advised on 16 June, any ‘statement … would be taken as an indication of concern and might have unfortunate repercussions’.)⁶⁷ On 5 August, Bundy told Johnson of the renewed pressure against sterling: the British ‘lost $80,000,000 yesterday and $180,000,000 today. Estimates of possible losses tomorrow run between $300,000,000 and $500,000,000’. If the losses continued ‘at this rate into next week, they would literally run out of reserves and be forced into devaluation in a very few days’. Bundy feared that ‘if the Prime Minister is faced with imminent devaluation, he will try to come over here and dump the problems in your lap’. To avoid this, Bundy had warned Derek Mitchell, Wilson’s Principal Private Secretary, ‘that there should be no such visit unless we agree to it, and that I do not myself see what the virtue of it is’. Bundy was sure, he told Johnson, that the ‘Prime Minister will not come without further consultation (he is in fact on a train to the Scilly Isles, because if he changed his plans and stayed behind it might deepen the panic for tomorrow)’.⁶⁸

Wilson had indeed considered ‘dumping’ the problem in Johnson’s lap. On 5 August, in response to the worries of Lord Cromer, the Governor of the Bank of England, he said that ‘if the issue was as bad as he thought, then I would be ready to fly to America for talks with the President and the Federal Reserve authorities there, because, obviously, we were all in it together’. Wilson ‘went so far as to have a call put through to the President on a contingency basis and to make provisional arrangements to have a plane ready to pick me up’.⁶⁹ However, this proved unnecessary, as, due to Wilson’s assurances that Britain would preserve its global role as well as to concerns for international financial stability, the Americans provided help. On 1 September, Bator informed Johnson that the Federal Reserve and the Treasury were ‘hard at work helping the British line up the Continentals’ to participate in another multilateral bailout for sterling. It was likely, said Bator, ‘that by early next week all the major central banks will be on board’. The pound would have ‘a solid international stand-by defence against the speculators which is not likely to cost any of us very much money’. In return, Wilson ‘will have staked his political life on getting Parliament to adopt a more ambitious wage-price policy (short of outright controls) than any major Western country’. Britain at last had ‘a fair chance to contain inflation without enforced and prolonged stagnation’.⁷⁰ The bailout succeeded in bolstering the pound, temporarily at least. Confidence in sterling was renewed by the influx of $1 billion in credits from foreign central banks.⁷¹

The Commonwealth Peace Mission on Vietnam

A Foreign Office analysis from June 1965 examined the Vietnam War in the context of the Anglo-American relationship. It began by noting that British ‘direct involvement’ in Vietnam ‘is insignificant. Our major interest in the situation in Indochina is to see that it does not escalate into a global or regional war in which we might be involved’. But Britain’s ‘interests as a non-communist power would be impaired if the United States Government were defeated in the field, or defaulted on its commitments’. As ‘a major global ally we have an interest in how the United States wages its wars’. Britain could meet its needs ‘by keeping in continuous and close touch with the Americans and showing them that though we make no military contribution in Vietnam we have a number of major assets of value to them’. These included ‘the Co-Chairmanship of the Geneva Conference [1954] which, as the Prime Minister has said in the House, we will use to the advantage of the Western side’; a ‘direct expertise on China which the Americans lack’; and, finally, the British ‘attitude has a bearing on that of others, particularly the Commonwealth’. Britain should ‘give support to our major ally’, and whenever the British declared ‘a determination to seek a peaceful settlement we should accompany this with an expression of general support for the Americans, while avoiding passing judgment on their specific actions’. The analysis did not express much faith in Wilson’s ties with the President, though: Johnson’s ‘secretive nature’ meant that ‘high-level approaches to him’ on Vietnam ‘are difficult’.⁷²

David Bruce tried to foster appreciation in the White House for Wilson’s continued support. On 3 June, he wrote that although the war’s recent intensification could tempt Wilson ‘to buy some easy political credit at the expense of the US on the Vietnam issue, I do not think he will’, because of the depth of his commitment to Washington.⁷³ Yet Johnson remained unimpressed. On 3 June, Bundy wrote to the President, noting Johnson’s ‘scepticism when one or another of us has remarked that the British have been very solid and helpful on Vietnam. And you have recollections … of Harold Wilson’s effort [on 11 February] to telephone his way into a fancy trip to the White House at just the wrong time’. Moreover, Bundy noted, Johnson still felt ‘the wounds of what Home said about the buses and what Michael Stewart said about gas, although everyone else has long since forgotten those particular episodes’. Every ‘experienced observer’, Bundy continued, ‘from David Bruce on down has been astonished by the overall strength and skill of Wilson’s defence of our policy in Vietnam and his mastery of his own left wing in the process’. British support ‘has been of real value internationally – and perhaps of even more value in limiting the howls of our own liberals’. It was true, Bundy told the President, ‘that we would get this sort of backing more or less automatically from a Conservative government, but support from Labour is not only harder to get but somewhat more valuable in international terms’. British support had come cheap to Washington, demanding little more than the effort involved in ‘keeping them reasonably well-informed and fending off one ill-advised plan for travel’ on the part of the Prime Minister. It was ‘well worth our while to keep the British on board as long as it can be done simply by keeping them fully informed and giving them the feeling that they are in the know as we go ahead’.⁷⁴ To Bundy, therefore, Johnson should try to keep Wilson and the British ‘on board’, because the small effort required to do so was a sound investment.

A State Department analysis noted the pressure on the Prime Minister to attempt some kind of initiative to help bring peace to Vietnam. It concluded that Wilson, facing a ‘small circle of pacifists and neutralists in the left wing … of his party … is conscious of the strength of British public opinion for détente with the East’. The ‘role he must play to keep matters under control at home is that of a responsible world statesman, patiently seeking the resolution of disputes while remaining loyal to his chief ally’.⁷⁵ Wilson initiated the so-called ‘Commonwealth Peace Mission’ to try to fulfil these goals.⁷⁶ This was, notes Philip Ziegler with some justification, ‘a dazzlingly ingenious attempt to achieve his three main policy objectives in a single stroke: to maintain the Anglo-American alliance, to fortify the unity and standing of the Commonwealth, and to keep his left-wing quiet’.⁷⁷ On 17 June, Wilson and other leaders of the British Commonwealth, meeting in London, announced that a four-member mission (the Prime Ministers of the United Kingdom, Ghana, Nigeria, and Trinidad and Tobago) would speak to the governments chiefly concerned to try to bring about a peace settlement in Vietnam.⁷⁸ For the benefit of the White House, Wilson had already ‘explained the initiative we had in mind’ to David Bruce, who responded enthusiastically, describing the idea as ‘brilliant’, ‘terrific’ and ‘something with great prospects’. Later, Derek Mitchell told Bruce that Wilson’s idea had been ‘submitted to the most rigorous scrutiny both within No. 10 and by the Foreign Office; but it had survived on the grounds that … it was bound to be a winner whether or not the Mission succeeded’. Even if the communists turned it down, the British and American willingness to talk peace would generate favourable publicity for London and Washington. Mitchell and Bruce then discussed ‘whether there should be any direct contact between the Prime Minister and President Johnson’ on the matter. Mitchell noted that he had advised Wilson against telephoning the President to gain his approval, as when he had telephoned Johnson on 11 February the ‘conversation had been thoroughly unsatisfactory’.⁷⁹

The Ambassador wrote to Washington about his talk with Wilson, stating that the Prime Minister had given the assurance that ‘he would not be a party to any arrangement that was not satisfactory to the United States’.⁸⁰ Bruce also telephoned Bundy to ask ‘whether the President would … send a pleasant personal message to the Prime Minister’. Bundy replied that the President ‘had no liking for hot-line conversations, but he might be persuaded to send Wilson a telegram’.⁸¹ Johnson chose not to respond directly to Wilson, but did forward a message to say that he was ‘keenly interested in the Prime Minister’s imaginative proposal for a mission of Prime Ministers’. Bundy also implied that the exercise interested Washington primarily for its public relations value rather than for the possibility that it might lead to negotiations: even if the ‘mission fails in its immediate purpose, it should also succeed in showing just where the responsibility lies’.⁸² On 15 June, McNamara advised Johnson that he did not think anything would be accomplished by the Commonwealth mission, ‘but if you express your willingness to … have US representatives at a conference under those circumstances’ it would ‘further the peace image that you’re pushing’. The project was ‘primarily’ for Wilson’s political benefit ‘but it fits in with our plans as well’. Johnson responded that he did not ‘see any objection’.⁸³ In presenting the Mission to the House of Commons on 17 June, Wilson omitted to mention his prior cultivation of American support, seeking instead to create ‘the impression he was acting independently’ of Washington. He simply noted that there had been a television report indicating Johnson’s approval.⁸⁴ In private, the Prime Minister felt that he had gained Presidential endorsement of the Mission. He wrote to Johnson on 6 July, pleased ‘that you were able to welcome … a mission on Vietnam’. Johnson’s ‘Baltimore speech last April and repeated offers of discussions since then have been crucial’.⁸⁵ Wilson believed that ‘the Commonwealth – the world in microcosm – has a great role to play in taking the sting out of the major problems that lie ahead of us in international life’.⁸⁶

Wilson wrote in his memoirs that Johnson tried ‘in the most restrained way to counter the line being put out in communist capitals that my initiative was a put-up job on behalf of Washington’. The President, Wilson said, was ‘keen to see any direct line into Hanoi, provided he could keep below the horizon’.⁸⁷ Johnson’s desire to keep a low profile stemmed not only from the need to stop the communists thinking that the peace initiative was a Washington set-up, but from a certain amount of cynicism towards Wilson’s project. On 21 June, he said that North Vietnam and China ‘both have made statements on this Wilson mission, telling him to go to hell … Wilson will just screw things up more when he comes over here’. Johnson feared that the Prime Minister would ‘make a big speech dividing our country’, which was increasingly torn by controversy over Vietnam.⁸⁸ On 23 June, in a discussion in the White House, the President voiced:

On 23 June, Bundy noted that although Moscow had just dismissed ‘the Wilson Peace Mission and in rather tough language’, Wilson’s zeal was such that he ‘expected the British to move right ahead even though no Communists will give them the time of day’.⁹⁰ On 25 and 28 June respectively, China and North Vietnam finally dismissed the Commonwealth Peace Mission.⁹¹ The communists’ perception that Wilson was little more than Johnson’s ‘errand-boy’ contributed to the failure. For example, Hanoi noted in an article in the Party newspaper that Wilson had been ‘trying hard … to keep British policy on Vietnam closely concerted with President Johnson’s thinking’. They argued that the British Prime Minister was far too committed to Washington to be an effective mediator:

The North Vietnamese were of course right in their assertions of Wilson’s commitment to the American line. He seemed to realise himself that he was too close to the US President to be able to mediate properly, telling him on 2 August that British ‘solidarity’ with Washington ‘is nowhere better understood than in Hanoi, whose leaders, in common with other communist governments and their sympathisers, never cease to reproach us for it’. But all the same, Wilson was determined to persevere in his ‘support for American policies which I believe to be in the interests of peace and stability in the world at large, no less than in South East Asia’. In the face of ‘the persistent North Vietnamese refusal to negotiate’, Wilson told Johnson that he saw ‘no alternative to your policy of strengthening your forces in South Vietnam in order to demonstrate to Hanoi the futility of their dreams of military victory’.⁹³ Wilson went on and praised Johnson for ‘the careful balance you have throughout maintained between determined resistance to aggression and a patient insistence on your readiness to negotiate an honourable settlement … I wish there was more we could do to help you.’⁹⁴ It seems that Johnson was responsive to this sort of sycophancy. On 12 August, while speaking to Patrick Dean, he spoke, uncharacteristically, ‘in the highest terms of … the Prime Minister and said he realised only too well how difficult it had been for HMG to continue to support US policy in Vietnam with so small a majority in Parliament’.⁹⁵

The third summit

Wilson’s love of the world stage meant that the idea of visiting the White House was never far from his mind. The part-time White House adviser Richard Neustadt noted on 9 August, after speaking with the Prime Minister, that ‘He wants to see the President, and as we talked he came up with a succession of reasons why the time would soon be ripe for an exchange of views “from politician to politician”’. Neustadt said that these ‘reasons ranged from “Africa” (I tried to look incredulous) to a concert against de Gaulle’s “cold war”’.⁹⁶ Later, Wilson indicated that he wanted to see Johnson to reassure him that the outcome of the Defence Review would not jeopardise American interests.⁹⁷ On 16 November, Bundy told Johnson that he had just heard ‘from Derek Mitchell in Harold Wilson’s office, that Wilson is likely to ask us soon if he can come and see you some time in the second week in December’. The British had ‘completed their major review of defence policy, and before they make decisions, Wilson wants to discuss the problem with you’. Bundy told the President that ‘it may well be in our interests to have Wilson here in December, both to make sure their defence review does not leave us in the lurch in some important part of the world’. Moreover, if Wilson ‘comes to the UN, I don’t see how we can easily avoid a visit’.⁹⁸ On 17 November, Bundy again wrote to Johnson, saying that the British were still ‘eager for an answer on Wilson’s proposal of December 17’. Consistent with the President’s usual lack of enthusiasm for Wilson, Bundy proposed a low-key meeting: ‘the best thing to do with Wilson is one serious talk at the Ranch, and leave it at that … you will not really want to have a lot of ministers on your own’. If Wilson ‘is in this country to address the UN, and asks to see you, there really isn’t much choice’.⁹⁹ Johnson liked the idea of seeing Wilson alone at the ranch in Texas, because this would mean a minimum of fuss. However, Bruce feared that if Wilson did not go to the ranch, then the President would not bother to see him at all.¹⁰⁰ Due to Johnson’s commitments in Washington, it was finally arranged that he would see Wilson at the White House.

To improve attitudes towards him in Washington, on 26 November Wilson told Ball and McNamara, who were then in London, that ‘there was no question of the British Government taking decisions on the Defence Review without discussions with our allies and primarily with the United States’. The first step would be a ‘private talk with the President’ to discern ‘the American views on the various options open to us and see if we could reach agreement on priorities’.¹⁰¹ Bundy told Johnson on 16 December that American enquiries had gleaned from Burke Trend ‘that the British review is leading toward these conclusions: (1) maintain current strength in Europe; (2) stay in the Persian Gulf but pull out of Aden in 1968; (3) cut-back in the Far East as soon as confrontation ends – hopefully in 1968–1970’. Bundy said that if these were Wilson’s ‘preliminary conclusions’, then ‘the sore spot for us is the projected Far Eastern cut back’. The Americans needed ‘a British role at Singapore for as far ahead as we can see, and I think you may want to press the Prime Minister hard on this point’. If the British confrontation with Indonesia ended, ‘the ordinary cost of this Far Eastern position should go way down, and some British presence there is of very high importance to us’. If ‘the new British defence policy foreshadows withdrawal in Southeast Asia, the impact on our own effort will be real’.¹⁰²

On 16 December, Bruce ‘went to the White House at 11.00 a.m., where President Johnson convened Messrs. Ball, McNamara, Moyers, Bundy, Valenti and myself to consider the probable agenda items for his talk with Harold Wilson this afternoon’. The team answered a range of questions from the President, including questions on Vietnam and the British Defence Review.¹⁰³ One of Johnson’s enquiries reflected his disdain for Wilson. The President asked Bruce:

On an earlier occasion Johnson had complained to Rusk that he was ‘pretty fed up’ with Wilson ‘running over here’. He suggested that ‘we botched this in the State Department’ by giving the Prime Minister too much time. This might have ‘reverberations’ among other visiting allies such as Chancellor Erhard of West Germany: ‘Why the hell do we throw in an extra two hours for Wilson?’¹⁰⁵ But as Bruce noted on 16 December, Wilson arrived at Andrews airforce base ‘from New York, where he had addressed the UN’. He then went ‘directly to the White House’,¹⁰⁶ where he spoke with Johnson for about an hour. They then talked together with officials. The topics included Vietnam. On arrival in Washington, Wilson received a telegram from sixty-eight Labour MPs, not only from the left but right across the Party, demanding that the United States should stop bombing North Vietnam, which, it was feared, might escalate into a war with China. The telegram was organised and despatched in complete secrecy to coincide with the Prime Minister’s arrival. Edward Short suggested in fact that Wilson himself had somehow orchestrated the telegram, to remind Johnson of the pressure he faced from the Labour left.¹⁰⁷ Wilson noted later that during his visit he ‘pushed the President hard … at least to suspend the bombing to test the sincerity of North Vietnamese hints that there might be a response on their side, possibly leading to negotiations’. He also indicated that if US aircraft were to bomb Hanoi or Haiphong the Labour government would be ‘forced publicly to dissociate from that action’.¹⁰⁸ However, he also offered his strong ‘support of US efforts to pursue peace … and said that his Government was quite satisfied with the willingness repeatedly expressed by the United States to go to the conference table’.¹⁰⁹

Wilson also outlined to Johnson the findings of the Defence Review. He understood the importance that the United States attached ‘to a continuation of British defence commitments and gave assurances that the British world wide role would be maintained’. He said there would be ‘readjustments in the British defence posture East of Suez but that they would maintain their presence’. In the long run, Singapore ‘might become very tricky’, due to political difficulties there, ‘and the UK had no real assurance that it could be used in times of need’. Consequently, the British government had been ‘considering the possibility of an alternative base in Northern Australia’. Wilson ‘expressed interest in the possibility of defence talks with Australia and New Zealand and, by implication, with the US on the defence problems of the area’. With respect to Aden, Wilson said that ‘this could not be regarded as a long-term base’. In the Persian Gulf there ‘continues to be a need to affirm some protection to Iran and Kuwait’. The Prime Minister thought that Bahrain ‘would have some use in this connection but that generally it should be possible to lighten the British presence in the Gulf’. David Bruce suggested that Wilson was ‘careful in phrasing his remarks on the defence review to indicate a desire to have our comments while avoiding any commitment that British decisions would conform to our views’.¹¹⁰ Though Wilson had made it clear that the British needed to make cuts in the cost of their defence posture, his affirmations that Britain would continue to play a global role satisfied the President. He later took Wilson to the ceremony of switching on Washington’s Christmas lights, which Wilson recalled proudly was the first such honour to be bestowed on ‘a British Prime Minister since one to Mr. Churchill, twenty one years earlier’. In his speech the President confirmed that Britain should continue its peace-making efforts in Vietnam, and claimed that he would support any initiative from London to that end. This, said Wilson, satisfied that his peacemaking efforts had born fruit, ‘was a far cry from the hot line explosion ten months earlier’.¹¹¹ However, Marcia Williams, Wilson’s personal secretary, was more realistic in her interpretation of Johnson’s address. She argued that ‘the speech, far from being complimentary to the British was meant critically, hitting out at us in an oblique way maybe but nevertheless an attack on us for not participating in the Vietnam War.’¹¹² Her interpretation was correct. Earlier that day, in response to a comment from Dean Rusk about the possibility of a British troop commitment to Vietnam, Johnson responded sarcastically that ‘Wilson is going to do nothing. He wants a DSC for fending off his enemies in Parliament’.¹¹³ On the day after the Christmas lights ceremony, 18 December, Bruce ‘went to Andrews Field this morning to see the Wilsons off’.¹¹⁴

Johnson thought well of his talks with Wilson, saying that the ‘most important thing about the meeting was the feel of it, not the substance’. It was ‘like two partners meeting each other after each of them had taken a business trip and each reaching a conclusion that each thought the other did all right … this had been a most satisfactory and helpful discussion’. He added with a hint of sarcasm that ‘the Prime Minister’s expressions of gratitude’ for American economic support ‘had been really touching, and you could not help but like him’.¹¹⁵ Observers also had a good impression of the latest talks. Francis Bator told Bruce that Johnson ‘considered his conversation with Wilson today the most satisfactory he had ever had with a foreign President or Prime Minister, and had voiced a sympathetic feeling about Wilson’. Bruce noted that Wilson himself ‘considers his visit has been eminently successful; he has every right to be pleased, for President Johnson has been favourably impressed by him, and their relationship will be more intimate than heretofore’.¹¹⁶ Bundy reflected that Wilson’s visit ‘marked another step forward in the understanding and mutual respect between the British government and our own’. Wilson was ‘most generous in his expressions of understanding for the way in which the United States Government has stood with the British Government in facing certain financial problems over the last year or more’. Johnson and Wilson ‘were able to confirm their close understanding and support’ for one another, and to ‘understand each other quickly and easily on every issue they discussed’. Both governments ‘will now be able to move forward with confidence in a series of efforts which are of great concern to both of them’. The Defence Review was a ‘special example’ of the value of the summit: ‘The British Government faces very important problems of matching its commitments to its resources, and in most cases where there is a British interest there is a very important American interest, too’. After hearing Wilson’s ‘exposition and discussing it with Secretary Rusk and Secretary McNamara, the President is confident that the two governments can work fruitfully together to meet their common responsibilities’. The ‘firm and clear determination of the British Government to play a constructive world role within the limits of the available resources’ had made this possible. Johnson was also ‘impressed by the Prime Minister’s firm grasp of the fact that the defence of freedom and peace in every part of the world is a matter of high importance to all free men’.¹¹⁷

Henry Brandon of the Sunday Times said that the visit had been the Prime Minister’s ‘most successful encounter with the President so far’. Brandon noted that ‘one or two hasty moves sometime ago did not go down well with Johnson, probably due to Wilson misjudging [the] intimacy of his relations’ with the President. However, the ‘rapport Wilson had previously wrongly taken for granted now seems truly established’.¹¹⁸ On 21 December, Wilson gave the Commons what the US Embassy described as a ‘very optimistic and encouraging report’ on the visit to Washington. The talks were ‘very thorough and searching … brisk, comradely and fruitful’. Wilson doubted ‘whether relations between our two countries have been closer or more frank and marked by clearer understanding … than probably at any time since the Second World War’. There was ‘complete agreement … with HMG’s decision to continue [to] maintain [a] worldwide defence role, particularly to fulfil those commitments which for reasons [of] history, geography, Commonwealth association, and [the] like, we, and virtually we alone, are best fitted [to] undertake’. Moreover, the Prime Minister was ‘absolutely satisfied that the President was anxious and determined … to bring fighting to a speedy conclusion’ in Vietnam ‘and to find an honourable, just and permanent solution’. Finally, Johnson had given the ‘fullest support to Britain’s peace role’.¹¹⁹