One ally among many, October 1967–December 1968
in A ‘special relationship’?
Open Access (free)

The period from October 1967 to December 1968 began with the devaluation of sterling and ended with President Lyndon B. Johnson retiring from office, and therefore constituted the last phase of the Harold Wilson-Johnson relationship. Devaluation did not put a great strain on the Anglo-American relationship, though Wilson had worried about its impact on his standing in the eyes of the President. British plans to withdraw from East of Suez by the mid-1970s, announced on 18 July 1967, had distressed Johnson and his colleagues to the degree that they were less inclined even to keep Wilson informed of developments in Vietnam. On 31 March 1968, Johnson, buffeted by domestic dissent and a mounting death toll in Vietnam, announced that he would not seek another term in office, and the Republican contender, Richard Nixon, won the presidential election on 5 November that year.

The period from October 1967 to December 1968 began with the devaluation of sterling and ended with President Johnson retiring from office, and therefore constituted the last phase of the Wilson–Johnson relationship. Sterling began to slide again from October 1967, and to try to extract financial help, Wilson sought to pressurise the White House with immediate, drastic cuts in Britain’s defence posture. However, his claim to David Bruce, US Ambassador, that he needed to see Johnson to deal with Labour Party criticisms over Vietnam did not impress the Americans. They disliked the idea of foreign politicians visiting Washington for patently domestic-political reasons, and so denied Wilson his hoped-for transatlantic excursion. The White House knew that only a large bail-out might save sterling, but Britain’s prior cuts in foreign commitments meant that there was no real interest in providing help, and by now the Americans had grown confident that they might be able to handle the impact of devaluation. Johnson and his colleagues accepted with good grace the modest 15 per cent devaluation of sterling on 18 November, realising that Wilson had fought the prospect as long as possible. Devaluation did not then put a great strain on the Anglo-American relationship, though Wilson had worried about its impact on his standing in the eyes of the President. More seriously for the ties between Britain and the United States, economic troubles compelled the British to announce on 16 January 1968 an accelerated withdrawal from East of Suez and the Persian Gulf, despite vigorous White House opposition. The next month Wilson paid his last visit to see President Johnson. The talks were cordial enough, but the key Anglo-American issues were already played out. Moreover, the reports of the British Ambassador Patrick Dean indicated that the increasing exposure of Britain’s weakness and declining strategic value suggested that increasingly the country was but one ally among many for the Americans. Finally, in 1969 Wilson sought to establish a ‘special relationship’ with Johnson’s successor in the White House, Richard Nixon.

# The devaluation of sterling

On 19 October 1967, National Security Adviser Walt Rostow told Johnson that as ‘part of a last ditch British effort’ to hold sterling at $2.80, London had raised the bank rate by half a per cent. Trouble had befallen Britain despite everything. In 1966 the British had ‘moved strongly … to support the pound: they deflated their economy, cut down foreign commitments and borrowed heavily abroad’. This programme ‘worked well through the first quarter of this year: they were able to pay off more than$1 billion in debt’, but soon they experienced ‘bad luck: disappointing exports, largely because of the recession on the continent; the Middle East crisis and the closure of the Suez Canal; and rising interest rates elsewhere while theirs were going down’. The British ‘began to lose reserves and had to draw heavily on their line of short-term credits’.1 In London, after deliberations, the Prime Minister, Burke Trend (Secretary to the Cabinet), and John Silkin (Chief Whip) concluded that they should seek American help to obviate the immediate prospect of devaluation, then negotiate with the Americans ‘to see’, according to Wilson, ‘whether they would take the whole burden of the sterling balance from our backs’.2 He advised Chancellor of the Exchequer James Callaghan that Johnson should be warned ‘that we would be forced to take all, or most, of our troops out of Germany and withdrawal from the Far East, Singapore, etc, not in 1975, but immediately’.3 The threat would increase the likelihood of American help, as Wilson had anticipated that any offer of dollar assistance from Washington would be ‘conditional on … more support in the Far East’.4

The Prime Minister himself would deliver the warning during a visit to the White House. This visit would be presented as a mission to discuss Vietnam, in order to avoid fuelling the speculation and rumour that would exacerbate the sterling crisis. Wilson did not reveal his thinking even to David Bruce. Bruce noted in his diary that he was ‘called at 12.30 a.m.’ on 8 November ‘by 10 Downing Street, to hear that the Prime Minister wanted me to go there immediately’.5 Bruce met a Prime Minister seemingly anxious about the fact that the official Labour policy of support for the Americans in Vietnam ‘had become increasingly unpopular in the Party, the Cabinet, and amongst the people generally’. Although Wilson intended to ‘maintain his own position on the subject as affirmed by him in his previous statements’, he ‘thought he could strengthen his authority greatly if he could return from a visit to the President and declare that, after a frank exchange of views about Vietnam, he was satisfied that his attitude toward the problem was correct and in the national interest’.6 Wilson’s contention that he needed to see Johnson about Vietnam was certainly plausible, given the controversy about the matter in Britain. Bruce had noted on 29 October that when the Prime Minister had visited Cambridge University ‘eggs and tomatoes were thrown at him, and cries of “right-wing bastard” and “Vietnam murderer” were uttered. His car was kicked, thumped and beaten upon, its roof dented, the radio aerial smashed, and he was only extricated by the efforts of the police’.7 In their early hours discussion, Wilson also told Bruce that his government was ‘also under heavy attack against its economic measures … and on account of the failure thus far of Common Market negotiations’. Moreover, he ‘expected to be fiercely attacked from within his own Party and, for other reasons, by the Opposition’. Finally, Wilson referred to ‘the instability of sterling’, but revealed little else on the matter.8 Bruce believed Wilson’s assertion that he wanted to visit the White House to ease the pressure about Vietnam. He understood, too, that a Prime Ministerial visit for avowedly domestic purposes would annoy the President, who scorned foreign politicians acting in such a manner.

Bruce tried therefore to dampen Wilson’s desire to cross the Atlantic, asking him ‘whether the result he wished to achieve could not be reached by other methods of communication’. Wilson replied in the negative; ‘a personal meeting with the President would be much more useful to him than anything else’. Bruce then cabled Dean Rusk, US Secretary of State, to say that ‘It is obvious that, in [Wilson’s] view, a meeting with the President would aid him in domestic-political terms’. Though himself unhappy with Wilson’s proposal, the Ambassador said that he could ‘not judge whether it would be undesirable from our standpoint’ for a visit to take place. No one could challenge Wilson ‘for the Party leadership, but his own colleagues could conceivably force him into another stance on Vietnam’. If a General Election was held ‘under the present circumstances, my guess is that the Conservatives would win easily’. Bruce understood ‘thoroughly why the President would not at this time wish to see him: the Prime Minister has only half a loaf to offer, but his continued though limited support seems to me desirable’.9 Bruce telephoned Rusk as well as cabling him, finding him unsympathetic. Rusk was in ‘a dour mood … caustic, even bitter, about the British “reneging” on their SEATO commitments and not sending troops to help us in Vietnam’. The Secretary ‘got in touch with the President’, who, as Bruce put it politely, proved to be ‘entirely disdainful of the idea of receiving the Prime Minister’.10 Later that day Rusk complained to Patrick Dean about the Prime Minister’s effort to inveigle a trip to the White House. The Secretary noted that Wilson, ‘facing a Labour Party revolt over his support for the US in Vietnam … had suggested to Ambassador Bruce the possibility of a quick visit to the United States to talk with President Johnson’, but the White House ‘would take a very negative view of a quick visit for this purpose at this time’. It was ‘hard to see how the visit could help the Prime Minister at home unless he could be seen to be putting pressure on the US – a situation which we would not welcome’.11

Wilson expressed some of his own concerns in a letter intended for Johnson. The letter confirms that the Prime Minister sought to threaten immediate military withdrawals in Europe and Asia unless the White House orchestrated another bail-out for sterling. Wilson said that in talks he and Johnson ‘could dispose of’ the topic of Vietnam ‘in a few minutes, on a basis that would help me to hold the House of Commons and public opinion’. Wilson noted, though, that he had ‘mentioned to David Bruce the urgency of my seeing you on another matter, namely the economic and financial sphere’. Britain faced a ‘most critical situation where decisions of a very fundamental character will … have to be taken within three or four days’. If ‘we have to take the decisions without top-level consultation it can only have the most far-reaching consequences for us, for you, for Europe, not only economically but in other ways’. There would be ‘strong and possibly irresistible pressure for decisions on defence which could have the most grave consequences for the alliance and our common purpose’. Wilson would be ‘loth to be forced to take these decisions, with all the possible consequences, without a consultation with you’. The issues were so grave that that ‘they cannot be adequately dealt with at Treasury Minister level despite our great confidence in both of them and the constructive partnership between them’. But ‘equally if we are to discuss this it is impossible for me to give this as the reason for my journey’, as ‘People would draw immediate conclusions and the effect on foreign exchange markets would be disastrous within hours’. Wilson again expressed his desire to see Johnson, saying that ‘decisions will have to be taken which could affect all we have discussed and our common purposes for years to come. We could agree a cover story’, such as Vietnam or the Middle East.12 But the Prime Minister withheld his letter, probably because he now recognised that his chances of securing an audience with the President were not promising.

There were few suspicions that Wilson was concerned less about discussing Vietnam with Johnson than with raising the question of help for sterling, not least because of the secrecy under which Wilson was operating. Even George Brown, the British Foreign Secretary, was told only belatedly of the Prime Minister’s desire to go to Washington. Wilson said later that he was ‘very conscious that George, who knew nothing about our plans but had a rough idea that sterling was dicky, knew nothing either of my sending for Bruce’. On 9 November, Wilson enlightened him about the idea of seeing Johnson to secure financial help. Brown ‘had some doubts’, Wilson noted, ‘whether anyone would believe the Vietnam story’.13 In the absence of a Prime Ministerial trip to Washington, the Americans were kept informed about Britain’s economic situation via the British Treasury. On 12 November, the US Secretary to the Treasury, Henry Fowler, advised Johnson that the British were now ‘at the end of the line, unless they have assurance of long-term credit soon’. The British had ‘come in for help before, but they have never indicated so clearly that without help, they will be forced to take the plunge’. They were ‘now scraping the bottom of the barrel’. Fowler suggested that ‘it might be tempting to settle this perennial problem now and let sterling go’.14 This policy would be acceptable only:

If the devaluation were modest (10–15 per cent).
If everybody cooperated (the Common Market, Japan, Canada, and Australia held – and few devalued).
If Wilson were able to hold his foreign commitments – Germany and East of Suez.
If, and this is the big if, Wilson can maintain his government and the movement were not wasted because of internal British pressures.15

Fowler suggested, though, that even if these ‘worked out … the world might not believe a “modest” devaluation would be adequate and pressure on sterling could continue’. He recommended a $3 billion multilateral ‘support package’, orchestrated by the United States through the IMF, governments and private banks.16 Rostow supported this position, telling the President on 13 November that without an ‘assurance of long-term credit’ the British ‘may have to devalue – perhaps within a week’.17 Though denied his visit to Washington, Wilson persisted with his veiled threat about a bail-out for sterling or immediate troop withdrawals across the world. On 13 November, Denis Rickett, a senior Treasury minister, arrived in Washington ‘armed with instructions’ – undoubtedly from Wilson – ‘to make their flesh creep with talk of pulling out of Singapore (to keep control of the party) and [out] of Germany’.18 Yet this talk had less effect on the White House than Wilson anticipated. For a start, the British plans – announced in July 1967 – to withdraw from East of Suez by the mid-1970s seemed to have strained the White House’s sympathies for London to the extent that there was little sustained debate about the idea of another rescue of the pound. At the time of the September 1965 bail-out, the Americans had intimated that further assistance would be less likely in a situation where the British were cutting back on their international commitments, and Wilson had in turn made it clear that Britain intended to remain a world power. Now, economic and political difficulties meant that whatever his personal feelings, Wilson’s dedication to the East of Suez role could have little impact. Furthermore, although Johnson believed that devaluation had to be handled carefully to avoid an international financial crisis, he was more concerned to mitigate the aftershock of the measure than to dispense another bail-out.19 Philip Kaiser of the US Embassy noted in his memoirs that in 1964–67 Wilson’s ‘determination not to devalue the pound fitted nicely with his desire to strengthen Anglo-American ties, and to develop close personal relations with President Johnson’.20 Consequently the Prime Minister was especially sensitive to the impact of devaluation on his ties with Johnson. On 17 November, Wilson sent Johnson a lengthy, candid, and ‘very secret message’ to say that ‘the Government have decided to devalue the pound this weekend’. The President knew ‘how resolutely I have sought to avoid taking this step’, and of the ‘hard and unpopular decisions we have had to take since we came to office, landed with a £800,000,000 debt’. These measures were designed ‘not only to hold the pound, but also, more fundamentally, to transform the economy and the technological and industrial base of British society’. Great progress had been made, said Wilson, until ‘the ground was cut from under us by events in the Middle East’, which ‘disrupted our trade and surcharged our imports’. There was also ‘a continuous wave of speculation against the pound, which was aggravated by the disproportionate impact of the dock strikes here and the general rise in world interest rates’. Wilson continued to say that ‘I wanted you, who have been so generous in your help and encouragement over these last few years and who yourself face such immense difficulties and problems, to have the full picture of the political decisions we have been obliged to make’. The Prime Minister felt optimistic about the likely effect of devaluation: ‘providing that, as we confidently believe, the pound can now again become a strong currency and our economy forge ahead in the new circumstances, I can assure you that, while we shall inevitably be making some reductions in defence expenditure, we shall nevertheless be able to maintain, both in Europe and East of Suez, the policies set out in the Defence White Paper, as I explained them to you at our last meeting’, in June 1967.21 Wilson’s office asked Patrick Dean to give the Prime Minister’s message to the President ‘at 1300 hours Washington time on Friday November 17’. The timing would ensure that it did ‘not … appear that the President was hearing the news’ of devaluation later than did the IMF.22 The Johnson Administration knew that Wilson had resisted devaluation as long as possible, and reacted with equanimity: according to the President, the news was merely ‘like hearing that an old friend who has been ill has to undergo a serious operation’.23 At just 15 per cent the devaluation was a relatively modest one – a CIA analysis noted that it would have taken a devaluation of 25–30 per cent to remove any lingering doubts about the competiveness of British goods.24 Johnson told Dean sympathetically that he was ‘putting his stack behind the Prime Minister’.25 On 18 November, Wilson thanked Johnson for the ‘open-hearted way in which you responded to my message’.26 The President’s cable of 23 November was another tonic for Wilson: ‘my faith is deep that the British people have the will and the means both to pay their way and to continue to play the part they must in the world’.27 Wilson also thanked Dean for ‘his handling of the President … a model of what I hoped it would be’.28 Dean responded that ‘One of the most satisfactory features of the whole business was the friendly and helpful attitude of the President, Joe Fowler, Dean Rusk and others from the very beginning’. The Ambassador knew ‘of course that they had a very keen interest in the outcome, but even so they seem all to me to have gone out of their way to be as helpful as possible’.29 Similarly, on 20 November Dean had told Michael Palliser, Wilson’s Foreign Office assistant, that although the diplomacy of the British economic crisis had meant ‘a pretty tiresome time’ for the Embassy, ‘One great thing to come out of it well is Anglo-American relations’. Regardless of the fate of Britain’s application to join the EEC, an optimistic Dean could not ‘help feeling that … our ties with the Americans can and should grow stronger’.30 Yet economic troubles did little for Britain’s standing in Washington. A CIA analysis reported on 28 November that the devaluation of sterling had ‘induced at least 20 smaller countries to devalue their currencies and set the stage for a run on the London gold market that by 24 November had reached panic proportions’.31 On 12 December another CIA analysis noted that ‘The British Government is reported to consider its recent devaluation of the pound a failure and may adopt a floating exchange rate, perhaps within a few days’. If this were done, ‘sterling could move downward in response to market forces until it stabilised, probably at a rate much lower than$2.40’. This would ‘disrupt the international financial system, possibly causing an upheaval in world trade and economic recession in many countries’.32 On 4 June, Bruce wrote that devaluation had greatly undermined Wilson’s political position: the Labour government’s ‘three-year effort to maintain parity of sterling – at the sacrifice of cherished socialist principles and promises – was a failure’. Wilson’s ‘subsequent bland refusal to admit failure has deepened mistrust and sapped public support, and the struggle with the unions over compulsory incomes policy has alienated many Labour Party loyalists’.33 A State Department analysis from the same time contended that Britain’s ‘post-devaluation economic programme’ could well prove inadequate, because of:

a history of repeated crises; organised labour’s reluctance, if not unwillingness, to accept wage restraint; archaic labour and management practices; a stubbornly high level of import demand; high interest rates in the US and in Europe; Britain’s precarious liquidity position; continuing nervousness about sterling; and the generally precarious international monetary situation.34

Sterling was not devalued again, but as late as November 1968 Johnson and Wilson were corresponding about the problems faced by the pound.35

# East of Suez

British plans to withdraw from East of Suez by the mid-1970s, announced on 18 July 1967, had distressed Johnson and his colleagues to the degree that they were less inclined even to keep Wilson informed of developments in Vietnam – even though there were more than 400,000 US troops there in 1967.36 On 15 August 1967, Michael Palliser complained to Philip Kaiser that Wilson’s ‘difficulties’ with public opinion and the Labour left over Vietnam ‘should be rather better appreciated’ in the White House. There was much ‘public concern’ in Britain, expressed frequently ‘in the press, radio, etc., to say nothing of the immediate and sharp reaction by a number of … backbenchers’. American policy seemed to be moving ‘towards a more hawk-like and potentially very dangerous form of escalation; and all this without any subsequent consultation’ between the President and Wilson. The White House should not doubt Wilson’s concern and his ‘need for much fuller information about the President’s current intentions and policy’. Kaiser retorted that there had been ‘no fundamental change in US policy, and that the recent escalation of US bombing was merely part of the long-standing process of ‘continuing to hit supply lines’. But ‘however friendly’ Johnson’s ‘personal feelings’ for Wilson, the President might react ‘sharply to any more formal approaches’ for information ‘in view of our recent decisions in the context of the Defence Review “East of Suez”’. Kaiser said that the ‘East of Suez decisions caused deep resentment in Washington’, and that this resentment ‘might … be responsible for the President’s failure to keep in touch’ with Wilson about Vietnam.37

Wilson failed to do so, though, and the two leaders merely discussed events in Vietnam.41 Anthony Howard of the Observer reported from Washington on 31 December that Johnson had originally ‘hoped that Wilson would divulge his policy intentions – and lay himself open to the famous LBJ treatment of persuasion – on his … visit to Washington, at one time expected to take place this weekend’. Instead, Wilson ‘startled the President when they met in Australia by insisting that the trip he himself had suggested would not now be convenient until February’. This ‘aroused White House suspicions that the Prime Minister was determined to present a fait accompli, both in arms contract cancellations and in a final British withdrawal from the Far East by 1971’. As a result of this ‘draining of confidence’ in Wilson, ‘very little hope is now felt here … of … the \$750 million F–111 contract … remaining unscathed’ (the British had ordered fifty of these American-made jet fighters in January 1966). Moreover, ‘the impression had rapidly gained ground’ in Washington ‘that the Prime Minister is more than willing to sacrifice Singapore as a sop to his left-wing rather than to make unpopular social welfare cutbacks at home’.42 Howard was mistaken to suggest that Wilson preferred reducing defence commitments to making cuts in domestic programmes, but Washington’s disapproval of the former meant that the Prime Minister was unwilling to face the Americans himself – not least because at the time of devaluation he had told Johnson that the British would maintain the remaining commitments outlined in the Defence White Paper of 18 July 1967.

The British Embassy’s Annual Review for 1967 suggested that ‘the withdrawal of a major part of our forces East of Suez and our announced intentions for Southeast Asia in the mid-1970s’ meant that the White House ‘will be liable to consult with us less and take us less into their confidence about areas of the world from which we are consciously opting out’. The United States would ‘behave increasingly in a manner which reflects the fundamental inequality’ of its relationship with Britain.43 On 1 January 1968, Patrick Dean informed the Foreign Office of Washington’s concern ‘that we shall dispose with dangerous haste of the unique political and strategic assets which they regard us as holding in trust for the West through our presence, reduced though it is, in Europe, the Middle East, and in Asia’. Britain’s demise, said Dean, as ‘a leading financial and military power would create more than just a vacuum which they do not feel able or willing to fill themselves’. The White House understood its ‘interest in Britain’s redressment’ and ‘the psychological need for cuts overseas if domestic cuts are to be made effective’. However, Congress, which embodied ‘American Puritanism’ as well as ‘hypocrisy’, might think that the US was ‘subsidising the British Welfare State while we are shifting more of our defence burden on to American shoulders’. Congressmen ‘could make it very difficult for the Administration to provide the financial support we need when sterling is in trouble’. Dean also believed that further British defence withdrawals could encourage the United States to ‘slide rapidly into neo-isolationism … they will go their own way with less and less regard for the concerns and interests of other nations’. It would be a mistake ‘to underrate the underlying strength of this mood in Congress and in the country at large and its inhibiting effect on the Administration notwithstanding the reassuringly close and friendly relations which exist between the President and the Prime Minister and the two Secretaries of State’. It was the mood of neo-isolationism ‘rather than the loss of the physical contributions which we can make to the defence of American and free world objectives in the broadest sense that makes the Administration so sensitive to our actions’. Against the background ‘of the reassessments which we have given in the past two years, and more recently in the context of devaluation, it will be essential and by no means easy to convince’ Washington ‘that there is still a distinction to be drawn between contraction and contracting out’.44

Rather than face the Americans himself, Wilson sent George Brown to Washington to outline British plans. Brown told Dean Rusk on 11 January that ‘Britain had lost the battle to avoid devaluation … because they had been trying to do too much at home and abroad with too slender resources’. Since then the Government had been considering ‘what cuts in spending must be made to assure confidence and to avoid further devaluation’, concluding that ‘this required a switch of £1 billion, including substantial cuts at home’. A predominance of domestic cuts would be ‘unpalatable’, as it ‘would involve an attack on some cherished social programmes, such as health and education’. Therefore the Labour government was ‘forced again to look at defence expenditures overseas’, and specifically to ‘accelerate the rundown in the Far East … there would be no bases on mainland Asia by March 31 1971, instead of by the mid-70s’. British forces would also ‘leave the Persian Gulf by the same time’. Rusk expressed ‘profound dismay’ at the news, and he was ‘particularly disturbed by the intention to announce these decisions’. If, ‘pending its entry into Europe, the UK dropped back to a little England he could not help but feel that this would generate a descending spiral across the board’. If the ‘teacher abandon[ed] the field, Americans would ask if no-one else was interested, why should they be?’ Isolationism was ‘growing in the US because of the feeling that Americans were carrying the problem alone’.45

On 15 January, Johnson reiterated to Wilson that ‘the announcement of an accelerated British withdrawal both from its Far Eastern bases and from the Persian Gulf would create most serious problems for the United States Government and for the security of the entire free world’. Americans would ‘find great difficulty in supporting the idea that we must move in to secure areas which the United Kingdom has abandoned’. In particular, Johnson expressed concern about reports in the London press that ‘the Cabinet has in fact decided to cancel the F– 111’. The jet, ‘because of its range and overall capability’, would permit the forces of the United Kingdom to deploy to the Far East and the Persian Gulf ‘from its own bases’. This might ‘alleviate somewhat the strong reaction which will inevitably take place’. However, if Britain ‘decided to forego the acquisition of the F-111, everyone here will regard this as a total disengagement from any commitments whichsoever to the security of areas outside Europe, and to a considerable extent in Europe as well’. It would also ‘be viewed here as a strong indication of British isolation which would be fatal to the chances of cooperation between our two countries in the field of defence’.48

Wilson responded at length to the President the same day: the ‘heavy sacrifices at home would have been pointless without drastic retrenchment abroad’. This was not ‘simply a matter of party politics – of keeping some kind of “balance” to force the unpleasant home medicine down the throats of our party supporters’. The issue was much ‘wider than party politics – the politics of the nation and the sense of purpose of the British people as a whole’. The British were ‘sick and tired of being thought willing to eke out a comfortable existence on borrowed money’. Recent weeks had seen ‘an astonishing assertion of this kind of spirit throughout the nation and irrespective of party’. There was still a ‘confused groping for the real role that Britain ought to be playing in the world; and it has been striking to observe … not only the extent to which people are prepared to accept drastic sacrifice at home but also their demand that we must no longer over-strain our real resources and capabilities in the military field abroad’. But this did not mean ‘a British withdrawal from the world’, as the ‘spirit that has been running through this nation in recent weeks is not that of “Little England”.’ It was instead ‘a blend of exasperation at our inability to weather the successive storms of the past twenty years and determination, once and for all to hew out a new role for Britain in the world at once commensurate with her real resources yet worthy of her past’. This could not be done ‘on borrowed time and borrowed money’, said Wilson.49

In the Far East and the Persian Gulf, Wilson continued, ‘our present political commitments are too great for the military capability of the forces that we can reasonably afford, if the economy is to be restored quickly and decisively’. Britain ‘must now take certain major foreign policy decisions as the prerequisite of economies in our defence expenditure’. By setting ‘realistic priorities’, Britain could strengthen its ‘influence and power for peace in the world’. This idea underlaid ‘the intention, conveyed to Dean Rusk by George Brown, to withdraw our forces from the Far East and the Middle East by the end of the financial year 1970/71’. But ‘in the light of’ concerns from the United States and other allies, ‘we have decided to defer our withdrawal for a further nine months, i.e. to the end of 1971’. This would ‘still seem too soon’ for Johnson, but it was ‘a significant contribution to the time needed to help those in the areas concerned prepare for the day when we shall no longer have a military presence there’. So far as the F–111 was concerned, ‘the only way we can achieve the really decisive economies that are essential in the hardware budget of the Royal Air Force, while still keeping effective and sophisticated capabilities in all three services, is to cancel the order for the 50 F–111 aircraft’. Wilson hoped that Johnson was ‘wrong in assessing that this decision will be interpreted abroad as a disengagement from any commitments to the security of areas outside Europe or indeed largely in Europe as well’. The decision was not an ‘indication of British isolation’, as Britain would ‘not be withdrawing from our three major alliances; and the general capability we shall retain in this country and on the continent can also be deployed overseas’. Wilson ended on a personal note: ‘Believe me, Lyndon, the decisions we are having to take now have been the most difficult and heaviest of any that I, and I think all of my colleagues, can remember in our public life’. Those decisions were not taken ‘in a narrow or partisan spirit’, but because ‘in the longer term, only thus can Britain find the new place on the world stage that I firmly believe the British people ardently desire’.50

On 16 January, the Wilson government announced ‘heavy cuts in public expenditure’, including the accelerated withdrawal from East of Suez and the Persian Gulf. The cuts ‘fell hardest on defence spending and military commitments abroad but they also hit some sacred socialist programmes, such as free medical prescriptions, education and housing’.51 On 17 January, Michael Palliser told Wilson of a conversation with Edward Tomkins, a minister at the British Embassy in Washington, who said that the White House felt ‘double-crossed by the British Government in terms of the assurances given to them both in July and at the time of devaluation that the decisions then taken were not in conflict with basic foreign policy objectives and represented final decisions on our force commitments East of Suez’.52 On 31 January, Dean, lamenting the recent British announcement, asked Rusk ‘if the President would ask Wilson to reconsider the decision to withdraw by the end of 1971 from Singapore/Malaysia and the Persian Gulf’. Rusk responded that ‘there was nothing new to add to what the Secretary had told George Brown or to what the President had written in his two messages to Wilson, especially as none of these representations had been very successful’.53 On 2 February, Dean noted that the defence cuts had ‘without question been a watershed in Anglo-American relations’, and that ‘the Americans will with some justice be disposed to make their own dispositions without consulting or considering us’.54

On 5 February, Dean reflected that although Anglo-American relations were ‘not in the forefront’ of American minds, there was still a degree of ‘resentment, including on the President’s part, that they were not really consulted but presented with faits accomplis’. This had ‘hurt them deeply’. However, they accepted that ‘a new situation exists and there is no disposition to wish to express resentment in any practical way just for the sake of doing so’. Johnson would be ‘less interested in detailed justification of why our decisions were necessary than in the positive aspects of our future policies which will be of help to him’.55 That day the President expressed to the Sunday Times’s Washington correspondent Henry Brandon his regret towards the British East of Suez decisions. Britain and the United States would ‘always remain friends’, but ‘when our common interests shrink, the flow of communications and common business shrinks, too. What Britain did was unnecessary, unwise and not in the British interest’.56 In June 1968 the State Department reflected that the Labour government had ‘accelerated curtailment of world-wide commitments and clarification of its policy towards Europe’, but the process was ‘far from complete’. Continued ‘frustration of Britain’s new European vocation nourishes traditional British parochialism, resentment toward France, and suspicion of Germany’. The Conservatives had attacked the government’s ‘retreat from East of Suez’, but before they could assume power ‘the cutbacks will probably have gone so far as to be irreparable’. Britain’s future was ‘at best, a middle-sized European power, albeit one with a nuclear capability, a residual sense of extra-European responsibility and a continuing, if diminished, status as a favoured partner of the US’.57

# The last summit

Although on 8 November David Bruce had discouraged Wilson’s efforts to visit Washington, the Ambassador soon became more sympathetic – probably because of the fortitude with which the Prime Minister was dealing with the critics of the US position in Vietnam. On 16 November, while discussing the possibility of a visit to Britain of Vice-President Hubert Humphrey, Bruce told the State Department that Wilson had ‘obviously anticipated using a conversation with the Vice-President as a lever to pry open for himself an opening for a trip to the United States to see the President’. Bruce recommended that ‘simultaneously with a notification to the Prime Minister … of the Vice-President’s inability to accept the engagement, the President [should] agree to receive him in Washington for a short conversation in December’. Bruce ‘emphatically divorce[d]’ himself ‘from any charge of being influenced by the PM’s representations on this account’. Seldom, ‘if ever in recent times have the domestic pressures in Britain been as great as they now are against the Government’s various actions which involve close cooperation with the United States in support for the most part of our major policies’. Wilson had so far restrained the situation by his ‘firmness … in resisting proposals for drastic changes’. Newspaper accounts and ‘political gossip have been rampant for months here to the effect that Wilson has forfeited the confidence of President Johnson’. Bruce was ‘convinced that it would be salutary, and in our national interest, if this meeting so ardently desired by the Prime Minister could take place’. Neither a Conservative government nor a Labour one could ‘quickly remedy present ills, and we must, perhaps for a long time, rely as far as we are concerned in these affairs on cooperation with us by the present Prime Minister’. It would ‘be productive and helpful to have him personally explain to the President the nature of his problems, and how he proposes to deal with them’. Certainly, ‘the President’s views would be of great importance in shaping his tactics’.58

On 4 December, Bruce told Wilson that Johnson ‘would be glad to welcome him at any time’.59 Wilson’s sixth and, as it turned out, last visit to see President Johnson was arranged for 8 February. The idea prevailed among the Americans that the Prime Minister was using his trip not primarily as a means of settling any Anglo-American matters – for the key issues concerning Britain’s role in the world had lapsed – but as a respite from his difficulties at home. Rusk informed Johnson on 3 February that Wilson’s visit ‘takes place against a background of increasing troubles … at home’. A ‘Cabinet battle in January over the cuts in governmental expenditure deepened the divisions in the Labour Party and further weakened Wilson’s standing in the country’.60 On 6 February, Bruce, while helping to draft the after-dinner toast for Wilson, said that he wanted the President to indicate that the visit had first been mooted some months ago. This approach would help to ‘blunt British-US criticism of Wilson’s visit as a “patch job to divert attention from domestic problems”’.61 On 7 February, Walt Rostow advised Johnson that ‘Wilson is in trouble at home. His visit here is designed to boost his prestige in Britain’. The Prime Minister still commanded ‘a comfortable majority in Parliament’, but ‘his failure to deal decisively with Britain’s economic problems has lost him the confidence of much of his party and most of his countrymen’.62 A State Department analysis on 7 February continued this theme by stating that Wilson’s visit:

comes at a time when he is under increasing pressure and criticism at home – from some members of his own Labour Party who are upset at the cutbacks in the planned level of domestic spending, especially in education and welfare programmes; from the Tory opposition, which is unhappy about the government’s plans to accelerate withdrawals of military forces from the Persian Gulf and East of Suez, and from most of the press and public which have discovered a Wilson ‘credibility gap’.63

The analysis also noted that ‘The public in general and Labourites in particular feel that Wilson has broken promise after promise’. Much of the national press was ‘currently portraying Wilson as a discredited, broken, pathetic little man’.64

# Exit Lyndon Johnson, enter Richard Nixon

right at the outset of our relationship, I wanted to say to him what I had said to his predecessor at my first Prime Minister/President meeting with him, namely that I would not say anything about him or our relationships outside the conference room that had not been said inside, but that I would say a great deal inside that would not be repeated outside. Further, I would not feel it my duty to tell the outside what I had said to him – and to him only.79

1 Rostow to Johnson, 19 October 1967, Foreign Relations of the United States 1964–1968 , vol. VIII, International Monetary and Trade Policy (Washington: USGPO, 1998), pp. 419–20.
2 Quoted in Ben Pimlott, Harold Wilson (London: Harper Collins, 1992), p. 476.
3 Ibid.
4 Ibid., p. 475.
5 VHS, Diary of David K. E. Bruce, MSS 5:1B8303:62, entry for 8 November 1967.
6 NARA, Subject-Numeric 1967–69, POL 27 Viet S, 11.5.67, Bruce to Rusk, 9 November 1967.
7 VHS, Diary of David K. E. Bruce, MSS 5:1B8303:62, Embassy to State, 16 November 1967.
8 NARA, Subject-Numeric 1967–69, POL 27 Viet S, 11.5.67, Bruce to Rusk, 9 November 1967.
9 Ibid.
10 VHS, Diary of David K. E. Bruce, MSS 5:1B8303:62, entry for 8 November 1967.
11 NARA, Subject-Numeric 1967–69, POL 27 Viet S, 10.10.67, Rusk–Dean conversation, ‘Labour Party Revolt on Vietnam’, 8 November 1967.
12 PRO, PREM 13/1447, ‘Draft Message to the President’, undated.
13 Quoted in Pimlott, Harold Wilson, pp. 475–6.
14 Fowler to Johnson, 12 November 1967, FRUS 1964–1968 , vol. VIII, pp. 434–6.
15 Ibid.
16 Ibid.
17 Rostow to Johnson, 13 November 1967, ibid., p. 437.
18 Alec Cairncross, The Wilson Years: A Treasury Diary (London: Historians’ Press, 1997), p. 244, entry for 13 November 1967.
19 Lyndon B. Johnson, The Vantage Point: Perspectives on the Presidency 1963–1969 (New York: Holt, Rinehart and Winston, 1971), p. 316. On post-devaluation Anglo-American economic cooperation, see Rajarshi Roy, ‘The Battle for Bretton Woods: America, Britain and the International Financial Crisis of October 1967–March 1968’, Cold War History, 2:2 (January 2002), pp. 33–60.
20 Philip M. Kaiser, Journeying Far and Wide: A Political and Diplomatic Memoir (New York: Scribners, 1992), pp. 235–6.
21 PRO, PREM 13/1447, Wilson to Johnson, 17 November 1967.
22 PRO, PREM 13/1447, Palliser to Washington Embassy, 16 November 1967.
23 Johnson, The Vantage Point, p. 316; Kaiser, Journeying Far and Wide, p. 249.
24 Roy, ‘The Battle for Bretton Woods’, p. 46.
25 Harold Wilson, The Labour Government 1964–1970: A Personal Record (London: Weidenfeld and Nicolson, 1971), p. 457.
26 LBJL, NSF: Memos to the President, Box 28, Rostow Vol. 51 November 16–25 1967 (2/2), Wilson to Johnson, 18 November 1967.
27 PRO, PREM 13/2058, Johnson to Wilson, 23 November 1967.
28 PRO, PREM 13/1447, Wilson to Dean, 18 November 1967.
29 PRO, PREM 13/2058, Dean to Wilson, 21 November 1967.
30 PRO, PREM 13/1447, Dean to Palliser, 20 November 1967.
31 LBJL, NSF: Country File, Box 211, UK Memos XII 7–12/67, CIA Intelligence Memorandum, ‘Repercussions from Sterling Devaluation’, 28 November 1967.
32 LBJL, NSF: Country File, Box 211, UK Memos XII 7–12/67, CIA Intelligence Memorandum, CIA Intelligence Memorandum, ‘Continued pressure on Sterling and the Dollar’, 12 December 1967.
33 LBJL, NSC Meetings File, Box 2, NSC Meetings Vol. 5 Tab 69 6/5/68 Current Issues Affecting Anglo-American Relations, Bruce to State, 4 June 1968.
34 ‘Directions of UK Policy’, undated, Foreign Relations of the United States 1964–1968 , vol. XII, Western Europe (Washington: USGPO, 2001), p. 620.
35 See Documents 210–213, FRUS 1964–1968 , vol. VIII, pp. 580–2.
36 Robert D. Schulzinger, A Time for War: The United States and Vietnam, 1945–1975 (Oxford: Oxford University Press, 1998), p. 246.
37 PRO, PREM 13/2459, Palliser to Wilson, 15 August 1967.
38 Bowie to Rusk, 20 July 1967, Foreign Relations of the United States 1964–1968 , vol. XIII, Western Europe Region (Washington: USGPO,1995), pp. 597–8.
39 Jeffrey Pickering, Britain’s Withdrawal from East of Suez: The Politics of Retrenchment (London: Macmillan, 1998), p. 164.
40 PRO, PREM 13/1446, Palliser to Broadbent, 20 December 1967.
41 PRO, PREM 13/2459, ‘PM’s talk with President Johnson in Melbourne 22.12.67’; Wilson, The Labour Government, p. 478.
42 NARA, Subject-Numeric 1967–69, DEF 1 UK, 1.1.68, Bruce to State and Defence, 4 January 1968.
43 PRO, FCO 7/738, AU 1/1, ‘United States: Annual Review for 1967’, 5 January 1968.
44 PRO, PREM 13/3551, Dean to Foreign Office, Telegram No. 3, 1 January 1968.
45 Brown–Rusk conversation, 11 January 1968, FRUS 1964–1968 , vol. XII , pp. 603–5.
46 PRO, FCO 7/741, AU 1/4, Dean to Gore-Booth, 2 February 1968.
47 Johnson to Wilson, 11 January 1968, FRUS 1964–1968 , vol. XII, pp. 608–9.
48 Johnson to Wilson, 15 January 1968, ibid., pp. 609–11.
49 Wilson to Johnson, 15 January 1968, ibid., pp. 611–14.
50 Ibid.
51 LBJL, NSF: Country File, Box 212, UK: Memos XIII 1/68–7/68, CIA Intelligence Memorandum, ‘Prospects for Harold Wilson and for the UK Economy’, 6 June 1968.
52 PRO, PREM 13/3016, Palliser to Wilson, ‘Anglo-American Relations’, 17 January 1968.
53 NARA, Subject-Numeric 1967–69, POL 7 UK, 1.1.68, Dean–Rusk conversation, ‘Prime Minister Wilson’s Visit’, 31 January 1968.
54 PRO, FCO 7/741, AU 1/4, Dean to Gore-Booth, 2 February 1968.
55 PRO, PREM 13/2454, Dean to Palliser, Telegram No. 443, 5 February 1968.
56 Quoted in Henry Brandon, Special Relationships: A Foreign Correspondent’s Memoirs from Roosevelt to Reagan (London: Macmillan, 1988), p. 231.
57 ‘Directions of UK Policy’, undated, FRUS 1964–1968 , vol. XII, p. 619.
58 VHS, Diary of David K. E. Bruce, MSS 5:1B8303:62, Embassy to State, 16 November 1967.
59 VHS, Diary of David K. E. Bruce, MSS 5:1B8303:62, entry for 4 December 1967.
60 LBJL, NSF: Memos to the President, Box 28, Rostow Vol. 60 Feb. 7–9 1968 (2/2), Rusk to Johnson, 3 February 1968.
61 LBJL, Statements of LBJ, Box 265, Exchange of Toasts Between the President and Prime Minister Wilson, ‘Meeting with Ambassador Bruce, February 6 1968 – 11:00 am’.
62 LBJL, NSF: Memos to the President, Box 28, Rostow Vol. 58 Jan. 25–31 1968 (1/2), Rostow to Johnson, 7 February 1968.
63 LBJL, NSF: Country File, Box 216, UK: Visit of PM Wilson 2/7–9/68, State Department Research Memorandum, ‘Wilson Plagued by Domestic-Political Problems on Eve of Washington Visit’, 7 February 1968.
64 Ibid.
65 Bruce diary entry for 8 February 1968, FRUS 1964–1968 , vol. XII, pp. 615–16.
66 See Wilson, The Labour Government, pp. 496–503, and PRO, PREM 13/2455, for records of the talks.
67 Bruce diary entry for 8 February 1968, FRUS 1964–1968 , vol. XII, pp. 615–16. There is no evidence that Johnson had a hand in the choice of music, although the possibility cannot be dismissed. Wilson, The Labour Government, p. 497.
68 PRO, FCO 7/741, AU 1/4, Dean to Gore-Booth, 1 March 1968.
69 Louis Heren, ‘Anglo-US Relationship Comes Under Strain’, The Times, 23 February 1968.
70 PRO, PREM 13/2445, Palliser to Wilson, 27 February 1968.
71 PRO, PREM 13/2445, Killick to Maitland, 28 February 1968.
72 PRO, PREM 13/2158, brief on the United States for John Freeman, the Ambassador-designate, Washington, 23 July 1968.
73 PRO, FCO 7/742, AU 1/4, Dean to Gore-Booth, 1 July 1968.
74 Wilson had not been told in advance, although during their meetings in February Johnson had intimated that he was by no means certain of seeking a second term in the White House. See Wilson, The Labour Government, pp. 519–20.
75 LBJL, NSF: Country File, Box 212, UK: Cables and memos XIV 8/68–1/69, Memorandum of Conversation, 13 January 1969.
76 PRO, PREM 13/3006, Wilson to Johnson, 17 January 1969.
77 PRO, PREM 13/3007, Wilson to Nixon, 5 February 1969.
78 Wilson, The Labour Government, p. 580.
79 PRO, PREM 13/3008, Wilson’s discussions with Nixon, 24 February 1969.
80 Ibid.
81 Quoted in John Dickie, ‘Special’ No More: Anglo-American Relations, Rhetoric and Reality (London: Weidenfeld and Nicolson, 1994), p. 143.
82 Quoted in Clive Ponting, Breach of Promise: Labour in Power 1964–1970 (London: Hamish Hamilton, 1989), p. 59.

# A ‘special relationship’?

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