The currency of power: Anglo-American economic diplomacy and the making of British foreign policy, 1964--1968

This thesis examines the economic diplomacy between Britain and the United States in the period from 1964 to 1968. It investigates how British economic weakness and the instability of the pound gave the United States an opportunity to use financial aid to impress its Cold War agenda for Britain's world role. This discussion refutes entirely the orthodox interpretation of relations between America and the United Kingdom, exemplified by Clive Ponting's Breach of Promise.; The culmination of the sustained economic instability was the devaluation of sterling in November 1967 and its politico-military ramifications, as Harold Wilson's government decided to withdraw all military forces from East of Suez in January 1968. However, interdependence between America and Britain meant that the fragility of the United Kingdom and its currency decisively contributed to US problems in March 1968. In that month, the gold crisis undermined the dollar, and this affected America's strategy in the Vietnam war. President Lyndon Johnson's March 31 speech marked the culmination of these problems.; Interaction between the Wilson government and the Johnson administration over a wide variety of issues preceded the events at the end of 1967 and the beginning of 1968. The two leaders' political styles and personalities shaped the relationship between the two countries as early as their first meeting, which focused on the Multilateral Nuclear Force (MLF) and British economic problems. The latter subject continued to interest American officials throughout the four years in question. Two crises, the Vietnam war and Rhodesia with its Unilateral Declaration of Independence (UDI), created further pressures for the governments. These episodes also exacerbated worries over Britain's defense reviews of 1966. By that year, the issue of Europe increasingly dominated British foreign policy and American attempts to influence British leaders. In particular, policymakers worried about membership of the European Economic Community (EEC) and the offset agreements with West Germany. Ultimately, all of these subjects played a role in the economic crises of November 1967 and March1968 that shaped momentous American and British decisions on their diplomacy and defense policy.