329 Nimmo to Department of the Treasury

Cablegram 827 (extract), LONDON, 11 March 1948, 1.45 p.m.

IMMEDIATE SECRET

Bevin's talk yesterday to the High Commissioners on the organisation and functions of the Continuing Committee for European Co-operation followed closely argument of telegram 78 9th March from Commonwealth Relations Office. In effect he said:-

'1. Britain is extremely short of dollars and will remain so for some time. We must earn dollars and save dollars.

2. In order to obtain dollars we must if practicable foster close economic co-operation between the sixteen free European nations and make free Europe as independent as possible of Western hemisphere.

3. We propose to throw our weight into European co-operation in order to increase production to free trade and may be to establish a new financial basis (meaning obviously a separate currency area).

4. We must however tell these nations that we are already members of a commonwealth and we won't agree to any action which might threaten the British Commonwealth.

5. We tell High Commissioners now that membership of this new club (Bevin's word) will entail collective responsibility and we may not always be able to consult you before we agree to alter the rules of this club.

6. This new club is most important to us and indeed to whole sterling area. Someone must start the club and Britain is prepared to do that. This action is urgent to preserve freedom in Europe.

7. We do however want your candid opinions - not on the idea of formation of this [club][1] - but to suggest to us whether your interests are affected. We want you to know the problem and Europe's answer.'

[1] Corrected from the London copy.

[AA : A1838, 81/3/1/2, I]