1 See Document 100, note 2.

2 On file AA:M100, January 1943.

3 On 21 January Bruce advised Curtin that the question of post-war
policy would be raised at the Casablanca Conference and that as
'the Prime Minister's mind is very fluid and up to date he has
resolutely declined to crystallize it' he had sent Churchill the
Note 'setting out the issues involved in the hope that this might
turn his mind towards their consideration'. Bruce also sent Curtin
a copy of the summary of his arguments (Enclosure B in his letter
to Churchill). See cablegrams 16A and 18A of 21 January on the
file cited in note 2.

ENCLOSURE [A]

[LONDON], 5 January 1943

POST-WAR PROBLEMS

The future of Colonial possessions is now on the door step and
discussions on this question are about to be opened with the
United States of America.

All the indications are also that shortly the questions of post-
war International co-operation both in the political and economic
spheres will become a very live issue. We are therefore faced with
the necessity of formulating the broad policy we should pursue.

The line we should follow appears to me to be what will best serve
our national interests. As individuals our actions can, and no
doubt should, be governed by higher motives than serving our own
individual interests and we should be prepared to make sacrifices
for the common good.

It is difficult, if not impossible, however, to frame national
policies save on the basis of material national self-interest,
owing to the power to sway public opinion which can be exercised
by the Press, sectional interests and other forces, with
consequent repercussions in the political arena.

It is therefore necessary before determining what policy we should
pursue and how far we should give a lead in promoting
International cooperation to consider what would best serve the
interests of our own peoples and what are the objectives we desire
to obtain for them after the war is over.

I suggest these objectives might be stated as:-

(a) The preservation of the integrity of the British Empire.

(b) The highest obtainable standard of economic and social well-
being for our peoples.

The question we have to decide is whether these objectives can
best be obtained by our own individual efforts or by International
co-operation.

In approaching this problem we naturally have in mind the part
that the Empire has played in the present struggle, and that when
victory is achieved we will be able to claim that we were the
principal architects of it. Had it not been for our resolute and
united refusal to accept defeat when we stood alone, after the
fall of France, Russia would have been overwhelmed and America
would have been faced with a prolonged struggle in which she might
well have gone down and from which, at best, she would only have
emerged facing a most difficult future instead of the easy path
that now appears to lie before her.

In these circumstances it is galling to contemplate that after
victory is achieved we may have to accept, if the post-war world
is to be based on International co-operation, much that may seem
repugnant to our pre-war conceptions of the relations of the
British Empire to other nations. We cannot, however, allow these
feelings to sway our judgment but must, with unprejudiced minds,
determine what policy would best serve our national interests.

In the past the integrity of the British Empire has been
maintained by our own strength and particularly by the pre-
eminence of the British Navy.

Can we preserve that integrity in the future by the same means?
To answer this question it is necessary to consider what armed
strength the Empire would require and whether we should be in a
position to maintain it.

In examining this question we can, for the immediate post-war
period, eliminate Germany, Italy and Japan from our calculations.

Whatever else is uncertain after the war the complete disarmament
of these powers is assured. There will be, however, United Nations
fully armed and strong, e.g. ourselves, the United States of
America, the U.S.S.R. and China.

The vital interests of the British Empire can be considered in
three geographical areas, namely, the Far East and Pacific; the
Middle East; and Europe.

In the Far East and Pacific, apart from the great Dominions, the
Empire's integrity and vital interests have to be safeguarded in
Burma and Malaya, while Siam, Indo-China and the Dutch East Indies
are of paramount importance to us.

We have therefore to consider what forces we should require to
safeguard these vital and paramount interests. In assessing these
needs China must be our primary consideration. It is true that in
this war China is our Ally and that in the past China has been
weak and disorganised. Can we rely upon these conditions
prevailing in the future? Have we not rather to visualise a strong
and united China with high ambitions to dominate Eastern Asia?
Does not prudence at least demand that we should contemplate such
a possibility? If it does we have to consider what armed forces we
would require, if acting in isolation, to meet such a contingency.

In view of our experiences at the hands of Japan in the present
war clearly the magnitude of such forces would be staggering. The
question we have to ask ourselves is whether we would be in a
position to provide such forces remembering that in the
circumstances leading up to the eventualities I am suggesting we
would not have American sympathy.

In the Middle East, while we have little territory, we have vital
interests, particularly in regard to communications, e.g. The Suez
Canal, and in respect to oil in Iran and Iraq.

After the war Russia will be tremendously strong. Given the
failure of International co-operation, it is possible that she may
take the line that the war was mainly won by her exertions and
sacrifices and she might then claim that she required an exit into
the Persian Gulf. If she did, this would mean complete dominance
by Russia over Iran and Iraq and their oil supplies, even if she
did not appropriate vital portions of their territories. Such
action by Russia would be so contrary to our interests that it
would be essential we should resist it.

What forces would be required effectively to do so and is there
the slightest possibility that we should be in a position to
provide them?
Difficult as the position would be in the Far East and Pacific,
and in the Middle East, our position in Europe, if in isolation
from the United States of America, would be even more precarious.

Competition between the United Kingdom and the U.S.S.R. for
leadership among the nations of Europe conjures up pictures of
competing ideologies, of the growth of communist parties in
France, Spain and even in the United Kingdom, and hence of the
need to maintain in these Islands far greater armed forces than
ever before in our history.

To maintain the integrity and vital interests of the British
Empire therefore by our own strength, as we have in the past,
would appear, in view of the considerations set out above, to
require vast forces to meet our commitments in the Far East and
Pacific; the Middle East and in Europe. It would, of course, be a
question for the Chiefs of Staff to determine what the strength of
those forces would have to be. It is clear, however, that their
magnitude would be such as to be beyond the Empire's capacity to
provide them. Even if we were able to do so their maintenance
would involve conscription on a large scale and a financial burden
which would be so great as to destroy the possibility of providing
for our peoples those economic and social standards which are our
second objective.

If consideration of the points I have outlined above leads to the
conclusion that it will be impossible in the post-war world by our
own efforts to ensure our vital objective of maintaining the
integrity of the British Empire and promoting the economic and
social well-being of out people, we have to examine how best these
objectives can be achieved by International co-operation.

In doing so it is necessary to consider the problems of security
and economic and social well-being as a whole because they are so
closely interlocked.

It is an aim common to all political parties in this country
progressively to improve the economic conditions and social
security of the people. Much progress has been made in the
planning for the attainment of these ends, an outstanding example
being the Beveridge Report. [1] It is, however, generally realised
that it will only be possible for these plans to come to fruition
if, after the war, we have an expanding world economy.

While there are some who would maintain that an expansive world
economy would not be prevented even if the United Kingdom utilised
her undoubtedly strong bargaining position to enter into bilateral
arrangements to secure markets for British trade, the now
generally accepted view is that such action by the United Kingdom
would bring about an economic position similar to that prevailing
from 1930-1938 and only by a large measure of International co-
operation can the necessary expansive world economy be achieved.

It seems therefore clear that the attainment of our aim of better
economic conditions and greater social security for our people is
dependent upon International economic co-operation. Just, however,
as this is so, so is it true that the realisation of our aim of an
expansive world economy by International co-operation is dependent
upon International security and the removal of the fear of
aggression.

Unless this is achieved the world burden of armaments cannot be
reduced and national economic policies throughout the world would
continue to be based upon the necessity of nations providing for
their own defensive requirements rather than upon economic
considerations. The above considerations show that internal
economic and social problems, International economic problems, and
security problems must be considered as a whole.

As the solution of the first two is dependent upon finding an
answer to the third, it is necessary to consider the question of
national security first.

There are two possible ways this can be provided apart from
individual nations having to ensure their own security. These two
methods are-

(a) By a group of Nations, eg. the four Great Powers, undertaking
to police the world by their national forces
When the present war ends the four Great Powers, the United
Kingdom, the United States of America, the U.S.S.R., and China,
will be very closely linked by their common sacrifices and
efforts. Can anyone, however, predict with confidence that this
close unity will continue? Can anyone ensure that all these four
nations will continue to play their part in relation to world
affairs, e.g. America, or that antagonisms and differences might
not grow up between them, e.g. the U.S.S.R. and ourselves. Unless
these things could be ensured we would surely be building upon a
foundation of sand.

Quite apart from these considerations, we have to recognise that
by undertaking to maintain the forces necessary to police the
world the nations undertaking such obligation would be
handicapping themselves economically against those nations which
were subjected to no such burden.

(b) By the establishment of an International Authority supported
by adequate force
This presents many obvious difficulties but in view of the
inevitability of the world drifting into another war after a
generation if they are not overcome, they have to be faced.

Given time I believe they can be and fortunately there is every
prospect that that time will be forthcoming. The necessary time
would be provided, as I see it, by the fact that at the end of the
present war the Powers will be available having the necessary
forces who could undertake this task. Those Powers would be the
four Great Powers-the United Kingdom, the United States of
America, the U.S.S.R., and China, and I believe it would be
possible to obtain their consent to assume this obligation. I
feel, however, that they should do so on the definite basis of a
time limit during which the plans would be perfected for the
handing over of this burden of policing the world to an
International Authority maintained by the nations as a whole.

My conclusion, therefore, is that the provision of security and
freedom from the fear of aggression can best be assured by
accepting the principle that the eventual policing of the world
must be placed in the hands of an International Authority, the
breathing space necessary for the maturing of the plans to this
end being provided by the four Great Powers undertaking the task
in the interim.

While security must be dealt with by a World Council of some kind
which would have final authority in regard to all questions likely
to endanger the peace of the world and which would also deal with
other questions of world wide importance, it is undesirable that
such a Council should be burdened with the innumerable local
questions that will arise.

It is therefore desirable that machinery should be set up at the
earliest possible date to handle such questions. As these will, in
the great majority of cases, primarily be of importance to
particular areas, the idea of Regional Councils to handle them
would appear desirable. The three main areas into which the world
might be divided and for which Regional Councils should be
established would be Europe; America; and the Far East.

While the basis of representation on Regional Councils would be
geographical there should, in addition, be representation of
countries with special interests in the area. In particular it is
most desirable that the three Great Powers-the British Empire, the
United States of America and the U.S.S.R.-should all be members of
the three Regional Councils I have suggested above.

While the areas of Europe, America and the Far East embrace the
greater part of the globe, consideration would have to be given as
to how Africa, the Middle East and India could be fitted into the
picture. Consideration would also have to be given to a suggestion
that has been put forward that the British Empire and the Soviet
Union should also constitute Regional Groups.

The problems associated with the establishment of Regional
Councils for Europe, America and the Far East vary in complexity.

In regard to America the position is relatively simple. There is
already in existence the Pan-American Union, and this could be
used as the basis for a Regional Council. In the Far East there
would be a greater problem, but provided that some understanding
has been reached as to post-war colonial policy, no great
difficulty or delay should be experienced in the setting up of a
Regional Council for this area.

Europe will present the most difficult problem and it has to be
recognised that it will take longer to bring the Regional idea
into operation in this area than in other parts of the world.

After the war there will clearly have to be a joint occupation of
Germany for a considerable time by the three major Allies.

This military occupation, combined with the work of the relief and
reconstruction organisations which will be operating in Europe,
will constitute a large scale experiment in European International
Administration. This experiment, particularly if the present trend
among the smaller Powers towards greater co-operation up to the
point of Confederations continues, may well lead to political and
economic co-operation in Europe on a scale never previously seen.

Such co-operation would pave the way for the establishment and
successful operation of a Regional Council of Europe.

While security and political questions are of prime importance it
is equally essential to provide machinery to deal with economic
and social problems. After some hesitations here-and a careful
weighing of the alternatives it is now generally accepted that
only by International co-operation can the expansion of world
trade necessary for the realisation of our economic and social
hopes be brought about. This conviction has led to the formulation
of the schemes for an 'International Clearing Union' and 'Buffer
Stocks'.

Many other problems are under consideration, the most outstanding
of which deal with Food, Agriculture, Transport and
Communications. All these activities, however, require
coordinating. I suggest the best method of achieving this would be
the creation of a Reconstruction Authority with a constitution
similar to that contemplated for the Relief Authority. Such
Authority could utilise existing Organisations such as the
International Labour Office and the Social and Economic Sections
of the League of Nations to supplement the machinery it would
itself create.

Action down the lines I suggest would prepare the way for that
full International co-operation on economic and social questions
which will be essential after the war.

It is necessary that we should determine our policy with regard to
all the matters dealt with above at the earliest possible date.

Having decided upon our policy we should then approach the United
States and discuss it with them in the fullest and frankest
manner. [2]

[AA:M100, JANUARY 1943]

1 Published in November 1942, this report by Sir William Beveridge
laid the foundations for social and economic welfare programs.

2 On 9 March Churchill sent the following reply to Bruce's letter:

'I am sorry not to have answered your letter of January 13 before.

It reached me while I was abroad and I have only now had time to
go through it carefully.

I agree generally with much of what you say in your paper, and, as
you know, all these suggestions are being considered already by
those charged with the important task of post war organisation.

Every effort is being made to face the difficulties involved, but
a final solution of them must of course stand over until our
primary task of winning the war is completed, and until we see
clearly the state of the world at that time.' The original is on
file AA:M100, March 1943.