Empire Lost - Andrew Stewart [61]
There was lingering resentment about the Ottawa agreements and the resulting system of Imperial Preference which continued to exclude American products from Australian and New Zealand markets and annoyed many in Washington. There were also the American claims that had been made on a number of islands in the Pacific under British and New Zealand jurisdiction.17
Chamberlain himself was wary of the cost of American support, writing to his sister in January 1940, 'heaven knows I don't want the Americans to fight for us—we should have to pay too dearly for that if they had a right to be in on the peace terms—but if they are so sympathetic they might at least refrain from hampering our efforts and comforting our foes'.18
Trading practices caused a great deal of anxiety in these early wartime months and Lothian was largely responsible for helping to smooth over problems as they emerged. Indeed it has been reiterated only recently the degree to which he was 'the nexus of the Anglo-American relationship' proscribing better understanding between the two countries, the FO's response being based largely on his informed judgements.19 Continuing British efforts to wage economic warfare against Germany—which entailed a reduction in purchases of some American goods and the introduction of a blockade—engendered a good deal of enmity in Washington.20 The British financial position was, in fact, certainly at this stage, the critical issue of the war. Even before the first German troops had crossed into Poland the situation facing the British Exchequer was dire. The pressure placed on the pound during 1939 alone reduced Britain's war chest of gold and foreign securities by at least one-quarter.21 The undertaking of a rapid rearmament programme begun after the Munich settlement had placed further strains on resources, and the situation was only likely to get worse.22 And as an internal memorandum prepared by the Treasury had concluded two months before the war's eventual start, unless the United States was prepared either to lend or give money as required, the prospects for a long war were 'exceedingly grim'.23
The State Department had envisaged that Hitler would follow his rapid destruction of Poland with an equally devastating assault on the Western Front and an inevitable defeat of the Allies. The opposite happened, and the 'Phoney War' helped ensure that there remained virtually no enthusiasm among the American public, and therefore its politicians, for any action beyond selling arms and equipment to those countries which might want them. The Sumner Welles mission came and went with little to be said for it other than the State Department representative formed a strong aversion to Churchill, whom he later told Roosevelt he believed to have been drunk throughout their two hour meeting; much the same tale was given by the American Ambassador in London, Joseph Kennedy.24 There remained little chance of any direct intervention from the United States, at least until the November 1940 presidential elections had been decided. Indeed Lothian's reports, condemned as anti-imperialist by the colonial secretary in London, talked of pessimism and a growing lack of belief that Britain and its Empire could prevail.25
At the end of February 1940 Lothian posed an interesting question to Halifax: was the British government contemplating a re-summoning of the old Imperial War Cabinet? He believed that 'the more the Empire aspect of the war