The Anglo-American Mutual Aid Agreement Viewed through Keynes as a Negotiator, March 2019 Toshiaki Hirai (Sophia University, Tokyo)

The Anglo-American Mutual Aid Agreement Viewed through Keynes as a Negotiator

Toshiaki Hirai

Doshisha Shogaku (The Doshisha Business Review)

volume 70

number 6

page range 627-652

year 2019-03-15

Abstract

The main purpose of this paper is to examine the process of negotiation of the mutual aid

agreement between the UK and the US during the years 19411943, and to clarify what sort

of stance Keynes took as a representative of the UK throughout it.

Firstly, we explain the Lend Lease Act (March 1941), and proceed to see how, after the

Act, the UK came to conclude the AngloAmerican Mutual Aid Agreement with the US

(February 1942) through complicated negotiations. We then assess Keynes’s fundamental

stance, recognizable throughout these negotiations. This problem differs markedly in nature

from the problem of the postwar international monetary system. The problem here was how

to procure resources from the US amidst the financially and militarily dire situation-quite

different from the atmosphere in which proposals for the future could be discussed.

Relations between the UK and the US were basically cooperative, and yet clashes often

occurred due to geopolitical interests. Among other things, the UK took for granted the

maintenance of the Sterling Bloc as symbol of the British Empire, so that even if the UK got

aid from the US, it aimed at a financial agreement which should as far as possible not

interfere with the Bloc.

The fundamental line which Keynes took in the negotiation runs thus : The UK should

always endeavour to keep resources at her own disposal. It is essential that the UK be ready

to preserve its independence by being able to use its own resources at any time when

necessary. Keynes himself took maintenance of the Sterling Bloc for granted.

Economics