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Anglo-American Relations in South America During the Second World War and Post- War Economic Planning

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Anglo-American Relations in South America During the Second World War and Post- War Economic Planning ANGLO-AMERICAN RELATIONS IN SOUTH AMERICA DURING THE SECOND WORLD WAR AND POST- WAR ECONOMIC PLANNING A thesis submitted for the degree of Doctor of Philosophy by Thomas C. Mills Department of Politics and History, Brunel University September 2009 ii Abstract This thesis examines relations between the United States and Great Britain in South America between 1939 and 1945. It does so in the broader context of the economic planning for the post-war world undertaken by the US and Britain during the Second World War. Traditional interpretations of Anglo-American post-war economic planning have tended to focus on a process whereby the Franklin D. Roosevelt administration advocated a multilateral system, based on equality of access to markets and raw materials. Doubting Britain’s ability to compete successfully in such a system, the British government baulked at the US proposal and clung to its autarkic structures constructed during the interwar years. This thesis argues that relations between the US and Britain in South America followed a different and more complex pattern. In this region it was in fact Britain that eventually took the lead in advocating multilateralism. This policy was adopted following a lengthy evaluation of British policy in Latin America, which concluded that multilateralism represented the surest means of protecting British interests in South America. The US, on the other hand, demonstrated exclusionary tendencies in its policy toward Latin America, which threatened the successful implementation of a global economic system based on multilateralism. In explaining this divergence from multilateralism in the Roosevelt administration’s post-war economic planning, this thesis pays particular attention to the influence of different factions, both within the administration and in the broader US political and business establishment. By exploring Anglo-American relations in this previously neglected region, this thesis contributes toward a greater understanding of the broader process of post-war economic planning that took place between the US and Britain during the Second World War. iii Contents List of Abbreviations iv Acknowledgements v Author’s Declaration vi Chapter 1. Anglo-American Post-War Economic Planning: A New Perspective 7 Chapter 2. US Criticisms and British Mollification 34 Chapter 3. British Suspicions and Attempts at Cooperation 66 Chapter 4. Challenges to Multilateralism and the Return of British Suspicions 102 Chapter 5. The Quest for a Self-Denying Ordinance 133 Chapter 6. Conclusion 169 Bibliography 180 iv List of Abbreviations The full name is given on first reference, abbreviations thereafter. They are all listed together here for convenience. BEW Board of Economic Warfare CIAA Office of the Coordinator for Inter-American Affairs FBI Federal Bureau of Investigation FEA Foreign Economic Administration IACHC Inter-departmental Advisory Committee on Hemispheric Communications IADC Inter-American Development Commission ITT International Telephone & Telegraph MEW Ministry of Economic Warfare OLLA Office of Lend-Lease Administration USCC United States Commercial Company WPB War Production Board Abbreviations in source references CAC Churchill Archive Centre CFR Council on Foreign Relations CUL Cambridge University Library DAFR Documents on American Foreign Relations FDRL Franklin D. Roosevelt Library FRUS Foreign Relations of the United States LSE London School of Economics and Political Science MOD Ministry of Defence NARA United States National Archives and Records Administration OARA Office of American Republic Affairs OIIA Office of Inter-American Affairs RAC Rockefeller Archive Center RFA Rockefeller Family Archives RSC Roosevelt Study Center TNA The National Archives of the United Kingdom v Acknowledgements Completing a PhD, particularly one involving research on both sides of the Atlantic, is rarely possible without the support of many institutions and individuals. I am grateful to Brunel University for awarding me a 3-year studentship to undertake this project. Research trips to the US were only made possible by generous grants from the Centre for American, Transatlantic and Caribbean History in the Politics and History Department at Brunel; the European Association of American Studies; and the British International Studies Association. Funding was also gratefully received from the Roosevelt Study Center in Middelburg, where a productive research trip was made all the more enjoyable by the organisational skills of Leontien Joosse. A good many archivists have aided my research throughout this project. In particular, I am grateful for the efforts of Hans Krabbendam at the Roosevelt Study Center; and the archival staff at Cambridge University Library; the Franklin D. Roosevelt Library; the Rockefeller Archive Center; the Library of Congress; the Seeley G. Mudd Library of Princeton University; the Butler Library of Columbia University; the Robertson Library of the London School of Economics and Political Science; the Churchill Archive Centre; and the National Archives, in both Britain and the US. I have had the good fortune throughout the course of researching and writing my PhD to meet and often befriend many other historians working in similar research areas to my own. Several of these individuals have greatly aided the progress of this thesis by reading various drafts of different sections of it, and offering more general encouragement and advice. For their time and effort I am grateful to Bevan Sewell, Jason Colby, Jeffrey Engel, Marco Mariano, Spencer Mawby, Tony McCulloch, J. Simon Rofe, and Charlie Whitham. Staff in the Politics and History Department at Brunel have offered similar guidance. In particular, I am grateful to Jay Kleinberg, Kenneth Morgan, Niall Palmer, and Ian Thatcher. My research supervisor, Martin Folly, has aided the completion of this thesis immensely by offering advice and guidance with unswerving enthusiasm and good humour. I have similarly been incredibly lucky to be able to depend upon the support and benevolence of my family and friends throughout the process of completing this PhD. In particular, I am grateful for the various ways in which completion of this project has been aided by my parents, Colin and Sally Mills; my grandparents, Jim and Anne Rostron; and my brother, Simon Mills. Finally, completion of this PhD would not have been possible without the support of my fiancée, Anna Clague. She has witnessed its development from the closest quarters and has provided inspiration and encouragement throughout. For doing this with unceasing patience and love, I am deeply grateful. vi Author’s Declaration Sections of this thesis have previously been published in the following article: Thomas C. Mills “Anglo-American Economic Diplomacy During the Second World War and the Electrification of the Central Brazilian Railway”, Diplomacy and Statecraft , vol.20, no.1 (2009), pp.69-85. 7 Chapter 1 Anglo-American Post-War Economic Planning: A New Perspective A major subplot to the alliance between the United States and Great Britain during the Second World War was the ongoing diplomacy concerning the economic shape of the post-war world. Negotiations took place both at the highest levels of government over the general principles that would shape the post-war global economy and throughout the lower rungs of governmental bureaucracy concerning specific geographic regions in which both countries had significant economic interests. Inevitably, Anglo-American post-war economic planning took place within the broader context of the changing balance of power between the two countries during the Second World War. A widespread assumption among US officials, and in the country’s business and political establishment more generally, was that the end of the war would see the US emerge as the leading international economic power. 1 In this context it was the Franklin D. Roosevelt administration that shaped the general contours of post-war economic planning and took the lead in seeking to implement these plans. The underlying reality for British officials during the war, on the other hand, was dependence on the US for aid and, during the latter part of the war, for manpower and resources. 2 This meant that while British officials were by no means passive spectators to the process of post-war economic planning, they did have to undertake this task with constant reference to the ambitions of their wartime ally. 3 But while the Second World War may have stacked the balance of power in favour of the US, Britain remained a prominent international power. In particular, the country still controlled large swathes of the world’s trade by the time of the war. Anglo-American relations were therefore central to the Roosevelt administration’s economic plans for the post-war world. 4 1 Stephen E. Ambrose and Douglas Brinkley, Rise to Globalism: American Foreign Policy since 1938 , 8th edition (New York: Penguin Books, 1997), p.xii; Paul Kennedy, The Rise and Fall of Great Powers: Economic Change and Military Conflict from 1500 to 2000 (London: Fontana Press, 1988), pp.459-465, 484. 2 Keith Sainsbury, Churchill and Roosevelt at War , 2 nd edition (Basingstoke: Macmillan, 1996), pp.10- 11. 3 Michael F. Hopkins, Oliver Franks and the Truman Administration: Anglo-American Relations, 1948-1952 (London: Frank Cass, 2003), p.5. 4 Gabriel Kolko, The Politics of War: Allied Diplomacy and the Crisis of 1943-1945 (London: Weidenfeld & Nicolson, 1968), p.280; Randall B. Woods, “FDR and the New Economic Order”
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