Anglo-American loan

The Anglo-American Loan Agreement[1] was a post World War II loan made to the United Kingdom by the United States on 15 July 1946, and paid off in 2006.[2] The loan was negotiated by John Maynard Keynes. The loan was for $3.75 billion (US$57 billion in 2015) at a low 2% interest rate; Canada loaned an additional US$1.19 billion.

Signature Anglo American loan agreement 1945
Signature of the loan. Bottom row from left: economist John Maynard Keynes, leader of the British negotiators; Lord Halifax, British Ambassador to the USA; James F. Byrnes, United States Secretary of State; and Fred M. Vinson, United States Secretary of the Treasury. Future US Secretary of State Dean Acheson stands third from right in the back row.

Background

The loan was made primarily to support British overseas expenditure in the immediate post-war years and not to implement the Labour government's welfare reforms. British treasury officials believed they could implement the Labour government's domestic reforms without the loan if Britain withdrew from all major overseas commitments.[3]

At the start of the war, Britain had spent the money that they did have in normal payments for materiel under the "US cash-and-carry" scheme. Basing rights were also traded for equipment, e.g., the Destroyers for Bases Agreement, but by 1941 Britain was no longer able to finance cash payments and Lend-Lease was introduced. Lend Lease aid did not have to be paid back, but the other loans did.

Large quantities of goods were in Britain or in transit when Washington suddenly and unexpectedly terminated Lend-Lease on 21 August 1945. The British economy had been heavily geared towards war production (around 55% GDP) and had drastically reduced its exports. The UK therefore relied on Lend-Lease imports to obtain essential consumer commodities such as food while it could no longer afford to pay for these items using export profits. The end of lend-lease thus came as a great economic shock. Britain needed to retain some of this equipment in the immediate post war period. As a result, the Anglo-American loan came about. Lend-lease items retained were sold to Britain at the knockdown price of about 10 cents on the dollar giving an initial value of £1.075 billion.[4]

Agreement

Terms

John Maynard Keynes, then in poor health and shortly before his death, was sent by the United Kingdom to the United States and Canada to obtain more funds.[5] British politicians expected that in view of the United Kingdom's contribution to the war effort, especially for the lives lost before the United States entered the fight in 1941, America would offer favorable terms. Instead of a grant or a gift, however, Keynes was offered a loan on favorable terms.

Historian Alan Sked has commented that, "the U.S. didn't seem to realize that Britain was bankrupt", and that the loan was "denounced in the House of Lords, but in the end the country had no choice."[6] America offered $US 3.75bn (US$52 billion in 2019) and Canada contributed another US$1.19 bn (US$17 billion in 2019), both at the rate of 2% annual interest.[7] The total amount repaid, including interest, was $7.5bn (£3.8bn) to the US and US$2bn (£1bn) to Canada.[8][9]

The loan was made subject to conditions, the most damaging of which was the convertibility of sterling.[10] Though not the intention, the effect of convertibility was to worsen British post-war economic problems. International sterling balances became convertible one year after the loan was ratified, on 15 July 1947. Within a month, nations with sterling balances (e.g. pounds which they had earned from buying British exports, and which they were now permitted to sell to Britain in exchange for dollars) had drawn almost a billion dollars from British dollar reserves, forcing the British government to suspend convertibility and to begin immediate drastic cuts in domestic and overseas expenditure. The rapid loss of dollar reserves also highlighted the weakness of sterling, which was duly devalued in 1949 from $4.02 to $2.80.[11]

In later years, the term of 2% interest was rather less than the prevailing market interest rates, resulting in it being described as a "very advantageous loan" by members of the British government, as elaborated below.

Loan spending

Much of the loan had been earmarked for foreign military spending to maintain the United Kingdom's empire and payments to British allies prior to its passage, which had been concealed in negotiations through to the summer of 1946.[12] Keynes had noted that a failure to pass the loan agreement would cause Britain to abandon its military outposts in the Middle Eastern, Asian and Mediterranean regions, as the alternative of reducing British standards of living was politically unfeasible.[13]

Repayment

The last payment was made on 29 December 2006 for the sum of about $83m (£45.5m), the 29th being the last working day of the year.[2][4][14] The final payment was actually six years late, the British Government having suspended payments due in the years 1956, 1957, 1964, 1965, 1968 and 1976 because the exchange rates were seen as impractical.[15] After this final payment Britain's Economic Secretary to the Treasury, Ed Balls, formally thanked the US for its wartime support.[16]

In television

Sir Christopher Meyer presented a history of the loan and its effects in the BBC series Mortgaged to the Yanks.

See also

References

  1. ^ BBC 2005
  2. ^ a b "What's a little debt between friends?". BBC News. 10 May 2006. Retrieved 20 November 2008.
  3. ^ Richard Clarke, Anglo-American Collaboration in War and Peace, 1942-1949 (Oxford, Clarendon Press, 1982).
  4. ^ a b Rohrer 2006
  5. ^ Robert Skidelsky, John Maynard Keynes. Vol. 3: Fighting for Freedom, 1937-1946 (2001) pp 403-58
  6. ^ International Herald Tribune 2006
  7. ^ Philip A. Grant Jr., "President Harry S. Truman and the British Loan Act of 1946," Presidential Studies Quarterly, (Summer 1995) 25#3 pp 489-96
  8. ^ McIntyre, W. David (1998). British Decolonisation, 1946-1997. Macmillan Press Ltd. p. 83. ISBN 0-333-69331-0.
  9. ^ Kindleberger 2006, p. 415
  10. ^ Rosenson 1947
  11. ^ Documentary evidence can be found at www.nationalarchives.gov.uk/cabinetpapers, see CAB128/10. For a good account of the convertibility crisis, see Alec Cairncross, Years of Recovery: British Economic Policy, 1945-1951, (London, 1985), pp.121-164.
  12. ^ Randall Bennett Woods (1990). A Changing of the Guard: Anglo-American Relations, 1941-1946. p. 374.
  13. ^ Woods, p 375
  14. ^ Epstein 2007
  15. ^ Thornton 2006
  16. ^ "Britain pays off final instalment of US loan - after 61 years". The Independent. 2006-12-29. Retrieved 2018-02-16.

Further reading

  • Block, Fred (1977). The Origins of International Economic Disorder. Berkeley, Calif.: University of California Press. pp. 32–69. ISBN 0520037294.
  • Callaway, Darden. "The Anglo-American Loan of 1946: US Economic Opportunism and the Start of the Cold War." (Davidson College thesis, 2014). online, with detailed bibliography and links
  • Clarke, Richard William Barnes (Sir.); Alec Cairncross (1982). Anglo-American economic collaboration in war and peace, 1942-1949 (1982 ed.). Clarendon Press. ISBN 978-0-19-828439-0. - Total pages: 215
  • Grant Jr., Philip A. "President Harry S. Truman and the British Loan Act of 1946," Presidential Studies Quarterly, (Summer 1995) 25#3 pp 489–96
  • Kindleberger, Charles P. (2006). A Financial History of Western Europe (2006 ed.). Taylor & Francis. ISBN 978-0-415-37867-3. - Total pages: 525
  • Rosenson, Alex (March 1947). "The Terms of the Anglo-American Financial Agreement". The American Economic Review. American Economic Association. 37 (1): 178–187. JSTOR 1802868.
  • Skidelsky, Robert. John Maynard Keynes. Vol. 3: Fighting for Freedom, 1937-1946 (2001) pp 403–58
  • Wevill, Richard. Britain and America after World War II: Bilateral Relations and the Beginnings of the Cold War (I.B. Tauris, 2012)

Primary sources

  • The Collected Writings of John Maynard Keynes, Volumes 24 (London: Macmillan Press, 1979)
Newspaper accounts of payoff

External links

1945 in the United Kingdom

Events from the year 1945 in the United Kingdom. This year sees the end of World War II and a landslide general election victory for the Labour Party.

2006

2006 (MMVI)

was a common year starting on Sunday of the Gregorian calendar, the 2006th year of the Common Era (CE) and Anno Domini (AD) designations, the 6th year of the 3rd millennium, the 6th year of the 21st century, and the 7th year of the 2000s decade.

2006 was designated as:

International Year of Deserts and Desertification

International Asperger's Year

2006 in the United Kingdom

Events from the year 2006 in the United Kingdom.

Aftermath of World War II

The Aftermath of World War II was the beginning of an era defined by the decline of all European colonial empires and simultaneous rise of two superpowers: the Soviet Union (USSR) and the United States (US). Allies during World War II, the US and the USSR became competitors on the world stage and engaged in the Cold War, so called because it never resulted in overt, declared hot war between the two powers but was instead characterized by espionage, political subversion and proxy wars. Western Europe and Japan were rebuilt through the American Marshall Plan whereas Central and Eastern Europe fell under the Soviet sphere of influence and eventually behind an "Iron Curtain". Europe was divided into a US-led Western Bloc and a Soviet-led Eastern Bloc. Internationally, alliances with the two blocs gradually shifted, with some nations trying to stay out of the Cold War through the Non-Aligned Movement. The War also saw a nuclear arms race between the two superpowers; part of the reason that the Cold War never became a "hot" war was that the Soviet Union and the United States had nuclear deterrents against each other, leading to a mutually assured destruction standoff.

As a consequence of the war, the Allies created the United Nations, an organization for international cooperation and diplomacy, similar to the League of Nations. Members of the United Nations agreed to outlaw wars of aggression in an attempt to avoid a third world war. The devastated great powers of Western Europe formed the European Coal and Steel Community, which later evolved into the European Economic Community and ultimately into the current European Union. This effort primarily began as an attempt to avoid another war between Germany and France by economic cooperation and integration, and a common market for important natural resources.

The end of the war also increased the rate of decolonization from the great powers with independence being granted to India (from the United Kingdom), Indonesia (from the Netherlands), the Philippines (from the US) and a number of Arab nations, primarily from specific rights which had been granted to great powers from League of Nations Mandates in the post World War I-era but often having existed de facto well before this time. Independence for the nations of Sub-Saharan Africa came more slowly.

The aftermath of World War II also saw the rise of communist influence in Southeast Asia, with the People's Republic of China, as the Chinese Communist Party emerged victorious from the Chinese Civil War in 1949.

Beverley Baxter

Sir Arthur Beverley Baxter, FRSL (8 January 1891 – 26 April 1964) was a Canadian-born journalist and politician. He spent most of his career in the United Kingdom working for the Daily Express and as a theatre critic for the London Evening Standard, and was a Member of Parliament (MP) for the Conservative Party from 1935 until his death.

Brian Robertson, 1st Baron Robertson of Oakridge

General Brian Hubert Robertson, 1st Baron Robertson of Oakridge, (22 July 1896 – 29 April 1974) was a senior British Army officer during the Second World War, who played an important role in the East African, North African and Italian Campaigns. After the war he was the Deputy Military Governor of Germany from 1945 to 1948, and then the Military Governor from 1948 to 1949.

The son of Field Marshal Sir William Robertson, he was educated at Charterhouse and the Royal Military Academy, Woolwich. He was commissioned as a second lieutenant in the Royal Engineers in November 1914, and served on the Western Front and Italian Front during the First World War. He was awarded a Military Cross in 1918 and the Distinguished Service Order in 1919. After the war he served with the Bengal Sappers and Miners from 1920 to 1925 and took part in the Waziristan expedition of 1923 to 1924. Following his father's death in February 1933, he succeeded him in his baronetcy. He retired from the Army in early 1934 to become the managing director of Dunlop Rubber in South Africa.

With the outbreak of the Second World War, Robertson re-entered military service in 1940 as a lieutenant colonel in the South African Army. He served in East and North Africa, and Italy until the end of the war, notably as Harold Alexander's Chief Administrative Officer in Italy. He was promoted to brigadier by 1942 with the temporary rank of major general from 1944 to 1945. Field Marshal Bernard Montgomery considered Robertson the best chief of administration in the British Army.

Robertson was restored to the Active List in October 1945 as a substantive major general, becoming a lieutenant general in 1946 and full general in 1947. He was Commander-in-Chief of Middle East Land Forces from 1950 to 1953, when he retired from military service for the second time to become Chairman of the British Transport Commission, a post he held until 1961. That year he was raised to the peerage as Baron Robertson of Oakridge, of Oakridge in the County of Gloucester.

Clement Attlee

Clement Richard Attlee, 1st Earl Attlee, (3 January 1883 – 8 October 1967) was a British statesman and Labour Party politician who served as Prime Minister of the United Kingdom from 1945 to 1951.

He was the Leader of the Labour Party from 1935 to 1955. In 1940, Attlee took Labour into the wartime coalition government and served under Winston Churchill, becoming, in 1942, the first person to hold the office of Deputy Prime Minister of the United Kingdom. He went on to lead the Labour Party to an unexpected landslide victory at the 1945 general election; forming the first Labour majority government, and a mandate to implement its postwar reforms. The 12 per cent national swing from the Conservatives to Labour was unprecedented at that time and remains the largest ever achieved by any party at a general election in British electoral history. He was re-elected with a narrow majority at the 1950 general election. In the following year, Attlee called a snap general election, hoping to increase his parliamentary majority. However, he was narrowly defeated by the Conservatives under the leadership of Winston Churchill, despite winning the most votes of any political party in any general election in British political history until the Conservative Party's fourth consecutive victory in 1992. Attlee remains the longest-ever serving Leader of the Labour Party.

First elected to the House of Commons in 1922 as the MP for Limehouse, Attlee rose quickly to become a junior minister in the first Labour minority government led by Ramsay MacDonald in 1924, and then joined the Cabinet during MacDonald's second ministry of 1929–1931. One of only a handful of Labour frontbenchers to retain his seat in the landslide defeat of 1931, he became the party's Deputy Leader. After the resignation of George Lansbury in 1935, he was elected as Leader of the Labour Party and Leader of the Opposition in the subsequent leadership election. At first advocating pacificism and opposing rearmament, he later reversed his position; by 1938, he became a strong critic of Neville Chamberlain's attempts to appease Adolf Hitler and Benito Mussolini. He took Labour into the Churchill war ministry in 1940. Initially serving as Lord Privy Seal, he was appointed as Deputy Prime Minister in 1942. Attlee and Churchill worked together very smoothly, with Attlee working backstage to handle much of the detail and organisational work in Parliament, as Churchill took centre stage with his attention on diplomacy, military policy, and broader issues. With victory in Europe in May 1945, the coalition government was dissolved. Attlee led Labour to win a huge majority in the ensuing 1945 general election two months later.

The government he led built the post-war consensus, based upon the assumption that full employment would be maintained by Keynesian policies and that a greatly enlarged system of social services would be created – aspirations that had been outlined in the 1942 Beveridge Report. Within this context, his government undertook the nationalisation of public utilities and major industries, as well as the creation of the National Health Service. Attlee himself had little interest in economic matters but this settlement was broadly accepted by all parties for three decades. Foreign policy was the special domain of Ernest Bevin, but Attlee took special interest in India. He supervised the process by which India was partitioned into India and Pakistan in 1947. He also arranged the independence of Burma (Myanmar), and Ceylon (Sri Lanka). His government ended the British Mandates of Palestine and Jordan. From 1947 onwards, he and Bevin pushed the United States to take a more vigorous role in the emerging Cold War against Soviet Communism. When the budgetary crisis forced Britain out of Greece in 1947, he called on Washington to counter the Communists with the Truman Doctrine. He avidly supported the Marshall Plan to rebuild Western Europe with American money. In 1949, he promoted the NATO military alliance against the Soviet bloc. He sent British troops to fight in the Malayan Emergency in 1948 and sent the RAF to participate in the Berlin Airlift. He commissioned an independent nuclear deterrent for the UK. He used 13,000 troops and passed special legislation to promptly end the London dock strike in 1949. After leading Labour to a narrow victory at the 1950 general election, he sent British troops to fight in the Korean War. Attlee was narrowly defeated by the Conservatives under Churchill in the 1951 general election. He continued as Labour leader but had lost his effectiveness by then. He retired after losing the 1955 general election and was elevated to the House of Lords.

In public, Attlee was modest and unassuming; he was ineffective at public relations and lacked charisma. His strengths emerged behind the scenes, especially in committees where his depth of knowledge, quiet demeanour, objectivity, and pragmatism proved decisive. His achievements in politics owed much to lucky breaks and the unsuitability of his rivals. He saw himself as spokesman on behalf of his entire party and successfully kept its multiple factions in harness. Attlee is consistently rated by scholars, critics and the public as one of the greatest British Prime Ministers. His reputation among scholars in recent decades has been much higher than during his years as Prime Minister, thanks to his roles in leading the Labour Party, creating the welfare state and building the coalition opposing Stalin in the Cold War.

December 29

December 29 is the 363rd day of the year (364th in leap years) in the Gregorian calendar. There are two days remaining until the end of the year.

Edward Wood, 1st Earl of Halifax

Edward Frederick Lindley Wood, 1st Earl of Halifax, (16 April 1881 – 23 December 1959), styled Lord Irwin from 1925 until 1934 and Viscount Halifax from 1934 until 1944, was one of the most senior British Conservative politicians of the 1930s. He held several senior ministerial posts during this time, most notably those of Viceroy of India from 1925 to 1931 and of Foreign Secretary between 1938 and 1940. He was one of the architects of the policy of appeasement of Adolf Hitler in 1936–38, working closely with Prime Minister Neville Chamberlain. However, after the German occupation of Czechoslovakia in March 1939 he was one of those who pushed for a new policy of attempting to deter further German aggression by promising to go to war to defend the Second Polish Republic.

On Chamberlain's resignation early in May 1940, Halifax declined the position of Prime Minister as he felt that Churchill would be a more suitable war leader (his membership in the House of Lords was given as the official reason). A few weeks later, with the Allies facing apparently catastrophic defeat and British forces falling back to Dunkirk, Halifax favoured approaching the Kingdom of Italy to see if acceptable peace terms could be negotiated. He was overruled by Churchill after a series of stormy meetings of the War Cabinet. From 1941 to 1946, he served as British Ambassador in Washington.

Fred M. Vinson

Frederick "Fred" Moore Vinson (January 22, 1890 – September 8, 1953) was an American Democratic politician who served the United States in all three branches of government. The most prominent member of the Vinson political family, he was the 53rd United States Secretary of the Treasury and the 13th Chief Justice of the United States.

Born in Louisa, Kentucky, he pursued a legal career and served in the United States Army during World War I. After the war, he served as the Commonwealth's Attorney for the Thirty-Second Judicial District of Kentucky before winning election to the United States House of Representatives in 1924. He lost re-election in 1928 but regained his seat in 1930 and served in Congress until 1937. During his time in Congress, he became an adviser and confidante of Missouri Senator Harry S. Truman. In 1937, President Franklin D. Roosevelt appointed Vinson to the United States Court of Appeals for the District of Columbia. Vinson resigned from the appellate court in 1943, when he became the Director of the Office of Economic Stabilization. After Truman acceded to the presidency following Roosevelt's death in 1945, Truman appointed Vinson to the position of Secretary of the Treasury. Vinson negotiated the payment of the Anglo-American loan and presided over the establishment of numerous post-war organizations, including the International Bank for Reconstruction and Development and the International Monetary Fund.

After the death of Chief Justice Harlan F. Stone in 1946, Truman appointed Vinson to the Supreme Court. As of 2019 Vinson is the last Chief Justice nominee nominated by a president from the Democratic Party to be confirmed. Vinson dissented in the case of Youngstown Sheet & Tube Co. v. Sawyer, which ruled against the Truman administration's control of the nation's steel mills during a strike. He ordered a rehearing of the Briggs v. Elliott case, which was eventually combined into the case known as Brown v. Board of Education. Vinson unexpectedly died of a heart attack in 1953.

History of Western civilization

Western civilization traces its roots back to Europe and the Mediterranean. It is linked to the Roman Empire and with Medieval Western Christendom which emerged from the Middle Ages to experience such transformative episodes as the Renaissance, the Reformation, the Enlightenment, the Industrial Revolution, scientific revolution, and the development of liberal democracy. The civilizations of Classical Greece and Ancient Rome are considered seminal periods in Western history; a few cultural contributions also emerged from the pagan peoples of pre-Christian Europe, such as the Celts and Germans, as well as some significant religious contributions derived from Judaism and Hellenistic Judaism stemming back to Second Temple Judea, Galilee, and the early Jewish diaspora; and some other Middle Eastern influences. Christianity and Roman Catholicism has played a prominent role in the shaping of Western civilization, which throughout most of its history, has been nearly equivalent to Christian culture. (There were Christians outside of the West, such as China, India, Russia, Byzantium and the Middle East). Western civilization has spread to produce the dominant cultures of modern Americas and Oceania, and has had immense global influence in recent centuries in many ways.

Following the 5th century Fall of Rome, Western Europe entered the Middle Ages, during which period the Catholic Church filled the power vacuum left in the West by the fall of the Western Roman Empire, while the Eastern Roman Empire (or Byzantine Empire) endured in the East for centuries, becoming a Hellenic Eastern contrast to the Latin West. By the 12th century, Western Europe was experiencing a flowering of art and learning, propelled by the construction of cathedrals and the establishment of medieval universities. Christian unity was shattered by the Reformation from the 16th century. A merchant class grew out of city states, initially in the Italian peninsula (see Italian city-states), and Europe experienced the Renaissance from the 14th to the 17th century, heralding an age of technological and artistic advance and ushering in the Age of Discovery which saw the rise of such global European Empires as those of Spain and Portugal.

The Industrial Revolution began in Britain in the 18th century. Under the influence of the Enlightenment, the Age of Revolution emerged from the United States and France as part of the transformation of the West into its industrialised, democratised modern form. The lands of North and South America, South Africa, Australia and New Zealand became first part of European Empires and then home to new Western nations, while Africa and Asia were largely carved up between Western powers. Laboratories of Western democracy were founded in Britain's colonies in Australasia from the mid-19th centuries, while South America largely created new autocracies. In the 20th century, absolute monarchy disappeared from Europe, and despite episodes of Fascism and Communism, by the close of the century, virtually all of Europe was electing its leaders democratically. Most Western nations were heavily involved in the First and Second World Wars and protracted Cold War. World War II saw Fascism defeated in Europe, and the emergence of the United States and Soviet Union as rival global powers and a new "East-West" political contrast.

Other than in Russia, the European Empires disintegrated after World War II and civil rights movements and widescale multi-ethnic, multi-faith migrations to Europe, the Americas and Oceania lowered the earlier predominance of ethnic Europeans in Western culture. European nations moved towards greater economic and political co-operation through the European Union. The Cold War ended around 1990 with the collapse of Soviet imposed Communism in Central and Eastern Europe. In the 21st century, the Western World retains significant global economic power and influence. The West has contributed a great many technological, political, philosophical, artistic and religious aspects to modern international culture: having been a crucible of Catholicism, Protestantism, democracy, industrialisation; the first major civilisation to seek to abolish slavery during the 19th century, the first to enfranchise women (beginning in Australasia at the end of the 19th century) and the first to put to use such technologies as steam, electric and nuclear power. The West invented cinema, television, the personal computer and the Internet; produced artists such as Michelangelo, Shakespeare, Rembrandt, Bach, and Mozart; developed sports such as soccer, cricket, golf, tennis, rugby and basketball; and transported humans to an astronomical object for the first time with the 1969 Apollo 11 Moon Landing.

James Callaghan

Leonard James Callaghan, Baron Callaghan of Cardiff, (; 27 March 1912 – 26 March 2005), often known as Jim Callaghan, was a British politician who served as Prime Minister of the United Kingdom from 1976 to 1979 and Leader of the Labour Party from 1976 to 1980.

So far the only holder of all four of the Great Offices of State, Callaghan served as Chancellor of the Exchequer (1964–1967), Home Secretary (1967–1970) and Foreign Secretary (1974–1976) prior to his appointment as Prime Minister. As Prime Minister, he had some successes, but is mainly remembered for the "Winter of Discontent" of 1978–79. During a very cold winter, his battle with trade unions led to immense strikes that seriously inconvenienced the public, leading to his defeat in the polls by Conservative leader Margaret Thatcher. Callaghan was the last Prime Minister born before the First World War.

Upon entering the House of Commons in 1945, he was on the left wing of the party. Callaghan steadily moved towards the right, but maintained his reputation as "The Keeper of the Cloth Cap"—that is, he was seen as dedicated to maintaining close ties between the Labour Party and the trade unions. Callaghan's period as Chancellor of the Exchequer coincided with a turbulent period for the British economy, during which he had to wrestle with a balance of payments deficit and speculative attacks on the pound sterling (its exchange rate to other currencies was almost fixed by the Bretton Woods system). On 18 November 1967, the government devalued the pound sterling. Callaghan became Home Secretary. He sent the British Army to support the police in Northern Ireland, after a request from the Northern Ireland Government.

After Labour was defeated at the 1970 general election, Callaghan played a key role in the Shadow Cabinet. He became Foreign Secretary in 1974, taking responsibility for renegotiating the terms of the UK's membership of the European Communities, and supporting a "Yes" vote in the 1975 referendum to remain in the EC. When Prime Minister Harold Wilson resigned in 1976, Callaghan defeated five other candidates to be elected as his replacement. Labour had already lost its narrow majority in the House of Commons by the time he became Prime Minister, and further by-election defeats and defections forced Callaghan to deal with minor parties such as the Liberal Party, particularly in the "Lib–Lab pact" from 1977 to 1978. Industrial disputes and widespread strikes in the 1978 "Winter of Discontent" made Callaghan's government unpopular, and the defeat of the referendum on devolution for Scotland led to the successful passage of a motion of no confidence on 28 March 1979. This was followed by a defeat at the ensuing general election.

Callaghan remained Labour Party leader until November 1980, in order to reform the process by which the party elected its leader, before returning to the backbenches where he remained until he was made a life peer as Baron Callaghan of Cardiff. He went on to live longer than any other British prime minister—92 years and 364 days.

John Maynard Keynes

John Maynard Keynes, 1st Baron Keynes ( KAYNZ; 5 June 1883 – 21 April 1946), was a British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and was one of the most influential economists of the 20th century. Widely considered the founder of modern macroeconomics, his ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. He detailed these ideas in his magnum opus, The General Theory of Employment, Interest and Money, published in 1936. In the mid to late-1930s, leading Western economies adopted Keynes's policy recommendations. Almost all capitalist governments had done so by the end of the two decades following Keynes's death in 1946.

As leader of the British delegation, Keynes participated in the design of the international economic institutions established after the end of World War II, but was overruled by the American delegation on several aspects. Keynes's influence started to wane in the 1970s, partly as a result of the stagflation that plagued the Anglo-American economies during that decade, and partly because of criticism of Keynesian policies by Milton Friedman and other monetarists, who disputed the ability of government to favourably regulate the business cycle with fiscal policy. However, the advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the crisis by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.When Time magazine included Keynes among its Most Important People of the Century in 1999, it stated that "his radical idea that governments should spend money they don't have may have saved capitalism." The Economist has described Keynes as "Britain's most famous 20th-century economist." In addition to being an economist, Keynes was also a civil servant, a director of the Bank of England, and a part of the Bloomsbury Group of intellectuals.

Lend-Lease

The Lend-Lease policy, formally titled An Act to Promote the Defense of the United States, (Pub.L. 77–11, H.R. 1776, 55 Stat. 31, enacted March 11, 1941) was an American program to defeat Germany, Japan and Italy by distributing food, oil, and materiel between 1941 and August 1945. The aid went to the United Kingdom, China, and later the Soviet Union, Free France, and other Allied nations. It included warships and warplanes, along with other weaponry. The policy was signed into law on March 11, 1941, and ended overnight without prior warning when the war against Japan ended. The aid was free for all countries, although goods in transit when the program ended were charged for. Some transport ships were returned to the US after the war, but practically all the items sent out were used up or worthless in peacetime. In Reverse Lend Lease, the U.S. was given no-cost leases on army and naval bases in Allied territory during the war, as well as local supplies.

The program was under the direct control of the White House, with Roosevelt paying close attention, assisted by Harry Hopkins, W. Averell Harriman, and Edward Stettinius Jr.. Roosevelt often sent them on special missions to London and Moscow, where their control over Lend Lease gave them importance. The budget was hidden away in the overall military budget, and details were not released until after the war.

A total of $50.1 billion (equivalent to $543 billion in 2016) was involved, or 11% of the total war expenditures of the U.S. In all, $31.4 billion ($340 billion) went to Britain and its Empire, $11.3 billion ($122 billion) to the Soviet Union, $3.2 billion ($34.6 billion) to France, $1.6 billion ($17.3 billion) to China, and the remaining $2.6 billion to the other Allies. Reverse lend-lease policies comprised services such as rent on bases used by the U.S., and totaled $7.8 billion; of this, $6.8 billion came from the British and the Commonwealth, mostly Australia and India. The terms of the agreement provided that the materiel was to be used until returned or destroyed. In practice very little equipment was in usable shape for peacetime uses. Supplies that arrived after the termination date were sold to Britain at a large discount for £1.075 billion, using long-term loans from the United States. Canada was not part of Lend Lease. However it operated a similar program called Mutual Aid that sent a loan of C$1 billion (equivalent to C$14.2 billion in 2017). and C$3.4 billion (C$48.2 billion) in supplies and services to Britain and other Allies.This program effectively ended the United States' pretense of neutrality and was a decisive change from non-interventionist policy, which had dominated United States foreign relations since 1931. (See Neutrality Acts of 1930s.)

Peter Thorneycroft

George Edward Peter Thorneycroft, Baron Thorneycroft, (26 July 1909 – 4 June 1994) was a British Conservative Party politician. He served as Chancellor of the Exchequer between 1957 and 1958.

Sir James Hutchison, 1st Baronet

Sir James Riley Holt Hutchison, 1st Baronet, DSO, TD, JP (10 April 1893 – 24 February 1979) was a British army officer, company director and politician. He was the son of a Scottish shipowner and spent his commercial life in the same field and as a director of shipbuilders, but fought in both World Wars during a long military career. He distinguished himself as the principal British liaison officer with the French Resistance during the Second World War in which he needed plastic surgery to disguise his appearance from the Germans; he was nicknamed the "Pimpernel of the Maquis". At the end of the Second World War he was elected as a Unionist Member of Parliament in Glasgow, and although the city was turning against his party he enjoyed a 14-year Parliamentary career.

Stanley Evans

Stanley Norman Evans (1 February 1898 – 25 June 1970) was a British industrialist and Labour Party politician. He served very briefly as an Agriculture Minister in the post-war Attlee government but was forced to resign when he claimed that farmers were being "featherbedded". During the Suez Crisis, Evans broke from the party line and supported the Conservative government's policy, which led his local association successfully to press him to resign from Parliament.

United Kingdom–United States relations

United Kingdom–United States relations, also referred to as British–American relations or Anglo-American relations, refers to the bilateral relations between the United Kingdom of Great Britain and Northern Ireland and the United States of America. Relations encompass many complex relations ranging from two early wars to competition for world markets. Since 1940 they have been close military allies enjoying the Special Relationship built as wartime allies and NATO partners.

The two nations are bound together by shared history, an overlap in religion and a common language and legal system, and kinship ties that reach back hundreds of years, including kindred, ancestral lines among English Americans, Scottish Americans, Welsh Americans, Scotch-Irish Americans and American Britons, respectively. Today, large numbers of expatriates live in both countries.

Through times of war and rebellion, peace and estrangement, as well as becoming friends and allies, Britain and the US cemented these deeply rooted links during World War II into what is known as the "Special Relationship". In long-term perspective, the historian Paul Johnson has called it the "cornerstone of the modern, democratic world order."In the early 20th century, the United Kingdom affirmed its relationship with the United States as its "most important bilateral partnership" in the current British foreign policy, and the American foreign policy also affirms its relationship with Britain as its most important relationship, as evidenced in aligned political affairs, mutual cooperation in the areas of trade, commerce, finance, technology, academics, as well as the arts and sciences; the sharing of government and military intelligence, and joint combat operations and peacekeeping missions carried out between the United States Armed Forces and the British Armed Forces. Canada has historically been the largest importer of U.S. goods and the principal exporter of goods to the United States. As of January 2015 the UK was fifth in terms of exports and seventh in terms of import of goods.The two countries also have had a significant impact of the cultures of many other countries. They are the two main nodes of the Anglosphere, with a combined population of around 385 million in 2015. Together, they have given the English language a dominant role in many sectors of the modern world.

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