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Britain’s Grand Strategy of Restrained Punishment


1969; Williams 1972; McKercher 1993). U.S. Secretary of State Cordell Hull called Britain’s protectionist Ottawa Agreements “the greatest injury, in a commercial way, that has been in›icted on this country since I have been in public life” (Gardner 1969, 19). Britain’s imperial preference system was seen as a barrier to American recovery from the Depression since foreign markets could provide an outlet for surplus agricultural and manufactured products (Williams 1972, 233).

During World War II, Washington used the Atlantic Charter (Anglo- American declaration of war aims, signed in 1941) and the Lend-Lease Act to pressure London to reverse its imperial preference system, open the Sterling Area, and restore the gold standard (Cain and Hopkins 1993a, 99–102). The United States tried to write a nondiscrimination clause into the Atlantic Charter calling for “access, on equal terms, to the trade and to the raw materials of the world that are needed for their economic pros- perity” (Gardner 1969, 46–47). For the sake of good Anglo-American relations, President Franklin Roosevelt agreed to Prime Minister Winston Churchill’s request to water down the accord by replacing the clause “with due respect for our existing obligations” (Kimball 1971, 250). The Lend- Lease Act (1942) was less vague: Clause VII called for the “elimination of all forms of discriminatory treatment in international commerce and . . . the reduction of tariffs and other trade barriers” (Kimball 1971, 253).11 The goal of both clauses was to destroy Britain’s imperial economic bloc and to break up the Sterling Area.

In addition to destroying Britain’s imperial preference trading system, the United States sought to dismantle the British Empire (at least until the rise of the Cold War) by promoting a policy of self-determination. Part III of the Atlantic Charter called for “sovereign rights and self-govern- ment restored to those who have been forcibly deprived of them” (Graeb- ner 1984, 87). Further, Roosevelt repeatedly offered advice to Churchill on the desirable steps toward Indian independence. With such a policy, the United States operated at cross purposes with Britain in the Middle East and Asia.


In confronting new and old protagonists, within Britain the members of the opposing free-trade and economic nationalist blocs struggled over how to respond to these challenges. Free traders and internationalists preferred cooperation with contenders, translating into an outward-oriented policy of freer trade, disarmament, participation in the League of Nations, ‹scal

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