conclusion of the present series of negotiations, the British 
      lend-lease program could be stabilized in all major aspects until 
                       mid-Summer at least.                 
 
                                                            
 
 
3. The question is more than one of embarrassment. The present 
      British dollar balances must be considered as the only reserve 
      for their growing financial commitments, especially in the Middle 
      East and Far East. An ordering of their affairs which will reduce 
      those holdings may gravely weaken their machinery of war finance. 
   Against that back-ground, the balances do not seem too hi
 
                                                            
 
 
Furthermore, they have risen largely because of our troop 
      expenditures, a source of dollars which may well decline after 
      the next few months. If the British are to be able to cooperate 
      with us in multilateral solutions of trade and financial problems, 
      they must finish the war with enough assets to carry through 
      such a program. Even as things stand now, it would be difficult 
      for the British to consider unfreezing sterling at or near the 
      end of the war, or giving up many of their other economic controls. 
      If the financial side of the war is run in such a way as to keep 
      British balances at or about $1 billion, we thereby reduce our 
   chance to achieve the basic economic policy we want and n
 
                                                            
 
 
                    E.R. Stettinius, Jr.                    
 
                           Attachment:                      
 
                       Draft of letter from                 
 
                      the President to the                  
 
      Prime Minister