Eighty years ago this week weak hands and high stakes in Washington and Paris

 

Britain was facing the challenge of its effective bankruptcy. The lead British negotiator Lord Keynes was on the verge of collapse after navigating aggressive American nit-picking and confused views in London; the Chancellor of the Exchequer Hugh Dalton was at sea, barely reading the papers which he might not have understood anyway; the Bank of England showed little signs of awareness that Britain's financial might had dwindled since 1914. Three weeks of gruelling negotiations in Washington yielded a public offer from the US of a loan of £875m at 2% interest and £125m applied against lease-lend debts. The stark truth was that unless Britain were prepared to retreat into complete autarky based on the relics of Empire ("starvation corner") it held no cards.

The near-truce between the Labour government and the Conservatives was breaking down. The government had yet to roll out its full detailed five year plan for nationalising industry including utilities, in particular how private owners were to be compensated if at all. There was a distinct hint that unless businesses continued with full investment programmes during the interregnum between private and state ownership, compensation would be curtailed. Even though there was nothing specific to discuss, the Conservatives demanded a debate in the Commons which was brusquely rejected.

The French Communist Party mounted an aggressive bid for power in the new government which the now President de Gaulle was in process of forming.  They demanded one of the top three portfolios: foreign affairs, defence or the interior. As the largest party in the Assembly they were in a strong position but de Gaulle directly accused Thorez, their leader, of working for Moscow, not France. When de Gaulle openly threatened resignation, the Communists backed down and had to be satisfied with only a share (procurement) in the defence portfolio, which would give them no influence over major policy.