18 AUGUST 1967, Page 3

The Prime Minister to the Chancellor

My dear Jim, I am so glad you confirm my view of Alice Bacon. About Shirley Williams I will have another think. I cannot tell you how much value your advice on subjects such as these, which seem to take up an increasing amount of my time. You will. I know, laugh a lot when I tell you that at yesterday's session of 'Cabinet- making' Mary swapped you for Fred Mulley, and by so doing won the game. (The rules are a little complicated, devised as they were by your friend Nicky Kaldor. 1 will explain them to you sometime.) You will be glad to learn that the dog has

disappeared, together with Tommy Balogh— which. I know, will make you even gladder. I have put George Wigg on the trail. This, with any luck, should keep him occupied for several weeks.

I come now to the part of your letter which

wounded me deeply. As you so rightly say, we have known each other for a long time, and I assure you that you misunderstand me. In fact I haven't been so misunderstood since I sum- moned Tony Benn to my suite at a party con- ference—he was then PMG-10 ask him why I was having trouble getting a birthday greetings telegram through to my aged father in Cornwall. Poor Tony B. thought I wanted to hear his views on party policy, and I had quite a job disillusioning him.

Your misunderstanding of me is a bit different, I admit; but let me say frankly, here and now, that I wish you nothing but.well in your chosen career, however it may turn out in the end. I cannot emphasise strongly enough that there is a job of work to be done, and that you and I must see it through together. The economic policies in which we have both be- lieved are now beginning to bear fruit, and I repeat that it would be a pity for you to leave at your moment of triumph. In fact I am plan- ning a series of speeches in which I will give the sole credit for our economic performance to you. I hope this idea appeals to you as much as it does to me.

With all good wishes.

Yours ever, Harold.