70 Mr R. G. Menzies, Prime Minister, to Mr S. M. Bruce, High Commissioner in London

Cablegram unnumbered 21 February 1940,

Your own spirited efforts regarding wool much appreciated but position still most unsatisfactory. Three outstanding matters of great importance- (1) Proper basis of sale to neutrals, particularly America and Japan, must be promptly evolved at a reasonable price which should not be more than 25 per cent additional to our price to United Kingdom.

(2) The question as to annual review of price and contract should be clarified.

(3) There should be some agreement in relation to dividing profits on sales by United Kingdom of processed wool.

There is rapidly growing dissatisfaction at this end where, speaking quite frankly to you, it is felt that Essendon [1] is not exercising own judgment but referring matters to Shackleton [2] whose interests are quite contrary to ours, and where it is also felt that immediate post-war period will leave us with unsold surplus to depress English market and our own markets to Japan and America gathered by others or closed by substitutes.

General atmosphere of discussions not satisfactory or such as should exist between Governments engaged in joint and vital war enterprise. Cannot expect British textile men to worry unduly about our position and no confidence that Burgin [3] understands it at all. Under circumstances if my political waters less troubled I would go London myself but as it is consider there are two possibilities-one, to cable at length and urgently to Chamberlain [4] to invoke his personal intervention; the other to send home at once a Minister, probably McBride [5], with two members of Wool Committee to get matter concluded.

My difficulties on all war matters are great and growing and defeat of Government by no means improbable. Difficulties greatly increased by inability over period of months to get finality upon matters in relation to which I am convinced our requests are eminently fair. Would be glad if you would advise your view.

MENZIES

1 Chairman of U.K. Committee for Sale of Empire Wool Abroad.

2 Controller of Wool, U.K. Ministry of Supply.

3 U.K. Minister of Supply.

4 U.K. Prime Minister.

5 Minister without portfolio assisting the Minister for Commerce.

[FA: A3196,0.1038]