393 Commonwealth Government to Mr R. G. Menzies, Prime Minister (in London)

Cablegram 209 8 April 1941,

In cable to Dominions Office, dated 22nd February [1] setting out our requirements for war and essential civil needs from U.S.A. up to June 1942 we agreed that all orders both for warlike stores and other commodities should be placed through British Supply Council in North America subject to details being arranged later.

In further cable to Dominions Office dated 26th March [2] we asked for information as to the organisation for the placement of orders and as to the part which the Dominions should play in it. We stated that we required the information so that we could establish appropriate machinery for handling priorities and could keep our representatives in U.S.A. fully informed. We have received no reply.

There are several problems which we would be grateful if you could discuss with the appropriate authorities in London and with our own representatives and the British Supply Council in North America on your arrival there. They are:-

(1) How is our ordinary purchasing procedure to be fitted into the Lease Lend Scheme.

(2) What steps are being taken to ensure that Dominion needs are given adequate consideration.

(3) Upon what basis is Australia's share of the United States appropriations under Lease and Lend Act to be determined.

(4) What is the nature of the financial obligation Australia will incur. Is it proposed that we should enter into this obligation to the full extent of goods purchased under the Lease and Lend Act irrespective of whether our balance of payments with U. S. A.

requires it or not.

(5) On the other hand what action is proposed should our requirements from U.S.A. over and above what we can pay for from current exports, etc. exceed our share of the appropriation under the Lease Lend Act.

(6) Is it necessary for Australia to appoint in U.S.A. a special financial adviser to deal with problems arising under the Lease and Lend Act. Massy-Greene [3] has suggested this course.

For the time being we have authorised Macgregor [4] in collaboration with Clapp [5] and Casey [6] to act as official channel for transactions under this scheme subject to rule that all orders must be placed through British Supply Council.

1 Document 314.

2 AA: A3196, 1941, 0.3740.

3 Chairman of the Treasury War Finance Committee and leader of the Australian delegation to the Eastern Group Supply Conference, 25 October-25 November 1940.

4 Government Trade Commissioner in the United States.

5 Head, Australian Division, British Purchasing Commission in the United States.

6 Minister to the United States.

[AA: A3196, 1941, 0.4390]