11 Commonwealth Government to Lord Cranborne, U.K. Secretary of State for Dominion Affairs

Cablegram 461 [1] CANBERRA, 21 July 1941

Your telegram 445 Lease-Lend. [2]

We are pressing on with organisation for dealing with acquisition

of goods under Lease-Lend. Following is present position in

relation to requirements listed in your paragraph 3. (a) Generally

speaking through import licensing civil imports from United States

of America have been limited to essentials. No relaxation of

standards of what is essential will be permitted but rather the

procedure of progressively intensifying restrictions will be

continued.

(b) (1) Instructions have been issued to all Commonwealth

Government Departments to place all orders for goods from United

States of America with Australian Section of British Purchasing

Commission, New York. This applies also to orders which previously

have been placed through the United Kingdom Ministry of Supply.

(2) List of Service requirements for 1941/42 will shortly be

cabled to New York. These will be followed by necessary detailed

specifications etc. as soon as possible.

(3) Lease-Lend Clearing House for non-warlike goods is being set

up on the basis of the existing import licensing organisation. All

private orders for goods listed which are approved by Clearing

House will be placed with Australian Section British Purchasing

Commission as Government orders for procurement under Lease-Lend

if possible.

(4) Clearing House organisation will not be operating effectively

for few weeks.

(5) Clearing House will (in collaboration, where necessary, with

appropriate Department) attempt to obtain consolidated orders for

goods listed in your paragraph 5 and also for other machinery,

railway, docks and harbour equipment, telephonic and

communications equipment, and civil aircraft as advised by

Australian Minister in Washington. [3]

(c) No further Government orders for goods in classes referred to

will be placed privately in United States of America. Non-

Government orders will be centralised once the Clearing House is

operating.

(d) In distributing goods outside Government departments we cannot

see any satisfactory alternative to charging on the basis of

estimated cost including incidental cash charges which may be

incurred in respect of Lease-Lend goods. Proceeds of sales would

be used-

(i) in case of sales to Government contractors to be set against

gross cost to Department concerned;

(ii) in other cases to be used for war expenditure.

We are satisfied that only by this means can adequate control and

economy be secured. Should it be necessary for private interests

to act as agents for government in distributing goods they will

not be permitted to make profits. Any remuneration will be on

basis of commission or direct payment for services.

We will advise as early as possible on further developments.

1 Repeated to the Government Trade Commissioner in North America

as no. 2163.

2 Dispatched 29 June. On file AA : A1608, A59/2/1, i.

3 R. G. Casey.

[AA : A3196, 1941, 0.10211]