464 Mr John Curtin, Prime Minister, to Dr H. V. Evatt, Minister for External Affairs (in Washington)

Cablegram PM41 CANBERRA, 13 April 1942

SECRET

Reciprocal Lease Lend.

Prior to receipt of your telegram [1] we had closely examined methods of procedure and reached conclusions conveyed to you in my telegram of 7th inst. [2] Have examined matter further in the light of your telegram and wish to make the following points:-

1. It is essential to the success of the negotiations from our point of view that arrangements cover the protection of our exchange position.

2. No agreement covering lease lend should be signed which does not cover this aspect of the question unless the necessary protection is simultaneously provided in a separate agreement or memorandum of understanding.

3. Any agreement or understanding protecting our exchange position must include United Kingdom as our exchange problem is primarily a sterling problem.

4. We see no need to re-open the Mutual Aid Agreement. In our view present negotiations should be concerned with immediate issues-the nature and extent of aid to be given by the parties and the protection of our exchange position. We have accepted the principles of the Mutual Aid Agreement and nothing can be gained from re-opening the long term issues involved.

5. We suggest that negotiations might acceptably result in one of the following arrangements- (a) A triangular agreement between United States of America, United Kingdom, and Australia (referring to February Mutual Aid Agreement) providing for reverse lease lend and the protection of Australian exchange position.

(b) Two agreements- First between United States and Australia (referring to Mutual Aid Agreement) and covering the nature and extent of direct and reverse lease lend between the parties.

Second, a triangular agreement or memo. of understanding protecting Australian exchange position.

I should be glad if you would examine position and advise further.

1 Cablegram S29 of 6 April on file AA:MP1217, Box 474, Cablegrams to and from Dr Evatt (see Treasury memorandum of 14 April on file AA:A2700, agendum 273). It asked for authority for Evatt to execute a Lend-Lease Agreement between the United States and Australia.

2 Document 457.

[AA:A981, USA 181, i]