114 Commonwealth Government to Cranborne

Cablegram 101 [1] CANBERRA, 22 April 1944

SECRET

Your D.579 [2], 580 [3], 581. [4]

1. We note your intention to publish on a non-committal basis the statement of monetary principles agreed between United Kingdom and United States experts.

2. We note from the text of the proposed announcement that reference is not made to participation by Australian officials in noncommittal discussions. We are anxious that in any subsequent announcements nothing should imply that the principles published are agreed to by either Australian officials or by the Australian Government. Our reasons for this are:

(a) The reservation entered by Australian officials in regard to annual drawing rights under Clause 4(ii)(c) of the principles [5] has not been accepted by the United States Treasury;

(b) The United States Treasury has not accepted the proposal that the quota of smaller countries must be increased above that assumed in previous discussions;

(c) The agreement of Australian officials to important clauses in the principles was expressed on the assumption that the Australian quota would be not less than the equivalent of $300,000,000.

3. We feel that in any announcements made the main emphasis should be placed on a high level of employment and rising living standards as the objectives of a general plan of economic collaboration. 4. With regard to paragraph 2 of D.579 [6] the Australian Government holds strongly that, for the reasons outlined by the Australian officials at the recent London Talks, an employment Agreement should be signed before Governments are asked to enter an international Stabilization Fund or any arrangement involving far-reaching obligations. We, therefore, request that you should propose to the United States that employment policy be included in the agenda of any formal conference [which] the President may call; or, alternatively, that the subject be treated at a separate conference to be called prior to consideration of the Stabilization Fund and Investment Bank.

5. With regard to the proposed international conference, we would be glad to learn whether it is to be on a governmental level or on expert level without governmental commitment. In either event, we feel that May is inconvenient insofar as Australia is concerned as it does not leave sufficient time to permit of proper examination of documents arising from London talks and to arrange for appropriate representation.

1 Repeated to the N.Z. Prime Minister as no. 80 and to the Legation in Washington as no. 535.

2 Dispatched 19 April. On file AA:A989, 44/735/56/6. It advised that following the Article VII discussions in London, U.K. and U.S. officials had been trying to reach agreement on the suggested amendments to the statement of principles for an International Monetary Fund and on revised quotas (see ASD(44)16, pp. 24-6, on file AA:A989, 44/735/55/4/1).

3 Dispatched 19 April. On file AA:A989, 44/735/56/6. It conveyed the text of the announcement, foreshadowed in cablegram D579, to be made at the time of publication of the statement of principles.

4 Dispatched 19 April. On the file cited in note 3. It confirmed that the U.S. authorities had accepted the bulk of the amendments referred to in note 2, but that the U.K. officials had been 'unable to secure acceptance of Australian suggestion which will have to be argued further at the conference'.

5 Melville recorded a reservation that the percentage of member's quota available from the Fund would need to be increased from 25 to 33 per cent. See cablegram 59, dispatched 23 March (on file AA:A989, 44/735/55/3/3) and Document 113, paragraphs 25-6.

6 Paragraph 2 advised that the U.S. Treasury wished to publish a statement of principles on the International Monetary Fund on 22 April, as Roosevelt proposed holding an international conference in May to consider the Fund and the Bank for Reconstruction and Development

[AA:A989, 44/735/56/6]