298 Department of External Affairs to Legation in Washington

Cablegram 1456 CANBERRA, 25 September 1944

SECRET

Lend Lease in Stage II.

1. A number of telegrams have been exchanged with the Dominions Office on the subject of the scope and scale of Lend Lease and Mutual Aid in Stage II, i.e., the stage between the defeat of Germany and the defeat of Japan.

2. Dominions Office telegram No. 250 [1] of September 19th gives an account of the discussions between the United Kingdom Prime Minister and the United States President on this subject at the Quebec Conference.

3. A joint United Kingdom - United States Committee is to be set up to consider the question and recommend to their Governments the amount of Mutual Aid in munitions, non-munitions and services to be provided for the most effective prosecution of the war. Pending its recommendations no major decisions are to be taken by either Government without the approval of the Committee as to programmes of Lend Lease Aid.

4. It is expected that the Committee will soon get down to the business of making detailed estimates of requirements and the United Kingdom Government has suggested that, as a first step, the Australian representatives in Washington be authorised to place themselves in touch with the United Kingdom Minister Resident for Supply immediately in order that discussions may be held to determine the best procedure for ensuring that Australia's position is taken fully into account.

5. We have already supplied the Dominions Office with estimates in broad categories of the dollar value of our non-munitions requirements in the first twelve months of Stage II [2] and we understand that these estimates have been repeated to the United Kingdom representatives in Washington. We presume you will be able to arrange to obtain copies of our exchanges with the Dominions Office from the United Kingdom Minister Resident for Supply.

6. It is our desire that all discussions with the United Kingdom representatives on this question be handled as under:-

(A) Munitions requirements-matters affecting the provision of munitions items in Stage II are to be handled through the Australian Service representatives, i.e., the Chief of the Military Mission, the Chief of the Air Mission and the Naval Attache (B) Non-munitions requirements-matters affecting the provision of non-munitions requirements in Stage II are to be handled through the Director-General, Australian War Supplies Procurement (Macgregor), with the Assistant Director (Jacobsen) as an alternate.

(C) General policy and Financial aspect-W. E. Dunk, Treasury representative, who is at present en route to Washington by Air, is to act as a representative to collaborate with the representatives of the Service Munitions and Director-General, Australian War Supplies Procurement on both munitions and non- munitions items. He is to participate in all discussions and is to be consulted on all telegrams and correspondence relating to this question.

7. It is also desired that you keep personally in close touch with the general trend of the discussions. It will be the responsibility of the other representatives to ensure that you are kept informed and that any questions that are of direct concern to you are referred to you for advice.

8. Please notify the United Kingdom Minister Resident and the Australian Officials concerned of these arrangements.

1 Document 291.

2 See cablegram 226, dispatched 6 September. On file AA:A571, L41/915A, iv.

[AA:A571, L41/915A, iv]