CANBERRA, 19 March 1944
PERSONAL IMMEDIATE FOR MELVILLE ALONE FROM MINISTER FOR EXTERNAL AFFAIRS SECRET
1. I must express great disappointment in your 44.  I can imagine the pressure to which you must be subjected from many quarters, but you were fully warned and I would like you to inform me privately through Stirling the External Affairs Officer whether you have discussed my telegram  with any other person. I asked you previously to communicate with me through this channel in order that you could inform me frankly and without reserve what the various attitudes are. In particular I desire to know whether Bruce is participating in any way.
2. I am discussing commercial policy and other matters with the sub-committee  early next week and meanwhile the following detailed comments will help you to know probable attitude.
(a) I disagree with your interpretation of Article VII except in the sense that elimination of preferences may ultimately result from a long-term policy of full employment, increased standards and a series of commodity arrangements. To commence with such elimination puts the cart before the horse. Our employment approach demonstrates the true principle.
(b) Supposed intentions of the United States of America as interpreted by United Kingdom or Canadian officials are a poor foundation on which to base present tactics. The United States of America with United Kingdom assistance refused bilateral arrangement with Australia.  Moreover even if this report of United States of America attitude is correct the fact is that the United States of America can hardly press for honouring a commitment in relation to preferences if as stated by Keynes (see your 31 paragraph 1(iii) and paragraph 7 ) they are not prepared to honour the all-important obligation to maintain employment.
(c) Your reference to Ottawa agreement  is noted. No British Government would live if it terminated Ottawa agreement against wishes of Australia and New Zealand.
(d) Primary industries are of equal concern to this Government as secondary industries and before any expression of views we will wish to know far more about post-war markets, British and European and American agricultural policies and assurance of rising levels of consumption.
(e) The final summary of your view in paragraph 3 expresses a view that some reduction of preferences is inevitable under the Mutual Aid Agreement. Your delegation has no authority whatever for saying so. It is expressly contrary to your instructions  which also include the Australian - New Zealand firm Agreement on interpretation of Article VII which specifically mentions 'British Commonwealth Preferences' as a measure we may have to retain. I suggest you should frankly but firmly remind your co-delegates that they must assist you in carrying out Government instructions.
3. Full text of my statement on Canadian agreement has been repeated to you.  This is also in accordance with Government policy although of necessity it could not be quite so specific as Australian New Zealand Agreement on economic collaboration. 
4. I especially desire to know whether New Zealand delegates have acted in accordance with such agreement.