14 Department of External Affairs to Legation in Washington

Cablegram 1022 CANBERRA, 9 July 1946

Your 906.

Jackson [1] discussed UNRRA policy and supply arrangements generally with Prime Minister, Treasury and External Affairs. The following are main points of agreement reached in course of conversations:

(I) That Australia should complete as far as possible existing contracts and commitments for supply.

(II) That the 10 percent of the original contribution which Australia had undertaken to supply as 'free funds' should revert to the Australian supply programme except for small amounts which might be required to be used from current administrative expenses for such matters as transportation, freights, etc.

(III) That we would allow an uncommitted contingency fund of approximately 1m. to meet unforeseen expenditure and to enable UNRRA to take up any relatively small but urgently required available supplies.

(IV) That, subject to (I) and (III), it would suit UNRRA for us to take up the suggested commitment for Wool. [2]

(V) That if there was any substantial amount of war surpluses which are wanted by UNRRA and which are readily available over and above existing commitments on surpluses the wool commitment could be abated to a suitable amount as may be mutually agreed between us.

2. Jackson stated that he was anxious that the locomotive contract [3] should proceed and in discussion with Prime Minister, he urged that everything possible should be done to provide raw material, particularly steel, to ensure that time schedule for delivery is adhered to. The furthest period Jackson could consider for delivery of locomotives was September, 1947, and this was three months beyond the scheduled date for closing down of procurement.

Jackson was advised to impress on both the contractor and Department of Supply and Shipping the strict necessity of adhering to a delivery schedule to conclude before September, 1947. We are emphasising this point with Supply also.

1 Commander R. G. A. Jackson, Senior Deputy Director-General of UNRRA, had arrived in Sydney on 1 July after a short visit to New Zealand.

2 Although the United Kingdom had originally agreed to a share in total UNRRA requests for wool, the U.K. Board of Trade advised Dominion representatives in June that 'it would now suit' the United Kingdom to use the money it had allocated for wool to supply other goods to UNRRA, and that consequently the entire quantity of wool requested by UNRRA was available for allocation among the Dominions.

3 Australia had agreed to supply fifty locomotives to UNRRA for shipment to China. A mission from Clyde Engineering Company in Sydney had travelled to China in May, and on its return contract negotiations were commenced between the Department of Supply, Clyde Engineering, and the South Australian Railways.

[AA:A3196, 1946, 0.13455]