146 Makin to Chifley

Cablegram 1615 WASHINGTON, 9 December 1947, 5.38 p.m.

SECRET

At the request of the State Department this morning I went to see former Assistant Secretary of State Clayton [1], who conveyed to me the deep concern of the United States at the attitude of Australia in opposing the suggestion that the I.T.O. should use the International Monetary Fund as provided in Article 24 paragraph 2 of I.T.O. Draft Charter [2] having relation to balance of payments and application of quotas in trade arrangements.

It was emphasised that it seemed unnecessary duplication for I.T.O. to set up its own organisation in this respect. Clayton was certain that Congress would not agree to this policy.

Winthrop Brown, Chief of Commercial Policy Division, suggested that Coombs had conveyed the impression that the reason behind Australia's attitude was due to America not having supported Australia originally for a place on the Fund Directorate. Clayton said he regretted any misunderstanding which may have arisen over this matter, but emphasised that America had moved to make the fourteenth position on the Fund Directorate which is now available to Australia.

I understood that Ambassador Butler is representing the whole question in Canberra. If we are unable to support the view taken by the United States, it would be helpful if positive reason could be stressed in order to remove the impression that Australia's attitude is purely retaliatory.

I informed Clayton that I would have his views communicated to you immediately.

1 Clayton had resigned from his position as Under Secretary of State in October but continued as Chairman of the US Delegation to the Havana Conference.

2 The provision read, in part, 'In all cases in which the Organization is called upon to consider or deal with problems concerning monetary reserves, balance of payments or foreign exchange arrangements, the organization shall consult fully with the International Monetary Fund.'

[AA : A1068, ER47/8/1]