Cablegram E117 WASHINGTON, 26 May 1943, 4 p.m.
Your telegrams 521 of 18th May and 346 of 10th April.  I
understand that substantial agreement regarding objectives of
monetary plans exists between United States and United Kingdom
experts and that there is little probability of competition
between the two plans. This view is supported by Keynes' speech in
House of Lords on May 18th. I understand that United States plans
(1) To bring together early next month  United States and
United Kingdom experts and (where they are available) those of
certain other countries with whom discussions have been held, to
seek a synthesis of British and American plans, taking into
account suggestions and criticisms received here of stabilization
fund proposals as they at present stand.
(2) To continue on the basis of the revised scheme the individual
discussions they are at present conducting at the departmental
(3) To request departmental officers participating in these
consultations to discuss proposals with their appropriate
ministers and to advise (without commitment) United States
Treasury of their views.
(4) If it appears from these reports that substantial agreement is
likely, to have a ministerial conference, possibly in September or
(5) If agreement is reached at this conference, plans will be
submitted to the various governments and parliaments.
Before we accept any scheme, even in principle, we should make it
clear that it would be acceptable to Australia in detail only if:-
(1) Australia's rights to draw exchange from the fund are adequate
to our needs.
(2) The member countries in the fund recognise the international
obligation to maintain a high level of employment and incomes.
(3) Member countries recognise the obligation to avoid persistent
credit balances of payments and that the scheme provides
satisfactory measures for exerting pressure on countries failing
to carry out this obligation.
(4) Any modification of complete freedom of action by Australia is
conditional upon the obligations referred to in (2) and (3) being
effectively implemented and that in the event of any serious
failure, Australia could regain her freedom of action without
stigma of default.
(5) No single country is in a position by controlling voting power
to dominate the fund.
My feeling is that utmost caution is required otherwise we shall
have strongest political repercussions in Australia. I do not
think our people will readily embrace any scheme which does not
take into account its special financial sacrifices as compared
with nations like Canada.