INTERNATIONAL CONFERENCE PROPOSED INTERNATIONAL MONETARY FUND
Statement of Principles for an International Monetary Fund
(already circulated)  is to be the basis of discussion at a
Conference in United States of America on 1st or 7th July. The
conclusions of the Conference will not be binding on Governments,
but will be referred to Governments for final consideration and
decision. It is necessary now for Cabinet to consider the matter
so that suitable instructions may be given to the Australian
2. The Cabinet Sub-Committee has examined the proposals  and
discussed details at some length with the Australian
representatives at the recent London talks (Messrs. Melville and
Wheeler) and with other officials.
3. The Sub-Committee recognised that the provision of additional
international reserves, which the Fund would offer Australia in
the form of the 'quota', would strengthen our ability to meet
fluctuations in the external balance of payments. The Fund could
also provide indirect benefits through its potentially expansive
effects on international trade.
4. On the other hand, the plan involves obligations on Australia
which should be carefully considered, the most important being
surrender of some freedom to vary the Australian exchange rate.
The examination on the technical side has been directed to points
where there might be disadvantages for Australia and in particular
to the following aspects:
(a) Purposes and policies of the Fund.
(b) The Australian quota and annual drawing rights.
(c) Control of movements in exchange rates.
(d) Right of withdrawal.
(e) The form of management and the discretionary power in its
5. Apart from the technical aspects of the scheme, there are other
angles which should be taken into consideration, and these will be
discussed further with Full Cabinet.
6. When the decisions of the Conference are later referred to
Governments the Australian Government will have the opportunity of
giving final consideration and decision before submitting the plan
to Parliament, which must be consulted before any definite
commitment is entered into.
7. The Sub-Committee recommends that the Australian Delegation
should include Messrs. Melville, Wheeler and Tange, who should
reach United States of America in time for the preliminary
Drafting Committee composed of officials which will commence about
the 24th June.
It is also recommended that Sir Owen Dixon should be asked to
assist in any important drafting which may be necessary.
8. The attached memorandum entitled 'Australia and Monetary Fund'
 discusses the main technical points and sets out the
instructions which the Cabinet Sub-Committee recommends be given
to the Australian representatives on these points. It is
recommended that the Australian representatives should be asked to
collaborate fully with the New Zealand delegation in an endeavour
to reach an agreed approach.
J. B. CHIFLEY
H. V. EVATT
CANBERRA, 10 June 1944
SUPPLEMENT TO AGENDUM ON INTERNATIONAL MONETARY CONFERENCE
PROPOSAL FOR A UNITED NATIONS BANK FOR RECONSTRUCTION AND
The invitation from the United States indicates that the
Conference opening on July 1st may also be asked to formulate a
proposal for an international bank for reconstruction and
development. Although there has already been some discussion among
officials of the United States, United Kingdom and Dominions on
this subject, no concrete proposal for discussion at the
Conference has been put forward. At this stage, therefore, it is
not possible to give detailed instructions to our Delegation.
It is considered that it would be in Australia's interests if a
successful attempt were made to organise international investment
on an expanded and more stable basis after the war. An
organization set up for this purpose should be able to assist
rehabilitation and reconstruction in war-damaged countries, in the
immediate post-war period and aid the development of
underdeveloped countries over the longer-term future. Moreover,
such an authority could, by encouraging overseas investment by
creditor countries, assist other countries to bring about
equilibrium in their balance of payments, and thus facilitate the
successful operation of any International Monetary Fund which may
be established, and of other post-war economic proposals.
It is therefore recommended that the Australian delegation inform
the Conference that the Commonwealth Government is interested in
further action being taken to achieve the general objectives
J. B. CHIFLEY
H. V. EVATT