107 Department of Trade and Customs to Australian Supply Council in the United States

Cablegram Cosau 29 CANBERRA, 12 November 1941

Would appreciate early report from Australian Supply Council on proposal of United States Lease Lend Administration office that defence articles should be leased lent direct to Dominions on basis of direct submission by Dominions of requisitions countersigned by British Supply Council. Views of United Kingdom Government on this proposal fully outlined in Secretary of State [1] cable 697 of 15th October [2], substance of which no doubt obtainable by you from Embassy. See also Campbell's [3] telegrams to Eden [4] Nos. 4498 and 44995 forwarded to us under cover of Clapp's [7] letter of 14th October. [7]

Would appreciate your observations on following:-

(1) Whether direct requisitioning would enable Australia to obtain a larger share of lease lend defence goods under congressional appropriations. It is felt here that in relation to materials equipment, etc. for production our procurements are small compared with those of United Kingdom.

(2) Whether in your opinion direct representation would result in more expeditious procurement of defence goods for Australia.

(3) Is there any possibility of Australia being submitted to direct economic or political pressure by United States Government if directly represented? This may be particularly relevant to the matters on which McCarthy and Fletcher at present are engaged. [8]

(4) Under the proposed procedure of United Kingdom endorsement, would United Kingdom refusal to endorse automatically preclude our approach to United States Administration if we considered requisition should be pressed? The Interdepartmental Committee was inclined to agree with United Kingdom viewpoint that United States reasons for change lack substance and felt that as plea of United Kingdom that proposal would interfere with higher strategy of war was dismissed there must be other reasons for proposed change.

Control of means to wage war cannot be separated from higher direction of war and strategical background. This aspect of question is receiving attention of Defence Committee but Interdepartmental Committee was inclined to advise that centralized control over acquisition and disposition of war equipment should continue as at present.

Acquisition of components of munitions and allied production is in a somewhat different category from final war equipment and Departments concerned consider some improvement in procurement of these supplies is urgently needed. Does United States Lease Lend Administration's proposal offer any real prospect for improvement on present position? If you agree in substance with United Kingdom opposition to proposal we would appreciate any suggestions you can offer for procurement expedition. For instance do you consider Australia should be represented at the point of joint decision in determining whether goods should be sponsored for lease lend which we understand is Anglo-American Financial Committee? Would United States Government recognise our right to be represented on this Committee if we did not have direct representation for lease lend purposes with United States Government? Again would it be to our advantage to be represented on British Supply Council? We appreciate that some of the conflicting decisions which have been given by United States Administration and accepted by British and Australian organization may be due to weaknesses in both organizations. We feel, however, that all our efforts should now be directed towards removing that weakness so far as organization is concerned. The United States proposal appears unlikely to assist in this direction.

If you think it likely that the United States Administration will insist upon separate requisition and representation, we would like you advise us of your views on formula set out by Campbell to Eden (telegram No. 4499) on blanket consent for retransfers.

It is imperative that we receive reply as early as possible.

1 Lord Cranborne.

2 AA : A3195, 1941, 1.20858.

3 Minister at the U.K. Embassy in Washington.

4 U.K Foreign Secretary.

5 Copies of both cablegrams (dispatched 1 October) are on file AA : A3300, 106.

6 Australian representative on the British Purchasing Commission in the United States.

7 Not found, but see Clapp's letter of 13 October to R. G. Casey, Minister to the United States, on the file cited in note 5.

8 E.J. McCarthy(Assistant Sec., Commerce Dept) and Jacob Fletcher (Assistant Treaties Officer, Trade and Customs Dept) arrived in the United States in August 1941 as members of a delegation to explore the feasibility of undertaking formal negotiations for a trade agreement between Australia and. the United States. See file AA : A3300, 186.

[AA : A3196, 1941, 0.18626]