29 Mr L. R. Macgregor, Government Trade Commissioner in North America, to Mr R. G. Menzies, Prime Minister

Cablegram General 295 NEW YORK, 4 August 1941

Addressed to the Prime Minister, Mr. Menzies.

Reference Clapp [1] 2869 New York [2], which has just been brought to my notice; as constructive suggestions I recommend as follows:

- namely i. Advise that you request joint study of problem by full Australian Supplies Board. Feel sure that it is sound policy for you and your colleagues at Australian end and for us here to use Australian Supplies Board in America as a shock absorber.

2. Informal talks with individuals are inadequate. Accordingly meeting with full British Supply Council for Clapp and me could be sought immediately.

3. We to submit to full British Supply Council tabulated statement of material involved in bottle-neck with dates of requisitions.

4. United Kingdom should frankly submit to us similar statement of their position same material. Purpose would be to afford United Kingdom representatives opportunity of demonstrating their good faith in not monopolising more than their share of available similar material except where justification exists for so doing.

5. If, as you expected, the examination discloses that the United Kingdom authorities play fair with us, joint British-Australian interviews should be arranged with the appropriate U.S.A.

authority.

6. Approach to America should be considerate and with due appreciation of the magnitude of their task in placing unprecedented volume of orders for themselves and all the allies.

All American procurements have been greatly expanded. The mere fact that the initial 'Lease Lend' appropriation of seven billion dollars is practically exhausted necessitating new appropriation should indicate that there has been a vast actual placement of contracts. The questions at issue are whether we have had our share of these contracts and as to what can be done to facilitate the expediting of any of our requisitions which are being delayed.

7. We should acquaint you with the facts as elucidated in discussions, firstly with the British and then with the Americans.

The outline of the facts could be accompanied by recommendations from full Australian Supplies Board, and in particular, it should be considered firstly whether we should ask you to request the Australian Minister [3] to make formal approach to the U.S.A.

Government, and if so, with what specific request and on what grounds. Secondly, whether we should depart from the line we have hitherto taken in accepting the British Supply Council as at present constituted, or whether we should ask you to press the United Kingdom for direct representation on it.

Thirdly, whether we should formally press also both with the British and U.S.A. authorities for representation on the British- American joint committee, change in policy of which committee materially influences the stability of your complementary policy in Australia, with an indication as to whether such a request is likely to be granted.

Fourthly, alternatively we to re-examine, but only in the light of the facts and not without definite supporting evidence, whether we should go so far as to advise you to make formal representations through Bruce [4] in London to the United Kingdom Government and through Casey here to the United States for plans of direct 'Lease Lend' to us from the United States instead of through the U.K.

under transfer to us as at present. We to indicate after re- examination whether or not such a proposal would be feasible.

Fifthly, or whether we should ask you to telegraph the United Kingdom Government saying that we are operating under a system of requisitions to the U.S.A. through the appropriate U.K. mission, but that we are experiencing some difficulty; that we will continue to give the system a further trial, but that if the difficulty continues we may require to ask for U.K. support with the U.S.A. authorities in a system of direct requisitions to the U.S.A. departments concerned without any intermediaries.

8. The President [5] has left on a week's cruise. Hopkins [6] has not returned from Moscow. Purvis [7] is in London. Steady and reasoned tackling of the problem is likely to be more productive than an irritating protest. In any event, even if you instructed an exasperated protest on the representations before you, we have to come down to a reasoned examination to obtain a solution.

9. Before you reply, suggest your advisers peruse the President's first report to Congress upon 'Lease Lend' sent by me to your Department under cover of memorandum 41/36 dated June 30th. [8] The report is in pamphlet form. Note particularly the terms of the President's letter of transmittal. Also page 25 clause 2(a), page 27 clause 6, page 33. Note reference in paragraph 6 of this telegram to progress which has been made in the absorption of appropriation since the President's June report to Congress. We should bear in mind the weaknesses of the U.S.A. constitution in its division of jurisdiction between the administration and Congress. Frequently administration officials are all out to help us, but they require to have regard to probable criticism in Congress.

MACGREGOR

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

2 Document 30.

3 R. G. Casey.

4 High Commissioner in the United Kingdom.

5 Franklin D. Roosevelt.

6 Adviser to Roosevelt. Hopkins visited Moscow from 30 July to 3 August to discuss U.S. aid to the U.S.S.R.

7 Chairman of the British Supply Council in the United States.

8 Not found.

[AA : A3195, 1941, 1.14260]