520 Dr H. V. Evatt, Minister for External Affairs, to Commonwealth Government

Cablegram ES52 WASHINGTON, 6 June 1942, 8.30 p.m.

Lend-lease.

(1) I have seen the draft of the exchange of notes on reciprocal lend-lease proposed by the State Department [1] which I understand has been approved by the President. [2] It is very comprehensive but I see no reason to object. Australian obligations must be interpreted reasonably from time to time but this is implied. I suggest that you authorize me to state that you will favourably consider the reciprocal lend-lease proposal in principle.

(2) In the meantime the United States suggest a separate master agreement on the lines of the United States-United Kingdom Agreement of February 23rd and draft on reciprocal lend-lease assumes that such prior agreement will have been made. If you concur it will be necessary to authorize me to sign. China and other United Nations will sign in the same terms as the United States-United Kingdom Agreement. There is no reason why we should not sign separately.

(3) Our original intentions were to provide all we could by reciprocal aid but we wanted the same treatment for ourselves. The new United States document sets no limits on United States supplies and I understand we have lately been getting more supplies under lend-lease.

(4) It is impossible to bind ourselves or any United Nations to specifically perform any particular undertaking and I favour the broad terms of United States draft to any attempt at detail. Each Government must interpret its obligations and discuss their practical effects as circumstances change, including of course effects on internal budgets and external liabilities.

(5) My arrangements with Kingsley Wood [3] (following on Robinson's [4] discussions with the Treasury) in London have in my view disposed of the problem of our overseas balance as far as it can be dealt with under war conditions, and I understand that you have accepted that position. I see no reason for raising the question again here but your definite concurrence with this view seems desirable.

(6) I feel that we should lead and not appear to follow in these matters of reciprocal aid, and that our early concurrence with the present United States proposals as to reciprocal lend-lease is highly desirable. The exact terms of the draft are open to variation but they are well phrased.

Doubtless the United States would accept a clause safeguarding our right to interpret details or limits, or the special position of British countries inter se if either is desired. A clause might state explicitly that the note, if acceptable, will be followed by a supplementary memorandum on application of its principles to Australia.

(7) The immediate problem is the conclusion of the master lend- lease agreement and it should, I think, be signed at once with an intimation that reciprocal lend-lease is being favourably considered.

1 See Document 512.

2 Franklin D. Roosevelt.

3 U.K. Chancellor of the Exchequer.

4 Australian businessman and adviser to Evatt on his overseas mission.

[AA:A981, USA 184]