My telegram D. No. 383, 26/8/42  and connected telegrams.  Following on exploratory discussions here with Dominion experts last autumn, revised version of Clearing Union plan in form communicated to Dominion Delegates before their departure was given informally by Sir F. Phillips to United States Authorities.
Latter asked for elucidation on certain points and their reactions have since been awaited. We have now taken steps to communicate the plan also to Soviet and Chinese Governments and are proposing similarly to give text confidentially to European Governments in London with a view to informal discussion on a study circle basis, in which we hope that the representatives of Dominion High Commissioners here will take part.  2. Meanwhile the Americans have unexpectedly sent to us, the Soviet Government and Chinese Government a draft proposal for an International Stabilisation Fund. Covering memorandum states that this fund is only one of the appropriate agencies to deal with monetary and economic problems.
Memorandum anticipates that a draft proposal for an International Agency for capital reconstruction and development will be submitted (presumably by United States). It also discloses that United States are against a single agency for dealing with monetary stabilisation, relief, capital development, prices of primary products and other economic problems.
They believe that each Agency should be kept free of the extraneous duties for which it was not devised and is unsuited.
3. It is difficult to summarise United States draft proposal, but though draft has been sent to us without apparent relation to Clearing Union draft, the United States objections would appear, in general, to have much in common with our own, though method of approach is different and on certain points important issues of principle arise.
At first sight resemblances cover several important features which we had feared that United States might find difficult, owing to political reasons, e.g. acceptance of Exchange control for capital movements and provision for fixing exchange rates. On the other hand limitation of the liabilities of creditor nations is not well handled. We are sending you copies of United States draft immediately by air mail together with an analysis of the main points which we have prepared for convenience in comparing their draft with our own. 
4. Question arises whether United States draft could not be conveniently collated with Clearing Union draft into a single agreed document but preliminary examination suggests that this possibility could only be considered after several obscure points have been cleared up and several issues of substantial importance have been settled.
Our view is that it is not desirable to attempt this collation at present stage, before differences of substance have been thoroughly debated, and that best course would be for experts from United Nations concerned to be invited to Washington as soon as possible to discuss many points of difference between the two drafts. We have asked Phillips to put this suggestion to United States Authorities in discussing with them their ideas as to future procedure and will telegraph as soon as their reactions are known.