135 Dixon to Department of External Affairs
Cablegram 261 WASHINGTON, 9 March 1943, 12.02 a.m.
Your telegrams 206  and 219 Monetary Policy. 
At his request I saw Berle today at the State Department. He referred to two documents the British C.U. and the American S.F.
and said that in preparing the United States plan and discussing it there had been no intention to go beyond a preliminary consideration of possibilities and that it was desired to have a general discussion with the United Nations. He said they had adopted what now became the common course and had consulted Russia and China, but that it was desired to have the views of experts of all United Nations.  Other plans would be open for consideration, but he felt that the United States and United Kingdom had the experience and facilities to contribute which make it natural to ascertain their expert views. Berle said that the matter was one which must be explored at the technical level before it could be discovered whether it was desirable to summon a conference at a higher level. He had seen the Canadian Minister who had nominated Plumptre. He asked whether there was any Australian here who could act and I named Brigden. I told of the interest which Australia had in any such plan and I mentioned our experience in fixing exchange with sterling during and since the depression and its effect on our rural economy and also our difficulties with sterling and dollar charges during the war. He said that the United States rural economy had had to be dealt with somewhat similarly.
No copy of the United States document has yet been received from the State Department but, except for some unimportant verbal alterations, the document sent by Brigden under Chancery series 92/43 in Air Bag No. 9/43 despatched March 2nd may be accepted as correct and the accompanying notes mention certain defects from our point of view.  The American scheme appears open to objection from an Australian point of view because:-
(a) its control is based mainly on the holdings of a country's gold and foreign exchange, a basis which would give Australia a very small place indeed;
(b) it is restrictive rather than expansionist in basal policy and tendency;
(c) it would divest from the Australian Government authority to determine the rates of exchange with other countries and to control exchange transactions, and without any certain compensatory advantages it would place control in the hands of directors of the fund;
(d) it makes no plan or scientific attempt to deal with the effect produced on the position of other countries by accumulation of exchange in the hands of a creditor country.
Later today Brigden and I saw Phillips and asked for further information about the consultations. He said that Russia had given no answer beyond asking for a generous supply of copies of the United States proposal; that he thought China had said nothing significant and that he believed the State Department would ask each country to provide an expert in Washington for consultation, allowing about six weeks' notice, and would attempt at the beginning to deal with each measure separately, summoning a joint conference when and if they felt hopeful of obtaining agreement.
Our impression is that while the United Kingdom Treasury have no illusions about the defects of the United States scheme and are convinced of the superiority of Keynes' plan they will not offer stiff resistance to the United States scheme unless some or all of the Dominions demand it.