303 Department of External Affairs to Dixon

Cablegram 1283 [1] CANBERRA, 21 October 1943

SECRET

Your 1150 Reciprocal Aid. [2] Please convey the following reply to United States authorities and also inform United Kingdom officials.

1. Commonwealth Government has given careful consideration to the request of the United States Government for the extension of Reciprocal Lend-Lease to include raw materials and foodstuffs imported from Australia as set out in the Aide Memoire handed to the Australian Minister in Washington on 6th October, 1943. [3]

2. The Commonwealth Government notes that the Reciprocal Aid rendered to the United States Forces in the South-West Pacific Area is deeply appreciated. Requests under the present agreement have recently assumed much larger proportions and, for the present financial year, expenditure is expected to reach close on 100m or one-sixth of our war expenditure.

3. The provision of Reciprocal Aid under the present arrangements in conjunction with the requirements of our own forces and other essential commitments is imposing such a heavy strain on our very limited resources that we are already faced with a serious manpower shortage which will be intensified as the Allied Forces based on Australia grow and the demands under the present Reciprocal Lend-Lease Agreement increase.

4. After a full examination of present and prospective commitments the Commonwealth Government feels that these commitments are so great and our manpower position so acute that Australia has reached the practical limits of the contribution it can make by way of Reciprocal Aid. The Commonwealth Government is therefore unable to agree to an extension of Reciprocal Lend-Lease along the lines proposed by the United States Government which would commit the Commonwealth in principle to the provision of Reciprocal Aid in a new field involving an unspecified number of commodities.

5. It is recognised, however, that circumstances may arise in which the United States Government would desire to submit a special request for a particular commodity and in such circumstances the Commonwealth Government will be prepared to consider at the time and in the light of existing conditions supply by way of Reciprocal Lend-Lease. [4]

1 This cablegram was repeated to the Dominions Office as no. 277 in response to a message forwarded by Bruce on 18 October (cablegram 10350) which advised that the U.K. Govt understood the Commonwealth Govt's difficulties but that they were anxious 'that in interests of doctrine of "pooling of resources" the response to United States approach should be a favourable one'. Both cablegrams are on file AA:A2680, 38/1942.

2 Document 291.

3 See file AA:A2671, 348/1943.

4 The decisions set out in this cablegram were taken at a meeting of War Cabinet on 19 October (see AA:A2673, vol. 13, minute 3114).

[AA:A2671, 448/1943, SUPPLEMENT 1]