136 Cranborne to Commonwealth Government
Cablegram 107  LONDON, 5 May 1944, 9.45 p.m.
Your telegram 101, repeated New Zealand 80. 
1. We note the position of Commonwealth Government in relation to statement of principles for International Monetary Fund and the views expressed. Arrangements for proposed International Monetary Conference are still indefinite and we shall telegraph further in reply to paragraph 5 of your telegram as soon as possible.
2. As regards paragraph 4 of your telegram we instructed our Representatives at Washington to sound United States Treasury and State Department in consultation with Sir Owen Dixon in regard to the suggestion that employment policy should be included in the agenda of any conference on the monetary plan and to say that we shared the view of the Commonwealth Government that this would be extremely useful. The approach was made on these lines but our Representatives found that the United States officials hold very strongly the view that it would not be appropriate or desirable to discuss the draft employment agreement  at the Monetary Conference. Their reasons are briefly as follows- (a) Problem of employment is more than a question of monetary policy and it would be a mistake to create impression that solution could be found by monetary means alone which they thought would be inevitable result of including employment policy in agenda of Monetary Conference.
(b) Such a proposal would enlarge Monetary Conference and destroy its present design of drafting more detailed proposals on monetary arrangements.
(c) Political difficulties would arise in United States if opponents of international monetary arrangements were presented with opportunity of raising cry of deficit financing which they assuredly would do if employment policy and monetary proposal were discussed at same Conference.
3. American officials agree that question of employment policy properly belongs to Article VII discussions but think that best approach to problem of employment is to begin with a Monetary Conference.
4. Meanwhile we note that Australian Government Delegate at I.L.O.
Conference at Philadelphia has put forward proposals reference International Employment Agreement.  We shall be glad to keep in touch with Commonwealth Government on the matter but it appears there is no further step we could usefully take at the present time.