148 Makin to Chifley and Evatt

Cablegram 1367 WASHINGTON, 2 October 1946, 7.50 p.m.



The Governors of the above organisations are now meeting in Washington. Following an earlier interview with Hugh Dalton, at his request, he dined with me last night. Inverchapel, Berendsen and Oldham were present also, and Brigden, who as official observer will report by telegram and airmail on all details. As you know, the United Kingdom Government is anxious that Australia should join and be represented by an executive Director.

In conversation, Dalton gave as his opinion that three important aspects of the present situation have changed the outlook since pre-war years. These are- (A) The present United Kingdom Government will remain in power for at least four years, during which the International Fund will be tested, and it will not hesitate to withdraw from the Fund at any time should the Fund attempt to impose any policy inconsistent with its own policy of full employment. This it could do immediately an occasion arose without penalty. No public statement of this kind will be made but the intention is a firm one which will persist.

(B) The Bank of England is now under the control of the United Kingdom Government and will follow policies consistent with the above.

(C) The Fund has now adopted the United Kingdom interpretation of a 'fundamental disequilibrium' designed to protect the position of a Member Government desiring a change in a rate of exchange to prevent unemployment. On this point Dalton made a further statement this morning in Plenary Session, which will be the subject of a later telegram.

Brigden will report results of present meetings by telegraph and will despatch all relevant papers this week.

It is clearly evident that there is a genuine desire for Australia to become a member of the Fund and to be represented by an executive Director, partly in recognition of Australian leadership in the field of employment policy, and while no formal postponement of election is practicable, I am assured that everthing possible will be done to delay action on the election of another Director until Australia has had an opportunity to decide her position.

[AA:A1067, ER46/12/2, i]