239 Moore to Department of Trade and Customs

Cablegram Y2278 WASHINGTON, 22 November 1946, 8.37 p.m.

SECRET

1. We have been approached by UNRRA Headquarters, Washington, who desire to ascertain whether Australia would be interested in purchasing from them a quantity of material which Foreign Liquidation Commission has earmarked at Manus island for UNRRA.

2. We understand that UNRRA intended to ship these supplies to China for relief and rehabilitation purposes but have experienced difficulty in handling, loading, and shipping these supplies from Manus.

Furthermore ports in China are so congested that UNRRA are unlikely to continue with their original plan to ship these supplies to China.

3. UNRRA officials here estimate that the original cost of available supplies at Manus is approximately 20 million dollars but these are being taken over from the Foreign Liquidation Commission at a price of fifty cents in the dollar. We understand these supplies consist chiefly of hardware, paints, lumber, machinery, road equipment, spare parts for motor vehicles and other items which UNRRA plan to use for agricultural and industrial rehabilitation. UNRRA have suggested to us that they would consider selling supplies to Australia at one half their cost which would represent approximately 25% of the original cost to United States Government. UNRRA would accept payment in Australian pounds or by any other arrangement that was mutually satisfactory. We might add that the question of disposal to Australian Government has been cleared by UNRRA with the United States State Department.

4. UNRRA are sending a working party which should arrive at Manus Island 6th December. If there is a possibility that the Australian Government may be interested in the purchase of all or part of this property from UNRRA it is suggested that the Australian Government should send a representative to Manus to meet the UNRRA working party on 6th December. This party will be headed by Mr.

Lambert, Assistant General Counsel, UNRRA Headquarters, Washington, who has full authority to negotiate.

5. Would appreciate your comments immediately regarding UNRRA proposal also advise whether it is proposed to send Australian Representative to Manus to meet UNRRA working party, 6th December, so that advance arrangements for accommodation can be made. [1]

0 1 Brigadier L. G. Binns inspected the stocks at Manus Island but rejected UNRRA's offer. He reported that the components in which Australia was 'vitally interested' represented only a fraction of the total stocks and 'were in themselves strictly limited in quantity and generally poor condition'.

[AA:A1067, R46/1/3]