156 McFarlane to Chifley

Letter LONDON, 9 July 1947

AIR MAIL PERSONAL

Sterling Balances I welcomed your telegram 2804 which confirmed my own reactions and gave me confidence for my further talks. Bridges gave me a dinner on Monday night at which Eady and others were present. The atmosphere was very friendly, and following the dinner we talked for two hours on sterling balances. I said that I was greatly disappointed with the Treasury letter and would have to be frank.

As a response to my representations, the letter rather reminded me of the description of Mrs. Simpson's hat. They hadn't heard it so I had to relate it-'three bows, no crown, turned clown all round'.

This made a bit of background, so I proceeded to deal at length with the position as I saw it, and concluded by saying that the proposals were unacceptable.

2. I then put forward a suggestion for an entirely different approach, which I felt would be simple and effective, and hoped they would seriously consider it. My idea was a high level letter to you, which would embody suggestions as to how Australia could help, but should leave you [practically] [1] free to exercise your own judgment. It is outlined in my report attached. They accepted the idea without hesitation. I hope this will meet with your approval and I will co-operate in the drafting of the letter.

3. I am attaching an official report of the talks in order to put on record what I said and their reactions.

4. At the close, I asked questions on other subjects because the opportunity was too good to be lost, and I will send some notes later.

5. I had personal apologies from Bridges and Eady for not having contacted me before, but everything is now on a better basis. I think it is only fair to say that they are having a very sticky time, but the top men should have come into the picture earlier.

6. I might add that when I had waited some two to three weeks without hearing anything I spoke to Mr. Beasley and he took the opportunity of a few words to Dr. Dalton, whom he met at a private dinner. I think this stirred them up and did not do any harm. I also had a friendly talk yesterday to Glenvil Hall, the Parliamentary Financial Secretary. This followed the word to Dr.

Dalton.

1 Altered by hand by McFarlane. The original word was 'pretty'.

[AA : AA1968/391/1, 96]