38 Tange to Burton

Letter [LONDON], 14 July 194[9]

PERSONAL

After 36 hours in London I am able to give you an impression of the course of the financial discussions.

The position is an unsatisfactory one, and the first day's discussion was futile. This is not unexpected at meetings, but the important thing on this occasion is that the British intend the Conference to last only six days. (Cripps is going away for medical treatment.) I do not believe that the meetings will in fact finish within this time, but the answer will be known by the time you receive this letter.

We went to the first day's meetings expecting to learn- (a) The significance of the Cripps-Snyder-Abbott communique and what the United Kingdom expected to get out of it;

(b) The basis on which the United Kingdom propose to approach the United States in September on the broad lines of a permanent solution to the present disequilibrium.

In fact, Cripps invited the Dominions successively to outline their views on the long-term problem, and during the final ten minutes of the day's meeting summed up the discussion as tantamount to an endorsement of the communique and tentatively suggested that the final outcome of the meeting might be a public expression of endorsement.

[matter omitted]

Under other circumstances I would this morning have proposed that the Head of this Delegation go direct to Cripps with the proposition that we should be told precisely what the United Kingdom hopes to get out of the United States by way of a long- term solution of this problem; what particular advantage in the United States the United Kingdom hopes to purchase with a general declaration by the British Commonwealth in favour of the Snyder communique: and that, in general, the British should be more frank.

However, I would have grave misgivings about the results of such an approach in the absence of our own Minister or the Prime Minister, so that it will fall to the officials to do the best they can, and we have started work already on the Canadians in an endeavour to shake their confidence in the maintenance of economic stability in the United States. Remarkable reliance is being placed on Truman's declaration of intentions by both Canadians and the United Kingdom.

To sum up, the position is, at this stage of the Conference, that the British hope to achieve 25 per cent cuts in imports in order to hold the reserve line in 1949-50 and to obtain a pleasing declaration of long-term objectives to show to the Americans. What they hope to get out of the Americans (other than a 'favourable climate of opinion') no one is able to say. My view, therefore, is that Australia should not subscribe, at least at this stage, to the principles in the communique, particularly because it contains a reaffirmation of the principle of non-discrimination. There is no real commitment involved. But it is presumably intended to make someone believe that a commitment is involved, and that someone is presumably the United States Congress. There being no assurances by the United Kingdom that they are getting anything at all from the United States to contribute towards a longterm solution, it must be contemplated that sooner or later non-discrimination will have to be definitely rejected. At that stage general statements of principles such as the one proposed, and which have been accepted by Congress, will appear nothing less than a breach of obligations by ourselves and other members of the British Commonwealth. In other words, if nothing tangible is to be gained by reaffirming principles, it is better to say nothing.

[AA: 4311/10, 1]