43 Dedman to Chifley
Cablegram F9 LONDON, 17 July 1949, 5.22 p.m.
IMMEDIATE TOP SECRET
10. From the foregoing  it will be seen that the Cripps-Snyder- Abbott communique does not imply any agreement on detailed policy or action. It is merely that in the light of frank exploratory discussions the United Kingdom feels sufficiently hopeful to reaffirm the ultimate objective of multilateralism and 'a one world economy' and to undertake the further negotiations in September. It is clear that none of the parties has worked out the particular proposals which it win pursue at the September talks, e.g. the six points;  given by the President of the Board of Trade are very general and vague. Nevertheless the Canadians feel that the talks with Snyder had great value. They have always feared that the United Kingdom would establish a second trading world through a series of decisions of expediency, and they feel that in June the United Kingdom was very near to attempting it deliberately.
11. The foregoing indicates a change in the United Kingdom outlook since Mr. Attlee's original message, and explains why the United Kingdom has sought for the Commonwealth Conference a reaffirmation of the objective of multilateralism.
12. During the discussions on the long-term problem and objective we have urged that the general lines of approach set out in the Board of Trade's six points should be broadened to include the working towards a geographical pattern of trade which could provide a basis for the restoration of equilibrium. In this connection we have emphasised the importance of East-West trade in Europe as a source of alternative supplies and of Japanese trade.
We have also exchanged views on how the various general lines of approach can be developed into concrete proposals. Officials are at present drafting an agreed Minute for the consideration of Ministers. United Kingdom thinking is, however, still in the general phase and it is difficult to gain any precise view of the concrete content of the September talks.
13. It is equally difficult to form any view on the likelihood of the United Kingdom and the United States taking adequate action to achieve the long-term objectives of multilateralism. The Canadians were encouraged by the American attitude in the recent talks and regard the internal economic programme in the recent Presidential message to Congress as a hopeful sign. On the other hand they are worried by the possible repercussions on American attitudes of the short-term dollar cuts and of the proposed medium-term measures such as conversion to non-dollar sources of supply. Undoubtedly one of the big immediate problems is how to put the inevitable emergency measures in a context which will not prevent the Americans from accepting a responsibility for necessary and adequate measures on their part to solve the medium and long-term problems.
14. We cannot feel optimistic about the possibility of adequate American action or about the possibility of other necessary measures. On the other hand, in view of the United Kingdom judgment on the situation and of Australia's great interest in multilateral trading, we would not wish to recommend that Australia urge that pursuit of the multilateral objective be abandoned. At least we gain a breathing space in which to reach a better understanding of the problem by the Americans.
21. The Chancellor did not question my explanation of the reasons why Australia could not effect in 1949/50 the 25 per cent saving proposed. But in commenting on New Zealand's exposition of its commitment problem the United Kingdom officials indicated that the position was so serious that planning could not in any circumstances be on the basis of a saving lower than 25 per cent.
Nevertheless we have not in these circumstances yet pursued the question of alternative finance.