LONDON, 18 July 1949
SECRET Notes on Discussion with Mr. S.G. McFarlane, Savoy Hotel, London, 18th July, 1949
Present-Dr. H.C. Coombs, Messrs. S.G. McFarlane, F.H. Wheeler, J.B. Wright 1. Mr. Wheeler outlined the origin of the matter for discussion:-
(a) the pressure for sterling devaluation, (b) the possibility that at the time of any such sterling devaluation the Australian Government might decide that the Australian economy could not stand an appreciation of the A to the full extent of the sterling devaluation or, perhaps, could not stand even a partial appreciation. This would mean that Australia would need to propose to the I.M.F. a change in the par value of the A, (c) the likelihood that any change in the parity of sterling would be proposed and adopted over a week-end and the possibility that, unless the U.K. consulted Australia in advance, there would be very little time for Australia to take similar action, (d) the desirability, therefore, of having factual material available to the Australian Director in order that he might be able immediately to consult the Fund on receipt of cabled or telephonic instructions from the Australian Government, (e) five documents had been prepared covering various aspects of the Australian economy relevant to this question and these were being handed to Mr. McFarlane in order that he might examine them and see whether they would form a suitable basis. It would be intended to keep them up to date by periodical revisions of the essential facts and figures. The headings of the documents were (1) Internal Finance (2) Prices and Costs (3) Balance of Payments and International Reserves (4) General Economic Situation (5) Banking and Money Supply.
The order had no significance and the documents had been kept separate in the interests of secrecy.
12. The related question of a Fund drawing by Australia was discussed and it was agreed that not even a preliminary sounding should be made by Mr. McFarlane until possibly September and not in any case until matter had been determined by Cabinet and checked through London.