Since our delegation returned we have been giving urgent attention to the recommendations of the London Financial Conference.
The re-examination of our dollar import budget with a view to effecting the maximum practicable savings has not yet been completed. But it has gone far enough to confirm that for the reasons outlined in London by Mr. Dedman it is impossible for us to reduce our import outlays in 1949/50 to a sufficient extent.
Therefore we have been forced to consider seeking alternative sources of dollar finance in the current financial year and as intimated by Mr. Dedman to the Chancellor of the Exchequer we propose making an early approach to the monetary fund for dollar drawings.
I am confident as indeed we have already been assured that we will have your full assistance when we make our request upon the fund and we would be grateful at this stage for any advice you can give us as to timing and procedure in making that request.
When the subject was discussed in London with the Chancellor he advised an early approach. In subsequent discussion the view was put forward that it might be preferable to defer an approach to the fund until E.R.P. allocation to the United Kingdom for 1949/50 had been finally determined. The consideration behind this was that if it happened to become known that a member of the sterling area was seeking dollars from the fund that portion of United Kingdom aid which it was assumed would be applied to the deficit of the rest of the sterling area might be reduced.
I appreciate the importance of this consideration. I must however also keep in mind that Australian Parliament will be resuming on 7th September. Parliament will expect a clear and unequivocal statement of policy from the Government and it is politically necessary that I should be in a position to make such a statement.
Accordingly I would very much prefer to approach the fund with the least possible delay.
I should be grateful if you could let me have an expression of your views as soon as possible.