In connection with United States lease or loan bill, we have been
asked by the United States Administration to submit as a matter of
the utmost urgency estimates of our requirements not only of
warlike stores, but also of other commodities such as raw
materials, food, etc. to which the bill may apply.

There is no certainty yet as to what commodities other than
armaments may be held to be covered by the bill but we are
urgently preparing estimates of our requirements so far as the
United Kingdom is concerned.

2. Inasmuch that all Dominion orders for warlike stores and
aircraft and components have by arrangements previously made been
placed through, or in conjunction with, the British Purchasing
Commission, and Air Commission we are in a position to include in
our estimates for the Dominion requirements under these heads and
we assume that it will be in accordance with your wishes that we
should do so.

3. As regards estimates of other commodities required by the
Dominions from the United States, we should be glad to know
whether the Commonwealth Government would agree that we should
submit their estimates with ours. The figures are required within
the next few days and for the immediate purpose of ensuring that
the Commonwealth requirements will not be omitted, we have
notified the British Supply Council in North America for their
guidance a provisional figure of 15 million pounds sterling as
representing the estimate of the annual rate of expenditure by the
Commonwealth Government on such other commodities on the
understanding that we should immediately consult the Commonwealth
Government with a view of ascertaining whether they agree to our
including their estimates with ours and if so to obtain details in
support of the figure provisionally submitted. We should
accordingly be grateful for the earliest possible expression of
views of the Commonwealth Government.

4. If it is agreed that the Commonwealth figure should be
submitted with our own, we should be glad to have the considered
estimate of commitments to be incurred in respect of such orders
in the United States-
(a) from now until June 30th, 1941;

(b) for the period July 1st, 1941, to June 30th, 1942 under the
following heads:-

(1) Metals (including steel).

(2) Oil.

(3) Other raw materials.

(4) Food (including tobacco).

(5) Machinery.

(6) General manufactures.

(7) Motor vehicles.

5. It appears to us that in the present uncertainties surrounding
the application and working of the bill which are not likely to be
resolved for some time and in view of the present insistence of
the United States Administration that orders be placed through one
channel for other commodities as well as for warlike stores, there
is no satisfactory alternative [to] co-ordinating estimates of
requirements for sterling Dominions through the British Supply
Council in North America in the manner proposed.

6. If the Commonwealth Government agree to action on this basis,
the United Kingdom Government would proceed on the understanding
that whatever liability is assumed by the United Kingdom
Government in respect of the Commonwealth requirements, or [sic]
corresponding liability would be accepted by the Commonwealth
Government. In the case of any commodities not covered by lease-
loan bill we should, as at present, have to find dollars or gold.

For commodities covered by the bill, such conditions regarding the
future repayment or replacement as may in due course be imposed by
the United States Government would fall to be met by the Dominion
concerned. This aspect of the matter will need further
consideration as the situation develops and need not be finally
settled at present.

7. We trust in considering the estimate of requirements in
accordance with paragraph 4 above, the Commonwealth Government
will bear always in mind that the financial strain of our joint
war effort requires concentration on the acquisition of essentials
only and that the extremely difficult shipping situation will also
impose severe limitations on scale on which requirements can
usefully be estimated. Canada's position as being a member of
Commonwealth and an active participant in our war effort requires
special consideration to ensure that her economic staying power
shall not be damaged by the diversion to the United States of
orders which Canada is in a position to fulfil, and for our part
we do not contemplate that our programme of purchases in Canada
should be appreciably modified.

8. We should be grateful for the earliest possible reply to this
telegram in view of the urgent need of meeting the request of the
United States administration. We hope that the figures asked for
in paragraph 4 may reach us not later than Saturday 22nd February.