Information received from Casey [1] and Macgregor [2] indicates
that representatives of British Ministry of Food are already in
United States for purpose negotiating on Lend-Lease programme. We
gather that 50,000 tons cheese, 100,000 tons of dried milk, 80,000
tons of pork, 100,000 tons of bacon, 45,000 tons of raisins and 1
million cases eggs are already in mind for transfer to United
Kingdom.

We think this is admirable, but it disturbs us to think that it is
the reason for curtailment of imports from Australia. For example,
we hear that ready accessibility of bacon from United States under
the new conditions is the reason for sudden cancellation of orders
for baconer carcasses specially produced in Australia because
United Kingdom Government expressed wish for them. Our total
supply of pig meats, including baconers, was to be 25,000 tons for
the year. The exclusion of baconers is of slight moment to United
Kingdom but a severe blow to Australian industry.

We know that if shipping were available United Kingdom could do
with food supplies from both United States and Dominions. I feel
we must fight hard against the damage to our economy which the
proposed restrictions would cause. Unless we do so United Kingdom
will naturally make the arrangements which suit her best without
realizing the effect on us. If we acquiesce, our economic
interests will be damaged, and our war effort weakened.

Everything depends on shipping. The prospects of increased tonnage
resulting from United States co-operation seem very favourable,
and we have always understood that output of merchant shipping
construction in United Kingdom and elsewhere would greatly
increase early this year.

The seriousness of shipping position is always stressed but never
explained. It constitutes a great arguing point in many ways. For
example, it can be argued that food ships should not go to
unoccupied France while the British meat ration is reduced, and
shipping losses are high. Furthermore, the urgency of American
help can be more strongly stressed when the shipping situation is
displayed in its worst light.

Greatly trust you will be able to secure some firm understanding
of their willingness to buy our surplus products. They did this
for some products last war. It is more necessary to us now because
of great development our export industries. If you succeed on the
principle before you leave it will be a great achievement, will
greatly help Bruce [3] after you leave, and will be best assurance
that they will use every effort to send ships for the goods.

Macgregor is very well informed of all our economic interests in
United States and is at present concentrating on the idea of a
trade agreement. He is acting as liaison on Lend-Lease programme
as it affects us.