(1) After preliminary talk on November 14th Australian Supply
Council (self, Macgregor [2], Lormer [3] for Clapp and McCarthy
[4] and Watts present at my request) discussed Cosau 296 from
Prime Minister's Department today. After discussion Macgregor
stated that he felt that he could not commit himself to final
views for several days. In view of the urgency of your telegram I
am forwarding the following views concurred in by self, Clapp,
McCarthy, Watt. Will telegraph Macgregor's views as soon [as]
available. [7]

(2) We had seen Campbell's telegrams to Eden [8] and since the
receipt of your telegrams [9] have had the views of American
Lease-Lend representatives and British Supply Council.

(3) Lease-Lend officials state that their proposal, viz. that
requisitions should be submitted by Dominion representatives but
should be countersigned by the British Supply Council, deals only
with procedure. In particular they draw attention to the present
procedure under which requisitions are first passed by the British
Supply Council and (2) (even though there is personal contact
between Australian and American representatives) the actual
authority to supply Australia takes the form of a re-transfer from
the United Kingdom to Australia.

(4) Lease-Lend officials are not proposing separate agreements
between themselves and individual Empire countries. In reply to
specific questions American officials stated that their proposal
is designed merely to improve existing machinery. They state
further that:

(a) It would not affect Empire pooling arrangements for currency
'dollar pool'.

We need not stress the importance to Australia of maintenance of
single Empire dollar pool. Later if separate Lease-Lend agreements
were to be negotiable between individual British Dominions and
United States we think that continued existence of Empire dollar
pool might be threatened and, as South Africa is by far the
greatest contributor to the pool through her gold production, the
other Empire countries including Britain and Australia might be
adversely affected as regards dollar funds.

Although (see above) this does not arise in this instance it is
suggested it be kept in mind for the future.

(b) It would not involve or necessitate separate Lend-Lease
agreements with each Dominion.

(c) It would not affect present arrangements for determining
priority as between Empire countries where the latter are seeking
supplies in excess of totals available.

(5) South Africa, India and New Zealand have notified their
agreement with the United Kingdom that every effort should be made
to continue the present arrangements, but this may be due to the
fact that Dominions Office telegram 697 [10] assumes that matters
of high policy are involved although this view is apparently not
taken by American officials.

(6) We are inclined to think that the significance of proposed
change has been exaggerated and could have been settled in
Washington. We feel some doubt in resisting without qualification
proposals of the Americans, which, according to their statements,
have for their object improvements in organization only. If there
are other motives we think we would have to secure more evidence
that they exist before basing resistance on them.

(7) We are therefore of the opinion that on fundamental matters of
principle, e.g. those mentioned in paragraph (4) above, Empire
countries should act as one unit, and if the Government agrees
such a view should be communicated to Dominions Office. In stating
this view to United Kingdom it might be added that it is thought
that any question arising out of procedure which the Americans
might put forward and which has for its declared object
improvements in organization should be sympathetically considered
at Washington. It is suggested that the proposal in question comes
into this category and that it should be examined in detail here
purely on its merits.

(8) Answers to your specific questions (paragraph 2 your Cosau 29)
are as follows:

(1) No.

(2) Some slight improvement in this respect is possible although
not certain. Present machinery in this regard is being slowly
improved.

(3) Do not think this likely.

(4) No.

(9) As regards your suggestion that Australia might be represented
on Anglo-American financial committee, main function of committee
has been to supervise control of dollar credits, and it was
therefore vitally interested in the degree to which [Lease-Lend]
[11] might relieve the demand for dollars. Its influence is
probably diminishing. There appears now to be a tendency to reduce
the demand on Lease-Lend which involves an increase in demand on
dollars. We are following up question of desirability of
representation on the committee and will give you definite answer
to your question in a few days.

(10) We are definitely of the opinion that representation on
British [Supply] Council would be an advantage.

(11) In conveying view to United Kingdom that on all points of
policy or principle on Lease-Lend we would wish to work as one
unit, we would suggest you ask that consultation between United
Kingdom and Dominions take place before any commitments, even of a
tentative character, are made and that our representatives be
included in any preliminary discussions.