Addressed to the Prime Minister, Mr. Menzies.

Reference Clapp [1] 2869 New York [2], which has just been brought
to my notice; as constructive suggestions I recommend as follows:

- namely i. Advise that you request joint study of problem by full
Australian Supplies Board. Feel sure that it is sound policy for
you and your colleagues at Australian end and for us here to use
Australian Supplies Board in America as a shock absorber.

2. Informal talks with individuals are inadequate. Accordingly
meeting with full British Supply Council for Clapp and me could be
sought immediately.

3. We to submit to full British Supply Council tabulated statement
of material involved in bottle-neck with dates of requisitions.

4. United Kingdom should frankly submit to us similar statement of
their position same material. Purpose would be to afford United
Kingdom representatives opportunity of demonstrating their good
faith in not monopolising more than their share of available
similar material except where justification exists for so doing.

5. If, as you expected, the examination discloses that the United
Kingdom authorities play fair with us, joint British-Australian
interviews should be arranged with the appropriate U.S.A.

authority.

6. Approach to America should be considerate and with due
appreciation of the magnitude of their task in placing
unprecedented volume of orders for themselves and all the allies.

All American procurements have been greatly expanded. The mere
fact that the initial 'Lease Lend' appropriation of seven billion
dollars is practically exhausted necessitating new appropriation
should indicate that there has been a vast actual placement of
contracts. The questions at issue are whether we have had our
share of these contracts and as to what can be done to facilitate
the expediting of any of our requisitions which are being delayed.

7. We should acquaint you with the facts as elucidated in
discussions, firstly with the British and then with the Americans.

The outline of the facts could be accompanied by recommendations
from full Australian Supplies Board, and in particular, it should
be considered firstly whether we should ask you to request the
Australian Minister [3] to make formal approach to the U.S.A.

Government, and if so, with what specific request and on what
grounds. Secondly, whether we should depart from the line we have
hitherto taken in accepting the British Supply Council as at
present constituted, or whether we should ask you to press the
United Kingdom for direct representation on it.

Thirdly, whether we should formally press also both with the
British and U.S.A. authorities for representation on the British-
American joint committee, change in policy of which committee
materially influences the stability of your complementary policy
in Australia, with an indication as to whether such a request is
likely to be granted.

Fourthly, alternatively we to re-examine, but only in the light of
the facts and not without definite supporting evidence, whether we
should go so far as to advise you to make formal representations
through Bruce [4] in London to the United Kingdom Government and
through Casey here to the United States for plans of direct 'Lease
Lend' to us from the United States instead of through the U.K.

under transfer to us as at present. We to indicate after re-
examination whether or not such a proposal would be feasible.

Fifthly, or whether we should ask you to telegraph the United
Kingdom Government saying that we are operating under a system of
requisitions to the U.S.A. through the appropriate U.K. mission,
but that we are experiencing some difficulty; that we will
continue to give the system a further trial, but that if the
difficulty continues we may require to ask for U.K. support with
the U.S.A. authorities in a system of direct requisitions to the
U.S.A. departments concerned without any intermediaries.

8. The President [5] has left on a week's cruise. Hopkins [6] has
not returned from Moscow. Purvis [7] is in London. Steady and
reasoned tackling of the problem is likely to be more productive
than an irritating protest. In any event, even if you instructed
an exasperated protest on the representations before you, we have
to come down to a reasoned examination to obtain a solution.

9. Before you reply, suggest your advisers peruse the President's
first report to Congress upon 'Lease Lend' sent by me to your
Department under cover of memorandum 41/36 dated June 30th. [8]
The report is in pamphlet form. Note particularly the terms of the
President's letter of transmittal. Also page 25 clause 2(a), page
27 clause 6, page 33. Note reference in paragraph 6 of this
telegram to progress which has been made in the absorption of
appropriation since the President's June report to Congress. We
should bear in mind the weaknesses of the U.S.A. constitution in
its division of jurisdiction between the administration and
Congress. Frequently administration officials are all out to help
us, but they require to have regard to probable criticism in
Congress.

MACGREGOR