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317 Mr R. G. Casey, Minister to the United States, to Department of External Affairs

Cablegram 205 WASHINGTON, 4 February 1942, 12.29 a.m.


I saw Acheson [1] unofficially today on the subject matter of your
telegram No. 133. [2] State Department and Treasury are just about
to discuss this general subject. Acheson takes sympathetic and
sensible view. He explains however that United States
administration want to be able to say to their potential domestic
political critics that every country was doing everything it
possibly could by way of military and financial effort on its own
account and in the common interest. He says United States
administration want to be able to avoid criticism that it is lend
leasing everything it possibly can and that at the same time
American forces abroad have to pay cash for all their
requirements. He realizes our difficulty in meeting our own
constantly increasing war expenditure at home and abroad, and of
meeting American requirements in Australia as well. He wants to be
able to find a way round this obvious and easy criticism. He would
like to have some rough analysis of the 'works' (first line of
your telegram) and also some quantitative description of our
sterling and dollar commitments overseas, in order to see if it is
not possible to work out some indirect means whereby Australia can
meet the cost of American requirements in Australia and United
States can reimburse us by helping us to meet some of our other
overseas financial obligations to roughly an equivalent amount. He
suggested (quite unofficially) that we tell them what our dollar
obligations are, outside of what we expect to get under lend-lease
arrangements, so that they can see what dollar payments they might
be able to relieve us of. He even suggested that we say what our
sterling obligations are with the idea that something might
possibly be worked out between United States, Britain and
Australia, by which an offset would be arranged to meet the
approximate equivalent of the cost of American requirements in
Australia. He realizes that there is a limit to taxation and
borrowing to meet our out go [3] beyond which we cannot go with
safety, and that when this limit is reached some sensible means
must be devised of coping with the situation. It would be helpful
if you could reply on above within 48 hours. [4]


1 U.S. Assistant Secretary of State.

2 Document 314.

3 The original was here annotated 'as received'.

4 See External Affairs Dept cablegram 151 of 6 February on file
AA:A981, USA 181, i.

[AA:A981, USA 181, i]
Last Updated: 11 September 2013
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