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Historical documents

480 Mr J. B. Brigden, Financial Counsellor at the Legation in Washington, to Department of External Affairs

Cablegram 671 WASHINGTON, 3 May 1942, 2.30 a.m.

Reference P.M.51 to Dr. Evatt April 2[1st]. [1] From Brigden.

Copies to Prime Minister [2] and Treasury.

(1) Full information on reciprocal Lend Lease sent by bag last
week and expected to have reached you now but have now learned
that bag delayed. [3] Following gives summary of position to date.

(2) Have commenced joint discussions with Acheson [4] for United
States, Phillips [5] for United Kingdom and Nash New Zealand
Minister. While Acheson is considering the position I am
conferring with the United Kingdom and U.K.-N.Z. on important
details. Expect further joint discussions with Acheson early next
week.

(3) On enquiry prompted from here concerning our adverse balance
Phillips has now been informed that United Kingdom Chancellor [6]
has seen Bruce [7] and agreed to suspend Australian liability for
debt arising from the war pending general consideration after the
war with the object of avoiding war debt all round. Meanwhile no
interest to accrue or to be paid, and adequate funds to be held in
London. These and other aspects to be discussed with Dr. Evatt [8]
in London. Presumably you have been informed more fully and
including the special position of Canada.

(4) United Kingdom position is that future obligations in dollars
are not now important but that debts aggregating from 400 to 500
million pounds a year are accruing to South America and other
neutral countries while British securities in those countries are
not readily realisable and adverse balances in currencies outside
sterling and dollar areas are an anxiety.

(5) Incidentally if there are to be post war debts, the United
Kingdom wants to know whether its debts to neutrals will be shared
and also its losses of foreign securities already sold or pledged.

This problem is chiefly between the United Kingdom and the United
States but it affects the outlook on claims by Australia and other
Dominions.

(6) Australia's position is recognised by both the United States
and the United Kingdom to be a special one and action already
taken in Australia is appreciated. Acheson is now considering ways
of meeting our position directly instead of through the United
Kingdom by retrospective transfer to Lend Lease of goods purchased
in the United States and possibly Canada also. I have suggested in
a memorandum en route to you that we should accept the assistance
we need if given by United States indirectly through the United
Kingdom if that method is preferred by United States.

(7) The United Kingdom had already asked for retrospective action
of this kind but the President [9] had said that the time was not
propitious. It would become more propitious when reciprocity can
be announced, and particularly for Australia.

(8) At present Australia and the United Kingdom agree that
reciprocal Lend Lease should be limited to supplies to United
States troops within the area of the supplying government i.e.

Australian territory, unless otherwise determined by the supplying
government. Mr. Nash objects to such limits but New Zealand is in
a different position. I think United States would consider the
limit quite reasonable especially as the scale of an offensive
based on Australia might be very large.

(9) As to works, the magnitude of the programme for Australia is
realized and caution in pledging unlimited acceptance of
obligation by Australia is understood.

(10) Extent of spending by United States troops is important in
relation to the dollar balance. United States expect pay and
allowances issued in local currencies will average from fifteen to
twenty dollars per soldier per month but the spending may be
rather more.

(11) On the other hand the United Kingdom is spending at present
per United States soldier the following pence per day:

8 on oil fuel and lubricants
15 on accommodation with fuel and light and
15 on rail transport. Food which is not provided by the United
Kingdom would probably bring the total to 60.

(12) These figures may be of interest to you for purposes of
comparison but your own estimates would help us here and any
advice on the points mentioned herein and in papers sent by bag.

Please give urgent attention to such papers. Both the United
States and the United Kingdom are anxious to reach agreement and
have so far accepted our view that as much detail as possible
should be left to local interpretation.

1 Document 472. The date was incorrectly cited in the original as
April 26.

2 John Curtin.

3 See file AA:A981, USA 182.

4 U.S. Assistant Secretary of State.

5 U.K. Treasury representative in the United States.

6 Sir Kingsley Wood.

7 High Commissioner in the United Kingdom.

8 Minister for External Affairs.

9 Franklin D. Roosevelt.


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