Your V.738 has been examined. [2] The action now being taken by
War Production Board and Office of Lend Lease Administration with
respect to these non munitions controlled materials opens up
matters of vital importance to Australia and may well compel us to
reconsider question of separate representation for Lease Lend
purposes in Washington. It is appreciated, however, that this
aspect would require careful preparation of all relevant data for
the Government as well as an up-to-date appreciation of prospects
of attainment if separate representation were decided by the
Government to be desirable.

It is necessary that whilst this aspect is under consideration you
should be sufficiently instructed to enable you to speak
authoritatively on proposal now made by Lend Lease Administration
and the consequential plan propounded by the Chairman, British
Supply Council.

The fundamental principles on which our procurement of these
United States supplies should be based are:-

(1) We should never allow ourselves to be placed in a position
where General MacArthur, United States Army and Lend Lease Mission
cannot assist in ensuring to Australia:-

(a) reasonable allocation;

(b) urgent treatment in special cases.

We should avoid placing ourselves in a position where such
particular and general support would be rendered ineffective or
where it might be impaired due to diffidence on part of War
Production Board or Lease Lend Administration to interfere in what
might be regarded as purely Empire consideration after global
allocation had been made.

(2) We should avoid being placed in position where allocations of
these United States materials should be controlled directly or
indirectly by or from London.

(3) We should ensure that our needs should be presented by
representatives who are thoroughly experienced with the classes of
goods required and who are familiar with basic principles and
procedural requirements established by United States Government.

(4) We should establish principle that such portion of our
requisitions as are required by United States services operating
in these areas should not be debited against British or Australian
allocations.

We consider Australia is in special position by virtue of General
MacArthur's position as Commander in Chief and we cannot accept
any arrangement which would preclude him from making direct
representations on Australian supply problems through United
States War Department in cases where he might feel it necessary to
do so.

Global allocations to the Empire as a whole may engender the
feeling amongst Lend Lease Administration, War Production Board
and United States War Department that they cannot take special
steps to aid Australia without exposing themselves to the charge
that they were participating in or taking sides in Empire
squabbles or arguments. Whilst saying this we do not disagree with
your view that for the time being it may be preferable to agree
(but with appropriate safeguards) to proceed on the basis
suggested by the Chairman of the British Supply Council in order
to ensure that various units of Empire should first have the
opportunity of coming to full agreement amongst themselves on the
allocations.

However, it is important that in the event of disagreement and the
matter being one which we would regard as vital, then you should
make reservations that an appeal to the United States Authorities
should not be denied to Australia nor interpreted as involving
United States Administration in refereeing Empire disputes.