Your telegrams 206 [1] and 219 Monetary Policy. [2]

At his request I saw Berle today at the State Department. He
referred to two documents the British C.U. and the American S.F.

and said that in preparing the United States plan and discussing
it there had been no intention to go beyond a preliminary
consideration of possibilities and that it was desired to have a
general discussion with the United Nations. He said they had
adopted what now became the common course and had consulted Russia
and China, but that it was desired to have the views of experts of
all United Nations. [3] Other plans would be open for
consideration, but he felt that the United States and United
Kingdom had the experience and facilities to contribute which make
it natural to ascertain their expert views. Berle said that the
matter was one which must be explored at the technical level
before it could be discovered whether it was desirable to summon a
conference at a higher level. He had seen the Canadian Minister
who had nominated Plumptre. He asked whether there was any
Australian here who could act and I named Brigden. I told of the
interest which Australia had in any such plan and I mentioned our
experience in fixing exchange with sterling during and since the
depression and its effect on our rural economy and also our
difficulties with sterling and dollar charges during the war. He
said that the United States rural economy had had to be dealt with
somewhat similarly.

No copy of the United States document has yet been received from
the State Department but, except for some unimportant verbal
alterations, the document sent by Brigden under Chancery series
92/43 in Air Bag No. 9/43 despatched March 2nd may be accepted as
correct and the accompanying notes mention certain defects from
our point of view. [4] The American scheme appears open to
objection from an Australian point of view because:-

(a) its control is based mainly on the holdings of a country's
gold and foreign exchange, a basis which would give Australia a
very small place indeed;

(b) it is restrictive rather than expansionist in basal policy and
tendency;

(c) it would divest from the Australian Government authority to
determine the rates of exchange with other countries and to
control exchange transactions, and without any certain
compensatory advantages it would place control in the hands of
directors of the fund;

(d) it makes no plan or scientific attempt to deal with the effect
produced on the position of other countries by accumulation of
exchange in the hands of a creditor country.

Later today Brigden and I saw Phillips and asked for further
information about the consultations. He said that Russia had given
no answer beyond asking for a generous supply of copies of the
United States proposal; that he thought China had said nothing
significant and that he believed the State Department would ask
each country to provide an expert in Washington for consultation,
allowing about six weeks' notice, and would attempt at the
beginning to deal with each measure separately, summoning a joint
conference when and if they felt hopeful of obtaining agreement.

Our impression is that while the United Kingdom Treasury have no
illusions about the defects of the United States scheme and are
convinced of the superiority of Keynes' plan they will not offer
stiff resistance to the United States scheme unless some or all of
the Dominions demand it.