We have been studying the procurement and stock position of raw
materials which are required from United States and Canada. The
following appears to be the position.

(1) Whereas stock position of large number of commodities was
considered satisfactory twelve months or more ago and amounted to
nine, twelve and in some cases fifteen months' stock, we now find
general stock position is exceedingly low of goods required from
United States and Canada. In some cases stocks represent one, two
or three months' supply.

(2) Insistence by Lend Lease Administration that requisitions
should be based on a maximum of six months' stock will narrow the
stock position in an overall sense.

(3) The period taken for procurement which for most countries
appears to be a standard feature in United States is now much
greater than pre-Lend Lease.

You will appreciate that if there is any failure on the
Government's part to import ugently required raw materials during
election year such as the present it will have serious
repercussions. If large number of small industries or even if
several large industries have to dismiss employees because of lack
of raw materials the Government will come in for severe criticism.

We feel that we are fully justified in the circumstances in making
a joint appeal to you to ensure that the best possible case be
made for additional shipping to enable all available supplies to
be brought forward.

Up to the present we have been very fortunate in escaping losses
from submarine activity in the Pacific. In view of recent
developments, however, it is extremely unlikely that this will
continue, and therefore it is essential we have additional
shipping margin to ensure that replacements which may hastily be
made available can be shipped, otherwise a large number of
manufacturing programmes will become disjointed and others will
have to be stopped because of failure to import one or more
components.

Quite irrespective of the manner in which the views of the
respective parties have developed in this subject, we feel that if
a liberal interpretation were placed on availability of supplies a
good case could be presented for additional shipping.

We would appreciate a copy of this telegram being made available
to both Macgregor and McCarthy. Would suggest you also see
cablegram No. 4658 which deals with shipping priorities in greater
detail. [1]