Food Conference. The Food Conference is now over and the general
feeling appears to be that it has been a very real success. [1]
You have received by this time a summary of the recommendations
which Dr. Evatt forwarded. [2] Four copies of the final act of the
Conference and the reports of the various sections are being
despatched to External Affairs with this mail. [3] Dr. Evatt was a
little concerned at the fact that one of the resolutions dealt
with the desirability of reducing trade barriers, as he thought
that this might possibly prove embarrassing to the Government
during the election campaign.

The attitude I took in this section was that the greatest emphasis
should be placed upon the maintenance of full employment in
industrial countries and the development of under-developed areas
and that progress in the reduction of trade barriers could be
expected only if these positive objectives were achieved. This
view was accepted by the section and I think is embodied quite
clearly in the resolutions. The resolution dealing specifically
with the reduction of trade barriers was introduced by the
American Delegation in terms almost identical with those used in
the relevant section of Article VII. I suggested that in order to
re-emphasize the prime importance of an expanding economy that the
resolutions should be introduced by the phrase 'progressively with
the achievement of full employment and the development of under-
developed resources' and that no specific reference should be made
to tariffs but to trade barriers generally, on the grounds that
tariffs were a legitimate means of maintaining employment when
world economic conditions were unfavourable and a legitimate
instrument of industrial development in less developed countries.

The Americans at first were willing to accept these changes but
subsequently withdrew their agreement on the grounds that this
would have meant going back on an undertaking to which the
majority of governments present were already committed in Article
VII. I pointed out that Article VII quite clearly envisages that
positive measures of increasing production and consumption would
go with measures taken to reduce trade barriers and, accordingly,
I suggested that the clause might be introduced with the phrase
'as part of this general programme'. The Americans accepted this
and agreed to drop the specific mention of tariffs.

In view of Australia's adherence to Article VII I feel that it
would not have been possible for me to press for further
modification.

There was a good deal of compromise in the final results and some
pretty loose thinking, but I am satisfied that the work of the
Conference lays down a basis for food and agricultural policy
which, if adopted generally by the participating countries, can
have very marked effects. The work done on the measures necessary
to improve agricultural efficiency and to make easier the
adaptation of rural production to changing conditions was, I
thought, particularly good.

There was one rather important division of opinion. The conclusion
reached in relation to the immediate post-war period was that we
must expect a very severe shortage of even energy giving foods
(grains, etc.) and that, therefore, it will be necessary in the
immediate post-war period to concentrate on the production of
foods for direct human consumption rather than for the rebuilding
of livestock herds, etc. It was thought that even where
substantial surpluses would be available, such as in wheat,
transport difficulties are likely to prevent European shortages
being overcome by this means, particularly if the Far Eastern
section of the war continues for long. Some people fear that if
this policy is pursued in Europe it will re-establish the practice
of substantial grain production and the opportunity will be lost
to place European agriculture on a basis which will make it
complementary rather than competitive with the agriculture of the
main exporting countries. It is a difficult question and in my
mind turns largely on the validity of the account of shipping
difficulties on which the Conference's judgment was based. I find
that there is some skepticism about this in other quarters which
think that it will prove possible to ship a much larger quantity
of wheat and other food products from the main producing countries
than this account assumed.

[matter omitted]

Financial Discussions. Dr. Evatt has cabled you to-day [4]
suggesting that a postponement of the London talks for a week be
sought so that I can attend these joint discussions on the
Stabilization Fund and Clearing Union plans. I have not yet
received anything formal from the U.S. Treasury but I understand
that they have made fairly substantial modifications to meet the
points we put forward in our discussions. I think it would be
worth while participating in these talks.

[H. C. COOMBS]