Your 1150 Reciprocal Aid. [2] Please convey the following reply to
United States authorities and also inform United Kingdom
officials.

1. Commonwealth Government has given careful consideration to the
request of the United States Government for the extension of
Reciprocal Lend-Lease to include raw materials and foodstuffs
imported from Australia as set out in the Aide Memoire handed to
the Australian Minister in Washington on 6th October, 1943. [3]

2. The Commonwealth Government notes that the Reciprocal Aid
rendered to the United States Forces in the South-West Pacific
Area is deeply appreciated. Requests under the present agreement
have recently assumed much larger proportions and, for the present
financial year, expenditure is expected to reach close on 100m or
one-sixth of our war expenditure.

3. The provision of Reciprocal Aid under the present arrangements
in conjunction with the requirements of our own forces and other
essential commitments is imposing such a heavy strain on our very
limited resources that we are already faced with a serious
manpower shortage which will be intensified as the Allied Forces
based on Australia grow and the demands under the present
Reciprocal Lend-Lease Agreement increase.

4. After a full examination of present and prospective commitments
the Commonwealth Government feels that these commitments are so
great and our manpower position so acute that Australia has
reached the practical limits of the contribution it can make by
way of Reciprocal Aid. The Commonwealth Government is therefore
unable to agree to an extension of Reciprocal Lend-Lease along the
lines proposed by the United States Government which would commit
the Commonwealth in principle to the provision of Reciprocal Aid
in a new field involving an unspecified number of commodities.

5. It is recognised, however, that circumstances may arise in
which the United States Government would desire to submit a
special request for a particular commodity and in such
circumstances the Commonwealth Government will be prepared to
consider at the time and in the light of existing conditions
supply by way of Reciprocal Lend-Lease. [4]