My telegram No. 604 of 19th September. [1] Post War Economic
Talks.

In determining the personnel and scope of your representation at
the proposed forthcoming conversations it may be useful for your
Government to receive a clear[er] indication of the agenda of the
proposed conversations than was possible at the date when telegram
No. D.383 of 26th August [2] was sent.

Since the despatch of my telegram No. D.259 of 22nd May [3], which
outlined in general terms the nature of the instructions we should
give to our experts in the conversations which were at that time
anticipated, proposals have been prepared by the Treasury in
regard to the group of topics referred to in paragraph 5(a) of
that telegram under the general description of 'proposals for an
International Clearing Union for establishing a new system of
International currency associated with gold for post war
purposes'.

These proposals, which have received Cabinet approval as a basis
for informal discussion with the United States Authorities, are
all of a far reaching character and are being discussed at an
early stage of consideration of post war policy, because, if
adopted, they will provide a pivot around which much else could
turn.

Although, as stated in my telegram No. D.383, it has so far been
impracticable for the preliminary conversations to take place
there has been some informal and unofficial discussion between Sir
F. Phillips and the United States Treasury and State Department.

In the course of these discussions a document outlining these
'clearing union' proposals has been communicated to the United
States Treasury and the State Department in Washington informally,
but with the indication that if circumstances had not delayed the
opening of the discussions foreshadowed in Article VII of the
Mutual Aid Agreement, these proposals would have been put forward
as a basis for discussion officially.

They are now under preliminary and informal discussion between Sir
F. Phillips and the American Departments and we understand that
their reception has, on the whole, been sympathetic.

Before we proceed to a further stage in discussion with the United
States, which is likely to take place after the American
elections, we should greatly value more intimate consultation on
the proposals with representatives of the Dominions as already
explained at an informal level and without the commitment of any
Government being involved.

You will, however, appreciate from what has been explained above
that the proposals are of the highest importance and have already
reached a considerable degree of definition in draft. We should be
most reluctant to find ourselves carried past the initial stage
before we had had the advantage of a personal exchange of views
with representatives of Dominion Governments.

There are certain other matters which we may also be ready to
discuss with Dominion representatives, in particular, methods by
which prices of primary products might be stabilised. But these
are not so far advanced as the proposals for the Clearing Union.

It remains very desirable that the proposed conversations should
take place without publicity. [4] Such publicity might embarrass
the United States Government at a time when elections are
impending.

It would also be unfortunate if a misleading impression were
created that the Governments of the British Commonwealth were
attempting to establish a common Empire front, vis-a-vis the
United States. We should be very grateful if we could have
earliest possible reply as to Commonwealth representation and
suitability of proposed date. [5]