Following from Melville for Minister for External Affairs and
Treasurer.

Employment Resolution
1. The Australian resolution on employment (telegram 15 [1]) has
been discussed in committee and referred to a drafting committee.

The proposal had some support, chiefly by the United Kingdom and
New Zealand and by several Latin Americans. The latter wished
however, to have some resolution merged with others recommending
an international, commercial and commodity conference. We
succeeded in having the subject considered separately.

2. In subsequent discussions there has been fairly general
opposition to a specific proposal that the countries be invited to
sign an agreement concurrently with the monetary agreement.

Generally, objections are on the grounds that while relationship
between the employment and monetary policy is recognised, any
resolution implying that acceptance of the monetary fund should be
contingent on the employment agreement goes beyond the terms of
reference of the Conference.

3. This is the expressed view of the United States and Canada.

[But there is no doubt that,] [2] as at Philadelphia the United
States objection is on political grounds. [3] Already the
weakening of the fund's control of exchange rates is thought
likely to intensify public hostility towards employment [4], and
the United States are unlikely to risk further provocation in
[intended] document.

4. We are to meet the American group shortly and will report
further. It is our present belief however, that the United States
will not agree to anything more than a resolution drawing
attention to the general significance of employment levels. We
shall, of course, not concur in such a resolution.