Lend Lease in Stage II.

1. A number of telegrams have been exchanged with the Dominions
Office on the subject of the scope and scale of Lend Lease and
Mutual Aid in Stage II, i.e., the stage between the defeat of
Germany and the defeat of Japan.

2. Dominions Office telegram No. 250 [1] of September 19th gives
an account of the discussions between the United Kingdom Prime
Minister and the United States President on this subject at the
Quebec Conference.

3. A joint United Kingdom - United States Committee is to be set
up to consider the question and recommend to their Governments the
amount of Mutual Aid in munitions, non-munitions and services to
be provided for the most effective prosecution of the war. Pending
its recommendations no major decisions are to be taken by either
Government without the approval of the Committee as to programmes
of Lend Lease Aid.

4. It is expected that the Committee will soon get down to the
business of making detailed estimates of requirements and the
United Kingdom Government has suggested that, as a first step, the
Australian representatives in Washington be authorised to place
themselves in touch with the United Kingdom Minister Resident for
Supply immediately in order that discussions may be held to
determine the best procedure for ensuring that Australia's
position is taken fully into account.

5. We have already supplied the Dominions Office with estimates in
broad categories of the dollar value of our non-munitions
requirements in the first twelve months of Stage II [2] and we
understand that these estimates have been repeated to the United
Kingdom representatives in Washington. We presume you will be able
to arrange to obtain copies of our exchanges with the Dominions
Office from the United Kingdom Minister Resident for Supply.

6. It is our desire that all discussions with the United Kingdom
representatives on this question be handled as under:-

(A) Munitions requirements-matters affecting the provision of
munitions items in Stage II are to be handled through the
Australian Service representatives, i.e., the Chief of the
Military Mission, the Chief of the Air Mission and the Naval
Attache
(B) Non-munitions requirements-matters affecting the provision of
non-munitions requirements in Stage II are to be handled through
the Director-General, Australian War Supplies Procurement
(Macgregor), with the Assistant Director (Jacobsen) as an
alternate.

(C) General policy and Financial aspect-W. E. Dunk, Treasury
representative, who is at present en route to Washington by Air,
is to act as a representative to collaborate with the
representatives of the Service Munitions and Director-General,
Australian War Supplies Procurement on both munitions and non-
munitions items. He is to participate in all discussions and is to
be consulted on all telegrams and correspondence relating to this
question.

7. It is also desired that you keep personally in close touch with
the general trend of the discussions. It will be the
responsibility of the other representatives to ensure that you are
kept informed and that any questions that are of direct concern to
you are referred to you for advice.

8. Please notify the United Kingdom Minister Resident and the
Australian Officials concerned of these arrangements.