You may remember that, when I reported to the Government on the
Bretton Woods proposals [1], I was, on balance, in favour of their
acceptance by Australia. That was on the assumption as stated in
paragraphs 41 and 62 of my report (paragraphs 22 and 43, pages 6
and 7 of the printed documents) that the International Monetary
Fund would not prevent us from imposing import restrictions to
correct balance of payments difficulties.

I notice, however, that the latest United States proposals on
commercial policy contain the following provision: 'Members may
use exchange restrictions or quantitative restrictions to limit
imports temporarily, during any period in which the International
Monetary Fund authorises such action to meet balance of payments
difficulties.' Although a different view seems to be taken in the
Dominions Office Circular Cablegram D1675 [1] of 11th September,
1945, this provision seems to me to mean that the International
Monetary Fund would be given authority not only to decide on the
facts whether or not balance of payments difficulties had arisen
but also in its discretion to authorise, or refrain from
authorising members to make use of quantitative restrictions to
limit imports.

Although part of the commercial policy proposals, this makes a
vital difference to the International Monetary Fund and would
seriously affect my judgment on the wisdom of Australia, from a
technical angle, accepting the Bretton Woods agreements.

I realise that, in the course of discussions, this particular
provision may be altered. I feel, however, that I should draw your
attention to the matter because it raises doubt as to whether a
final judgment can be made on the technical aspects of the Bretton
Woods agreements before we have all the plans for international
economic co-operation before us.

L. G. MELVILLE