Your 906.

Jackson [1] discussed UNRRA policy and supply arrangements
generally with Prime Minister, Treasury and External Affairs. The
following are main points of agreement reached in course of
conversations:

(I) That Australia should complete as far as possible existing
contracts and commitments for supply.

(II) That the 10 percent of the original contribution which
Australia had undertaken to supply as 'free funds' should revert
to the Australian supply programme except for small amounts which
might be required to be used from current administrative expenses
for such matters as transportation, freights, etc.

(III) That we would allow an uncommitted contingency fund of
approximately 1m. to meet unforeseen expenditure and to enable
UNRRA to take up any relatively small but urgently required
available supplies.

(IV) That, subject to (I) and (III), it would suit UNRRA for us to
take up the suggested commitment for Wool. [2]

(V) That if there was any substantial amount of war surpluses
which are wanted by UNRRA and which are readily available over and
above existing commitments on surpluses the wool commitment could
be abated to a suitable amount as may be mutually agreed between
us.

2. Jackson stated that he was anxious that the locomotive contract
[3] should proceed and in discussion with Prime Minister, he urged
that everything possible should be done to provide raw material,
particularly steel, to ensure that time schedule for delivery is
adhered to. The furthest period Jackson could consider for
delivery of locomotives was September, 1947, and this was three
months beyond the scheduled date for closing down of procurement.

Jackson was advised to impress on both the contractor and
Department of Supply and Shipping the strict necessity of adhering
to a delivery schedule to conclude before September, 1947. We are
emphasising this point with Supply also.