Together with Beasley I saw Cripps on Monday afternoon and
informed him of substance your proposed reply on question
negotiations with United Kingdom. [1] He expressed himself as well
satisfied with our proposals and suggested that we should proceed
with early examination of issues involved with British Delegation
in Geneva. He is inclined favour listing of the negotiations in
Geneva, but agrees that before a final decision made, views of
other Commonwealth countries particularly Canada should be sought.

We will arrange British Commonwealth meeting here for this
purpose. I raised with him question of unbound reductions [2] and
while he indicated that he would wish discuss matter with his
officers, he could see advantages from Commonwealth point of view
in limiting offers on items not covered by foreign requests to
reductions without binding and recognised that it might be in
British interest to accept reductions in this form. I suggested
that our first step should be to examine United Kingdom requests
on items covered also by foreign requests and then proceed with
consideration of other requests.

When we raised question of wool, Cripps commenced by expressing
some surprise that we had anticipated a full 50 per cent
reduction. As we had heard this view previously from certain
British officers in Geneva, I thought it well to reply forcibly
that quite apart from economic justification for such a reduction
and its general consistency with United States undertakings we
felt that we were entitled to such a reduction because we had been
offered it in negotiations which commenced in 1941. We reminded
Cripps also that those negotiations did not reach finality largely
because of attitude taken by United States that it would be better
to defer them to form part of multilateral negotiations and that
in this attitude they were influenced by British views. We pointed
out that if those negotiations had been permitted to reach
finality, we would now have been seeking a second 50 per cent
reduction. Generally in relation to wool we (A) outlined case as
we have presented it to Clayton, (B) delivered Prime Minister's
personal message relating to political importance of question [3],
(C) drew his attention to extremely difficult implications for
Commonwealth as a whole if Australia and South Africa were unable
obtain acceptable agreements and therefore were forced to withdraw
their concurrence to modifications of preferences in United
Kingdom market, (D) expressed view that immediate purpose was to
test to full firmness of present United States attitude and that
this can best be done if British countries all make it clear that
United States attitude threatens a breakdown of whole set of
negotiations and indeed Charter discussions and that
responsibility for such breakdown would lie with United States.

In reply, Cripps stated that he recognised t[he] full economic and
political importance of issue to Australia and that United Kingdom
was anxious to help. He undertook that his delegation would
emphasise in their discussions with United States widespread
implications of United States refusal meet our request and also
take up matter personally with Clayton whom he expects visit
United Kingdom during next two weeks.