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Historical documents

1 Beasley to Chifley

Cablegram 3 LONDON, 8 January 1948, 5.45 p.m.

IMPORTANT SECRET

In view of the dollar position I was most concerned to realise
after reading C.R.O. [1] telegram D.8 of 5th January, that we have
been consulted at no stage during the financial negotiations with
Egypt. I immediately spoke sharply to the United Kingdom
authorities yesterday and Gordon Walker, Acting Secretary of State
for Commonwealth Relations, called on me yesterday afternoon to
express his profound regret and to assure me that he has taken
special steps to prevent a recurrence of this sort of thing.

2. The Australian press asked questions after publication of the
agreement and I was obliged to reply that we had not been
consulted.

3. Nimmo will be able to follow this type of question closely and
in any event I will get him to go into implications of the
agreement with Egypt. I quite realise and have been careful to say
that if consulted we may have had no objection to it.

4. In this case it seems to me that fault lies not with the
Commonwealth Relations Office but with the Treasury whose thinking
on relations between members of British Commonwealth is still well
out of date despite spirit for which Dalton [2] and Cripps have
appealed among members of British Commonwealth in dollar problem.

[3]

1 Commonwealth Relations Office.

2 Hugh Dalton, predecessor to Cripps as Chancellor of the
Exchequer.

3 Subsequently the Secretary of State for Commonwealth Relations
cabled the Australian Government to explain the background to the
negotiations. The UK Government had believed Egypt would take
certain steps if an agreement satisfactory to Egypt had not been
reached: a) Egypt would demand that the United Kingdom pay for
local currency, required for military expenses, in gold or
dollars; b) Egypt might demand dollars for its exports to the
United Kingdom; c) Egypt could demand payment of Suez Canal dues
in Egyptian pounds which it might refuse to supply except for gold
or dollars.


[AA: A1838, 708/13/8/1]
Last Updated: 11 September 2013
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