I see I must go back to your letter of 10th March, to pick up the
thread of comment, so I shall confine myself to selecting some of
the more important subjects, rather than dealing with each letter
in turn.

2. S.A.S.C. is proving useful as a listening post, and the
information which has been handed out at meetings has been
valuable. I notice that your proposal that the Dominions should
contribute more to the meetings has been discussed, and some
results may come to your efforts to promote fuller exchanges of
information among members. Such statements as appear now to be
contemplated should put Australia's efforts in a favourable light,
but I doubt whether information supplied for the use of members of
the sterling area other than the U.K. will be detailed enough for
worthwhile comparisons. I have in mind the fact that New Zealand's
reply to C.R.O.'s request for details of dollar cuts for use in
the India, Pakistan negotiations was much less informative than
ours. In any case you must be careful not to push the matter too
far. As you know we have, as a matter of high policy, always
avoided any attempt as between governments to assess relative
economy or sacrifice. This policy still stands. What we want is
information which will enable us to form a hunch (it can be no
more than that) as to whether or not we are being too tough (or
not tough enough) on dollars. But we do not want any inter-
governmental discussions at any level on this question.

3. Of the subjects dealt with at recent meetings, the address by
Clarke was clearly the most vital to us. [1] It is difficult to
assess from the written reports how much significance to attach to
his statements. Cripps, in his interview with the High
Commissioner, showed an appreciation of Australia's position when
he said that 'as long as there was a sterling area dollar reserve,
Australia would be entitled to draw reasonable requirements' and
when he said that the last thing U.K. wanted was to pay dollars
for Australian foodstuffs. Nevertheless, it is disturbing if, as
Grant gave you to understand, there is a school of thought in the
United Kingdom Treasury which believes that each sterling area
country should be required to live within its current dollar
income. This formula is, of course, not a new one. Eady [2] put it
to McFarlane when he was in London and it was also put to Haslam.

If it is merely one way of exerting pressure for economies it is
not so bad although still dangerous. If it is a reflection of a
belief that the sterling area is a liability to the U.K. and
should be jettisoned then it is more dangerous and, I think,
fundamentally unsound. In other words it is comparable to the
recent American newspaper comment about the sterling area
endangering E.R.P. and U.K. having to give up its role as banker
to the sterling area. I am surprised at your reports that this
idea should gain ground in Whitehall itself and would be glad to
have whatever information you can obtain on their thoughts. But be
discreet.