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44 Notes of Discussion

LONDON, 18 July 1949

Notes on Discussion with Mr. S.G. McFarlane, Savoy Hotel, London,
18th July, 1949

Present-Dr. H.C. Coombs, Messrs. S.G. McFarlane, F.H. Wheeler,
J.B. Wright
1. Mr. Wheeler outlined the origin of the matter for discussion:-

(a) the pressure for sterling devaluation,
(b) the possibility that at the time of any such sterling
devaluation the Australian Government might decide that the
Australian economy could not stand an appreciation of the A to
the full extent of the sterling devaluation or, perhaps, could not
stand even a partial appreciation. This would mean that Australia
would need to propose to the I.M.F. a change in the par value of
the A,
(c) the likelihood that any change in the parity of sterling would
be proposed and adopted over a week-end and the possibility that,
unless the U.K. consulted Australia in advance, there would be
very little time for Australia to take similar action,
(d) the desirability, therefore, of having factual material
available to the Australian Director in order that he might be
able immediately to consult the Fund on receipt of cabled or
telephonic instructions from the Australian Government,
(e) five documents had been prepared covering various aspects of
the Australian economy relevant to this question and these were
being handed to Mr. McFarlane in order that he might examine them
and see whether they would form a suitable basis. It would be
intended to keep them up to date by periodical revisions of the
essential facts and figures. The headings of the documents were
(1) Internal Finance
(2) Prices and Costs
(3) Balance of Payments and International Reserves
(4) General Economic Situation
(5) Banking and Money Supply.

The order had no significance and the documents had been kept
separate in the interests of secrecy.

[matter omitted]

12. The related question of a Fund drawing by Australia was
discussed and it was agreed that not even a preliminary sounding
should be made by Mr. McFarlane until possibly September and not
in any case until matter had been determined by Cabinet and
checked through London.

[matter omitted]

[AA: A571/135, 49/2670]
Last Updated: 11 September 2013
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