Begins:-

Since our delegation returned we have been giving urgent attention
to the recommendations of the London Financial Conference.

The re-examination of our dollar import budget with a view to
effecting the maximum practicable savings has not yet been
completed. But it has gone far enough to confirm that for the
reasons outlined in London by Mr. Dedman it is impossible for us
to reduce our import outlays in 1949/50 to a sufficient extent.

Therefore we have been forced to consider seeking alternative
sources of dollar finance in the current financial year and as
intimated by Mr. Dedman to the Chancellor of the Exchequer we
propose making an early approach to the monetary fund for dollar
drawings.

I am confident as indeed we have already been assured that we will
have your full assistance when we make our request upon the fund
and we would be grateful at this stage for any advice you can give
us as to timing and procedure in making that request.

When the subject was discussed in London with the Chancellor he
advised an early approach. In subsequent discussion the view was
put forward that it might be preferable to defer an approach to
the fund until E.R.P. allocation to the United Kingdom for 1949/50
had been finally determined. The consideration behind this was
that if it happened to become known that a member of the sterling
area was seeking dollars from the fund that portion of United
Kingdom aid which it was assumed would be applied to the deficit
of the rest of the sterling area might be reduced.

I appreciate the importance of this consideration. I must however
also keep in mind that Australian Parliament will be resuming on
7th September. Parliament will expect a clear and unequivocal
statement of policy from the Government and it is politically
necessary that I should be in a position to make such a statement.

Accordingly I would very much prefer to approach the fund with the
least possible delay.

I should be grateful if you could let me have an expression of
your views as soon as possible.