1. We have been approached by UNRRA Headquarters, Washington, who
desire to ascertain whether Australia would be interested in
purchasing from them a quantity of material which Foreign
Liquidation Commission has earmarked at Manus island for UNRRA.

2. We understand that UNRRA intended to ship these supplies to
China for relief and rehabilitation purposes but have experienced
difficulty in handling, loading, and shipping these supplies from
Manus.

Furthermore ports in China are so congested that UNRRA are
unlikely to continue with their original plan to ship these
supplies to China.

3. UNRRA officials here estimate that the original cost of
available supplies at Manus is approximately 20 million dollars
but these are being taken over from the Foreign Liquidation
Commission at a price of fifty cents in the dollar. We understand
these supplies consist chiefly of hardware, paints, lumber,
machinery, road equipment, spare parts for motor vehicles and
other items which UNRRA plan to use for agricultural and
industrial rehabilitation. UNRRA have suggested to us that they
would consider selling supplies to Australia at one half their
cost which would represent approximately 25% of the original cost
to United States Government. UNRRA would accept payment in
Australian pounds or by any other arrangement that was mutually
satisfactory. We might add that the question of disposal to
Australian Government has been cleared by UNRRA with the United
States State Department.

4. UNRRA are sending a working party which should arrive at Manus
Island 6th December. If there is a possibility that the Australian
Government may be interested in the purchase of all or part of
this property from UNRRA it is suggested that the Australian
Government should send a representative to Manus to meet the UNRRA
working party on 6th December. This party will be headed by Mr.

Lambert, Assistant General Counsel, UNRRA Headquarters,
Washington, who has full authority to negotiate.

5. Would appreciate your comments immediately regarding UNRRA
proposal also advise whether it is proposed to send Australian
Representative to Manus to meet UNRRA working party, 6th December,
so that advance arrangements for accommodation can be made. [1]