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THIS DOCUMEN96fPERTY OF HIS BRITANNIC Mce 19§ of 662
93
GOVERNMENT)
SECRET
C. P. (49) 160
21ST JULY, 1949
CABINET
31
COPY NO.
MEETING OF COMMONWEALTH FINANCE MINISTERS
Memorandum by the President of the Board of Trade
The Commonwealth Finance Ministers met in London from Wednesday, 13th July to Monday, 18th July, and officials are continuing to meet during this week to discuss a number of detailed points. The conclusions of the Meeting took the form of recommendations by the Ministers, which are subject to approval by their Governments. A copy of the recommendations is annexed.
2.
The Meeting was notable for the identity of views which was eventually reached, even on such a controversial matter as the necessity for immediate action in the for n of or equivalent to, cuts in dollar imports.to the extent of 25 per cent.
The Canadians naturally dissociated themsees from the recommendations about cuts in dollar imports, nd the South Africans, too, not being members of the sterling area dollar pool, were in a different position from the res. But all appreciated the necessity for drastic action immediately, and for a constructive approach to the long-term problem; and there was a unanimous determination to do whatever was possible to maintain the strength of the sterling area.
3.
Section I of the recommendations (paragraphs 1 9) deals with the long-term objectives of economic policy. The Meeting agreed that the aim must be the achievement of a pattern of world trade in which the dollar and non-dollar countries could operate together within one single multilateral system. In general, Ministers welcomed the talks with Mr. Snyder and Mr. Abbott, though the Australian Government felt some mis- givings, possibly because they had not been consulted about them beforehand. This part of the recommendations will form part of the general brief for the talks that will take place in Washington in September, and it did not give rise to any sub-
stantial division of opinion. Special emphasis was placed during the discussions on the obligations of the dollar area to make a multilateral system work, particularly by means of investment in under-developed and other territories.
4.
Section II of the recommendations (paragraphs 10 and 11) deals with the positive steps that should be put in hand immediately for the purpose of increasing the dollar earnings of the sterling area and reducing its dollar expenditure by diversions. The degree to which this can be done will depend to a considerable extent on what resources, particularly steel, can be made available to the Commonwealth by the United Kingdom, and it is clear that, unless there is a substantial increase in our exports of steel and some selective increase in our exports of steel capital equipment to the Commonwealth, we shall run into difficulties both on this part of the programme and on the emergency measures to cut sterling area imports, We shall have
to pabanf go bruk carefully the advantages and disadvantages of
action. The Economic Policy Committee dec
Policy fageal ded on 12th July (E. P. C. (49) 28th Meeting, Minute 3) that we should not
-1.