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take the initiative in trying to persuade Australia and New Zealand to divert butter and meat from the United Kingdom market. This possibility was, however, raised by the New Zealand and Australian Ministers themselves, and officials will discuss what action can be taken.
5. 12
God
Section III of the recommendations (paragraphs 14) deal with the emergency action which must be taken to reduce the drain on the reserves in the immediate future. It was natural that this section should give rise to the greatest difficulties. At the beginning of the Meeting, in spite of the lead given by the United Kingdom and the Colonies, every delegation was inclined to say that, either because of its essential needs, its low standard of living, or its out- standing commitments, no substantial reduction in dollar imports could be made in 1949/50. As the meeting proceeded, Ministers became increasingly aware of the seriousness of the situation and of the necessity to make substantial reductions immediately if the sterling area was to continue to exist. They finally agreed unanimously (with the exception, of course, of Canada and South Africa) to the recommendations contained in this section, and we can regard them as being satisfactory. It will be seen from paragraph 14 that "Ministers agreed to inform each other within one month of the measures which their Govern- ments have resolved to take in the light of these recommenda- tions".
6.
The last section of the recommendations (paragraph 15) deals with machinery for continuing consultation between Governments on these matters. The creation of new machinery would have given rise to serious difficulties, and it was therefore agreed that the existing Commonwealth Liaison Committee, which was set up primarily to keep the Commonwealth Governments. informed on European Recovery Programme matters, should be adapted for the purpose of these consultations. This means that the Canadian Government will participate fully as a member of the Committee and will not be represented merely by an observer, which was the suggestion they made at one stage.
Ministers agreed to consult their Governments on the question of showing the recommendations confidentially to members of the United States Administration, and undertook to notify us of the decision on this point by 30th July. My own view, which is shared by the Foreign Secretary and the Chancellor of the Exchequer, is that we should so inform the Americans of the recommendations, though the document itself would, of course, not be published.
7.
8.
I therefore recommend: -
(1) that my colleagues should approve the recommenda-
tions contained in the Annex to this memorandum;
that, subject to the approval of the other Common-
wealth Governments, the recommendations should be shown confidentially to members of the United States Administration.
(ii)
Board of Trade, S. W. 1,
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21ST JULY, 1949.
-2-
H. W.
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7.
: