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On the main item, Canadian wheat, eligibility depends on whether the United States Department of Agriculture determines United States wheat to be in surplus supply, and the Department will not consider this until after the 1st September crop returns. It is impossible to forecast how the decision will go, but the favour- able August crop report is discouraging to our case. Even if the decision were favourable for the future it is very doubtful whether it would apply retrospectively to expenditure in the third quarter of 1949, which accounts for $84 million out of the year's total of $309 million. At the most, therefore, we are not likely to get relief of more than about $220 million.
There is little or no hope of relief on Canadian cheese, bacon, eggs or tobacco. Prospects are better for pulp and paper and timber and possibly for the ineligible oil imports ($45 million together) and we might get, say, half ($10 million) of the miscellaneous manufactures.
On the second group of items we might perhaps get the freights ($10 million) and, say, half the oil equipment ($37 million).
Excluding wheat, the totals suggested above come to about $100 million. (b) Documentation.—Imports amounting to $68 million come to a large number of small, private importers and complexities of documentation have hitherto been held to make it necessary to omit them from E.R.P. financing. By simplifying the system we might get relief on perhaps $25 million.
2. Resumption and Intensification of United States Stockpiling
On certain assumptions about the amount of the United States appropriation and the sterling area share of the materials to be bought, the Board of Trade estimate, with all possible reserve, that purchases which benefit us might be anything between $50-$150 million in a full year-say, $100 million.
(Canada is also to be asked to increase her stockpiling. The possible benefit, however, is not thought likely to exceed, say, $15 million, so the round figure of $100 million above is taken to cover Canada as well as the United States.)
3. Revision of United States Policy on Drawings from the International Monetary
Fund
The countries with the main drawing rights are the United Kingdom, Australia and India. The rule is that 25 per cent. of the quota may be drawn in any period of twelve months, at a rate not exceeding 5 per cent. of the quota in each month. Assuming that each country could draw up to its full entitlement, the amounts available to be drawn are as follows:-
United Kingdom.-$325 million in the twelve months following the first new
drawing.
Apart from anything else, the United Kingdom is at present pre- vented from drawing because it enjoys E.R.P. Aid. Assuming that this and other difficulties were removed, the United Kingdom might draw $325 million before 30th June, 1950. Australia.-$50 million in the twelve months following the first new
drawing.
Australia intends to draw, when possible, as an alternative, in part, to reducing her dollar imports. Her 25 per cent. reduction of dollar imports amounts to about $50 million, but unofficially we understand that the cut will probably be only about $30 million. Assuming that Australia drew the full $50 million and that $20 million was in replace- ment of part of import cuts due, the net benefit to the central reserves over and above that already assumed from import cuts would be $30 million.
India. $100 million in the twelve months following the first drawing.
For present purposes it is assumed that India draws the full $100 million.
4. More Liberal Use of the International Bank for Reconstruction and
Development
Pagecret of the reserves is taken for this itemages flee is a strong probability that we shall have to allow any borrowing Commonwealth country to spend its borrowings on capital items over and above its reduced import programmes.
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