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COPY OF TELEGRAM (AMAZE 9467) OF 3RD MARCH 1949 Page 1

FROM WASHINGTON (U.K. TREASURY AND SUPPLY DELEGATION

TO MINISTRY OF FOOD

WHEAT CONFERENCE

REFERENCE AMAZE 9465.

At the meeting of Steering Committee this afternoon Wilson of Canada on behalf of some exports put forward the price proposals previously reported in F.0. Telegram 1200 FERTILE indicating that the floor and ceiling figures suggested for a four year agreement represented the firm and final offer of the unnamed exporters concerned. But these proposals were conditional upon importers as a whole undertaking to purchase a total quantity of wheat under the Agreement of 550 million bushels. This latter condition was also expressly stated by Wilson to be final and firm.

2. On behalf of the importers Anderson replied that these proposals would of course have to be very carefully considered but the importers would like to know not only which exporters put forward these proposals but also how the total quantities to be made available would be divided among them. The price proposals could not be dissociated from quantities and to expect importers to agree to take additional quantities without knowing their source was to ask them to buy a pig in a poke. He went on to say that if as in fact we had been given to understand the exporters proposed not only to make these proposals known in Committee of the whole but also even to publish them then he could not agree to any report going forward as from the Steering Committee. After a long discussion the exporters finally agreed that it was reasonable for importers to have an opportunity of consultation among themselves and a further meeting of the Steering Committee is to be held at the call of the Chairman. The odds now are that it will take place early tomorrow afternoon.

3. At the meeting of importers which followed this afternoon there was general support with the line which Anderson had taken. The discussion was concentrated mainly upon the extent to which under the most favourable of conditions importers might be able to increase their guaranteed quantities. It showed conclusively that with the best will in the world importers could not guarantee anything more than a total of 510 to 512 million bushels. There was therefore general agreement that at the Steering Committee tomorrow the line to put forward by Anderson on behalf of importers as a whole should be that if the exporters insisted upon 550 million bushels as a final condition of their offer then the Conference must break down. Our confident hope is that the exporters will have to abandon their position on quantities and that discussion on prices can thus be made more realistic.

4. Late this afternoon we have heard from the United Kingdom Treasury and Supply Delegation that E.C.l. financing of United Kingdom purchases of Canadian wheat cannot be arranged for the remainder of the first quarter of 1949 and that unless there is some change in legislation financing in future quarters will not be possible. Presumably an undertaking to secure such a change might be made a condition of United Kingdom adherence to a wheat agreement. Perhaps an amendment to the Appropriation Act could be put forward through indicating that existing provisions in respect of, for example, supplies in excess of domestic age 118h488would not apply to comage 11806488ect to International Commodity Agreement ratified by the U.S.A. this development you should see a FRAME telegram being despatched tonight.

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