CAB129-36 — Page 260

S DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY'S GOVERNMEN!

Page 260 125

ECRET

P. (49) 165

7TH JULY, 1949

COPY NO.

31

CABINET

THE DOLLAR CRISIS

Interim Measures which might be taken either by the United States or Canada

Memorandum by the President of the Board of Trade

A. UNITED STATES

We have already raised the following points with the

United States:-

TO

(a) More flexible administration of E. R. P. This was raised by the Chancellor of the Exchequer with Mr. Snyder, who suggested that it should be discussed with Mr. Hoffman on his forthcoming visit to Europe. The points which we wish to raise have already been studied by United Kingdom Departments here and preliminary representations on them have been made both to the E. C. A. Mission in London and to certain of Mr. Hoffman's senior officials who have recently been visiting Paris. Much the most important question is that relating to E. R. P. financing of Canadian wheat, on which representatives of E. C. A. continue to see serious difficulties. Their general attitude is that wheat, though not formally declared surplus by the United States Department of Agriculture, is in fact a surplus commodity and must be treated by E. C. A. as such. Arrangements are being made to press our representations on Mr. Hoffman when he comes to London for conversations at the beginning of August.

(b)

Stockpiling. This, too, was raised by the Chancellor of the Exchequer with Mr. Snyder, who said that in princ le he was in favour of the resumption and, indeed, intensifica

on of stockpiling purchases, but that action over a large part of the field was dependent upon the voting of the necessary appropria- tions by Congress. The necessary Appropriation Bill is still before Congress and it is suggested that the Chancellor's representations should be followed up by our Embassy in Washington as soon as the Bill has been passed.

Drawings from the International Monetary Fund (I. M. F. ) In recent months the United States have made a determined stand against the grant of drawings to countries (such as India) which they consider to be in a state of fundamental dis- equilibrium. We have contested the basis of the United States attitude, and in addition it was suggested to Mr. Snyder that, without prejudice to this underlying difference of view, the United States ought to be prepared to reconsider their policy in the light of the special and additional disequilibrium which has now arisen. Mr. Snyder promised to instruct the United States Executive Director on the Fund to re-examine this questipage which incidentally, becomes of greater importance to questipag(whicbf66acidentally, the sterling area as a result of the possibisitAustralia as well as India may wish to submit an application to draw dollars from the Fund).

It is doubtful if the United States