Following for Mr. Pearson from Heeney, Begins: Reference paragraph 2 of teletype No. 3 of January 3, 1951,1' from the Permanent Representative regarding the Negotiating Committee on Contributions to Korean Relief and Palestine Refugees.

1. You will recall that on December 9, 1950, you decided to delay the submission of the Memorandum to Cabinet on a further Canadian contribution for Palestine refugees until a paper on general external air policy could be presented. We have in the meantime been carrying on discussions with the Department of Finance. In informal discussions members of the Department have had with Deutsch and Pollock there was tentative agreement on the terms of a Memorandum to Cabinet requesting a contribution of $750,000 for the period of January 1, 1951 to June 30, 1951, and $1,250,000 for the period of July 1, 1951 to June 30, 1952, the larger part of this latter sum to be contributed solely to the Re-integration Fund for per­manent resettlement. Clark, (quite rightly I think) is inclined to take a cautious view, particularly in the absence of his Minister. He points out that, in face of the large additional requirements for defence and under federal-provincial agreements, Ministers are bound to look narrowly at appeals for relief and assistance abroad. He welcomes, however, the approach to the general problem by means of an estimate of external aid in general. He is interested in the "community chest" principle.

2. We are pressing forward consideration of a general external aid policy, but there are far-reaching considerations involved and it is unlikely that a satisfactory memorandum on this subject could be ready for Cabinet in the next week or two. I think, therefore, that we should probably put forward the Palestine relief question separately and as soon as convenient to you. We should give an answer as soon as possible to the Negotiating Committee, which has for some weeks been consulting member states on their contributions and pressing them for firm commitments. In all fairness to Kennedy we should assist in giving him at an early date an indication of the amount which he will have at his disposal if we are to expect him to plan the long-range programmes which we have urged.

3. The general memorandum will be concerned with laying down a system of priorities on contributions Canada may be called upon to make in the future. The Palestine memorandum, on the other hand, will deal with a specific request to which Canada is partially committed through the Government's decision of June 12, 1950, to consider sympathetically a further request for $750,000 for the period of January 1, 1951, to June 30, 1951.

4. I am sending this by teletype in case you have to remain in New York over the week-end. If you return tomorrow I shall not of course expect a reply until I see you. Ends.