Following for Pearson from Robertson, Begins: Reference your telegram No. 2186 of December 31 st ⁵⁶

I. My talk with Cripps on Friday morning turned out to be pretty general and inconclusive. He reviewed the considerations which other United Kingdom spokesmen had already put forward about the difficulties they found in meeting our counter-proposals in respect of quantities and prices for 1950-51 and 1951-52. In general I felt afterwards that we had been perhaps arguing at cross purposes, since he spent more time explaining the impossibility of the United Kingdom taking wartime peak quantities of foodstuffs from Canada than in meeting the immediate practical problem of a fair deal on wheat. He said, however, that he was meeting to discuss the whole question with the Cabinet Committee on Economic Policy on Monday, to prepare their reply which would be communicated to you through Clutterbuck. It was left that Wilson-Smith would get in touch with me again before instructions were actually sent to Clutterbuck.

2. When I saw Wilson-Smith this morning he told me that yesterday's meeting of the Ministers was presided over by the Prime Minister, attended by Cripps, Bevin, Morrison, Aneurin Bevan and Strachey (Noel-Baker being still in Greece). They came to the conclusion that they could not agree to the quantities and prices we had proposed for the two contingent post-contract years. I gathered that in general they find commitment in respect of quantities more difficult than commitment in respect of prices, and that though they might go some distance to meet us under both heads, their new suggestions might fall seriously short of our view as to what is reasonable. I told Wilson-Smith, and have since expressed the same opinion to the Commonwealth Relations Office, that I thought the United Kingdom would be well advised at this stage in the discussions to concede on their own initiative that their counter-proposals in respect of quantity and price might not strike the Canadian Government as a fair and reasonable settlement of the "have regard to" obligation⁵⁷ and that they should of their own motion offer to forego drawing such part of the outstanding Canadian credit as might seem required to supplement their present offer in a full and mutually satisfactory settlement of the "have regard to" obligation.

3. It seems to me that the question of further drawings on the credit would inevitably he raised in our Cabinet if the United Kingdom counter-proposals fell appreciably short of our last offer, and that the general discussions could proceed in a less fractious spirit if the United Kingdom took the initiative of recognizing this relationship at this time.

4. They can make quite a good case on its merits against the continuing commitment to take 140,000,000 bushels of wheat through 1951-52, particularly on the eve of new negotiations for an International Wheat Agreement. They can also argue with some plausibility that $1.55 is a fairly high floor price to project four years forward, but in stating their case on these points they are apt to overlook the political importance of cleaning up the "have regard to" obligation in a tidy and mutually satisfactory way. Ends.

⁵⁶ Volume 14, Document 706.

⁵⁷Pour la discussion antérieure de cette clause de l'accord anglo-canadien sur le blé de 1946, voir le volume 14, chapitre V11, panic 6.
For previous discussion of this clause in the Anglo-Canadian Wheat Agreement of 1946, see Volume 14, Chapter Vll, Part 6.