Following for Pearson and Max Mackenzie from Robertson, Begins: Reference token imports. Yesterday, Bryan³⁶ and I saw Syers and Nowell,³⁷ and put our case for the continuation of token import arrangements. They did not attempt to rebut its reasonableness but in the face of the Cabinet decision that no gold or dollars could be made available for such imports, there was really nothing they could do but report our representations to Ministers, and in the meantime hold up any further public statement on the subject.

2. This afternoon Cripps asked me to come down and discuss our difficulties with him. He had with him the file of Liesching's telegrams from Ottawa, from which it appeared that he had at an early stage of the discussions explained that the United Kingdom could not put up gold or dollars for token imports from any country. In agreeing that the question of how this would affect token imports from Canada hi 1948 should be the subject of subsequent "negotiation" in London, the United Kingdom appear to have in mind possibility of negotiations about our holding sterling against token imports generally, or perhaps permitting individual exporting firms to do so. Our representatives on the other hand, appear to have envisaged these "negotiations" as an opportunity for reviewing the token import schedule item by item, in the expectation that we would at least be able to preserve the more important import licenses without especially concerning ourselves about methods of payment.

3. Cripps conceded that the cost of token imports was very small beer in the overall exchange account, but justified his Government's general position on the ground:

(a) That they could not defend the expenditure of even very modest sums of gold or dollars on quasi luxury goods and articles that could be dispensed with at time when imports of essential foods and basic raw materials were being radically reduced:

(b) That they could not afford to introduce a new discrimination against United States by cancelling token imports from that country while continuing them from Canada.

4. He wondered, however, whether it would be possible to work out some special arrangement which would permit them to continue token imports from Canada and suspend them from all other countries requiring payment in hard currency. Speculating along these lines, he wondered if we could agree to permit token imports from United Kingdom of goods otherwise prohibited, on the strength of which special concession they could justify a reciprocal arrangement here. Alternatively, could we make possible the importation of anthracite coal which price differentials might otherwise prevent.

5. Some arrangement of this sort he said, would probably enable them to continue taking such items as rubber footwear, though there were other items on the token import schedule which he did not think they could possibly continue to buy. I said that I thought people in Canada would recognize that in present circumstances, and especially in the context of recent financial negotiations between the two countries, that United Kingdom could hardly be expected to put up dollars for types of merchandise which we ourselves were prohibiting for exchange purposes and that a revision of the schedule in this sense could probably be given an acceptable explanation.

6. As matters now stand, I am to see Cripps and Harold Wilson³⁸ on Monday afternoon to explore the position further. I should be glad to have your comments on the points raised in this telegram, and any new suggestions you may be able to offer. It occurs to me that if United Kingdom stick to their present position and absolutely refuse to put up dollars for unessential imports, we might ask them to suspend the token import scheme generally, so that if they do in fact permit the importation of some unessential goods under bi-lateral arrangements with soft currency countries, they would not be doing so under the token import rubric which was clearly meant as an earnest of theft intention of maintaining access to United Kingdom market for established trading interests. Ends.

³⁶Bryan, conseilter économique, haut-commissariat au Royaume-Uni.
A.E. Bryan, Commercial Counsellor, High Commission in United Kingdom.

³⁷Probablement R.M. Nowell, sous-secrétaire, ministère du Commerce du Royaume-Uni.
Probably R.M. Nowell, Under-Secretary, Board of Trade of United Kingdom.

³⁸Président, ministère du Commerce du Royaume-Uni.
President, Board of Trade of United Kingdom.