1. Indications are that Congress will finalize control legislation this week. As it now stands the administration of controls will be mainly under the Departments of Commerce (priorities allocations, steel and other essential materials) Interior (fuels including petroleum) Agriculture (food and food products). Wage and price controls, if applied, will probably be under a separate agency or agencies.

2. Special units will be set up in Commerce, Interior and Agriculture to handle whatever control powers are delegated by the President.

3. In discussions which Chappell has had with N.S.R.B. and the Munitions Board relative to J.I.M.C., the question of controls has been given considerable prominence particularly from the viewpoint of implementation of prior consultation and coordinating controls as expressed in the statement of principles presently being recommended to both Governments through J.I.M.C.

4. Thinking on U.S. side appears to be that J.I.M.C. should have a positive role in prior consultation and coordination of controls. The roles of N.S.R.B. and the Munitions Board in whatever control systems are evolved will remain uncertain until the legislation is approved and the powers delegated.

5. Regardless of the roles of the Boards, both N.S.R.B. and Munitions Board are presently considering a close liaison link with the control operating agencies and they have indicated that they could in turn maintain contact with J.I.M.C. The relation of the Boards to the control agencies in the different departments has not received inter agency consideration yet and may give rise to considerable difficulties. In the meantime, it therefore seems essential that contact be maintained not only with the Boards through J.I.M.C. but also with the control agencies in the departments.

6. In discussions we have had with Chappell the suggestion has been made that a member of the Embassy staff might be delegated as the central point of contact here on control matters and, in order to provide a continuing J.I.M.C. link, the person designated could be appointed to the Joint Standing Committee of J.I.M.C. (Chappell is the only Canadian member while United States have Winant and Thorp). It will be necessary to discuss this question with the Ambassador when he returns but, inasmuch as the controls in which we shall have the greatest interest will be lodged in the United States Department of Commerce, the office of the Commercial Counsellor here might serve as the appropriate liaison link. We would appreciate any direction and comments on the above suggestions which we think could cover both effective liaison with the control agencies and also keep J.I.M.C. in the picture.

7. As the work in this field increases, it may be necessary to review the position from a staff point of view but, until the shape and extent of the controls are known, the present staff could take on the task.

8. Please pass a copy immediately to Mr. Max Mackenzie.