Dear Mr. President¹,

In accordance with the decision of the Executive Council a preliminary meeting of the Secretaries of the various Departments concerned with the terms of the Coal-Cattle Pact for 1938 with the United Kingdom met in my Department yesterday; Industry and Commerce, Agriculture and External Affairs, as well as Finance, being represented. At the outset of business a rather marked difference of opinion revealed itself as to the scope of the deliberations of this informal Committee; some members taking the view that we should try to secure as many amendments, in our favour, to the existing arrangement as possible, and others the view that we should not ask for any major change or concession but only for minor modifications. Those who held the former view stressed the fact that simply to seek minor alterations now would be considered as implying satisfaction on our part with the present state of affairs, and that, in any event, we should go ahead now as if nothing else but the Pact was in contemplation; while those who held the latter said that the British would be likely to refuse any concession other than a relatively small one, and that this refusal would re-act upon us later. The issue raised, which was supported by other arguments that I need not enter into, is so fundamental that I feel the best course to pursue now would be for you to see, if you can possibly spare the time, the Secretaries of the four Departments interested, and hear their opinions, and then give them a direction as to their future course of action. I hope this suggestion will commend itself to you.