Canberra, 18 March 1952
Use of Sale Proceeds of Australian Supplies
India has voluntarily offered to use the sale proceeds of Australian wheat on projects of our choosing. The attached paper covers the pros and cons of adopting their suggestion for a revolving fund. The question needs further consideration in Canberra partly because we cannot commit ourselves to make continued grants to India. There is the alternative of asking the Indians to select some projects upon which the £3.7m. of Australian proceeds could be spent. This is a matter which you might explore tentatively.
2. So far, Ceylon has not made the same offer as India. We cannot force them to do so, but it might be tactfully suggested that they discuss with us what projects they have in mind to finance with the proceeds of our flour.
[3. We should be cautious about having Australia’s name attached to projects considered unsound by the International Bank.1
[NAA: A10299.C13]
1 Handwritten addition.