EXPORT POLICY. Memo. by Chancellor of the Exchequer.

The political attitude of the Argentine Government satisfactory and their belief in an Allied victory is is not not what it should be. They will not hold sterling for the sake of helping us, but only if they expect to be able to turn an adequate proportion of their sterling into goods. Apart from coal, our principal exports to the Argentine in the past have included cotton and woollen goods. If we maintain these exports, although on a reduced scale, it means that we shall have to cut down the needs of the Service Departments or of the civilian population, Thus a very difficult question of policy arises as to how far we can cut down textile exports and exports of other manufactured goods to the Argentine, Brazil and other South American countries without running an undue risk that we shall be unable to obtain food and raw materials from them.