billion dollars would have to be a very drastic one. The Americans 
      will either have to ask us to meet the pay of their troops throughout 
      the world (at rate approximately double ours); or they will have 
      to cut off Lend-Lease from some major item, such as food. At 
      the very same time that the President has been emphasizing the 
      importance of our mutual aid when we have only just offered them 
      raw materials, it would be a bit stiff to take either of these 
                            measures.                       
 
                                                            
 
 
A favorable decision could take various forms. In no circumstances, 
      of course, should we agree, on our side, to allow: the amount 
      of this country's reserves to be settled by the Congress of the 
      Unites States, but that is no reason why the President should 
      not give instructions to his own Departments to take effect that 
      they need not begin to worry about our reserves until they exceed 
                        a certain figure.                   
 
      The most satisfactory revised directive would be one that fixes 
      no limits, but asks that we should keep in consultation with 
      the Administration about liabilities and balances. Failing that, 
      if there is to be a ceiling, it should be raised to not less 
                       then $2,000 million.                 
 
                                                            
 
 
Apart from our post-war liabilities, which, as I have said, 
      are likely to approach five times that amount, our reverse balance 
      of trade in the first two or three years after the war all by 
      itself exceed it. It is about the same amount as the Russian 
serves, and they, as I have said, have no corresponding liab
 
                                                            
 
 
I attach a brief version of our case in a form which may have 
      reached the President. This was prepared by Lord Keynes for Mr. 
      Dean Achesen aria Mr. Harry Hopkins, so that they could have 
      something brief in their hands for use at an appropriate opportunity.