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Friday, 2 July 1920

Very surprised contents your cable 12th March. Government proposes deliberate next week on policy with regard to existing Commonwealth ships and proposals for future, and to consult you by cable. It may be that this sale is advantageous in view of all the circumstances, but I strongly feel that such important action should not be taken in anticipation of Cabinet approval. As to buying more up-to-date ships with proceeds this sale, you must delay until Cabinet has had chance of considering proposal. Garran will advise you of requirements of Constitution and Audit Act in relation to such financial transactions. As, however, you appear to have committed yourself in the matter of the sale, will make all arrangements with Customs, &c, as requested. . . .

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