back. The size and value of the annual merino wool clip, more than any other economic indicator, determined whether Australia would enjoy prosperity or suffer balance of payments difficulties which required reducing imports and belt tightening generally. In those days Australia produced eighty per cent of the world's wool supply. And the Korean War's wool boom, when wool prices reached 375 pence per pound - way beyond the fabled 'pound for a pound' of 240 pence - caused great inflationary pressures. Capital flows were controlled, as were imports. The tariff wall was very high. The Australian pound was tied to the pound sterling and thus unable to appreciate. Despite the impact of the wool boom the Menzies Government lost five seats in the April, 1951, election and was only 0.6 per cent ahead (50.3 - 49.7) in the overall vote. When the boom busted and wool prices halved, and would halve again by 1970, the world's textile industry had changed forever. Charles Massy tells us that soon after the Korean War started (June 25, 1950), the US Government secretly approached the Menzies Govt seeking to acquire the entire Australian wool clip at a guaranteed price (as the UK had done both in WWI and WWII). Despite Roland Wilson's advice in August, 1950, warning Cabinet to take the American offer seriously and "not offend American opinion on this" and not "encourage them to build up their flocks or substitutes" the Menzies Govt spurned the American proposal and as a consequence the