611.4731/117
The Consul General at Sydney (Caldwell) to the Secretary of State
[Received March 13.]
Sir: I have the honor to acknowledge the receipt, on January 23, 9 a.m., of the Department’s telegram of January 15, 8 p.m., replying to the Commonwealth Government’s trade proposals of June 4, 1934.4a As reported in my despatch No. 492 of January 25, 1935,5 35 of the 327 groups in this telegram were garbled in transmission (11 between Tutuila and Sydney and apparently 24 between Washington and Tutuila.) A repetition of the telegram was not requested, since it was possible to make what appeared to be suitable corrections in this office.
There is enclosed a copy of my communication of January 23, 1935,6 transmitting to the Prime Minister the information contained in the telegram.
[Page 11]The confirmation copy received from Tutuila bears the notation “Mailed to Sydney 1/16/35” from which I infer that the telegram itself was dispatched from Tutuila on or before that date. I am taking up with the Sydney office of Beam Wireless Service (which delivered the telegram to this Consulate General) the matter of the delay in transmission from Tutuila to Sydney.
When I was in Canberra on January 31 and February 1, 1935, I had rather long conversations, at their request, with both Dr. Page, Minister of Commerce (who will be Acting Prime Minister during Mr. Lyons absence in England) and Sir Henry Gullett, Minister in charge of trade treaty negotiations, in the course of which they expressed keen disappointment at the nature of the reply.
Sir Henry Gullett observed that he was not in office when the Prime Minister’s note of June 4, 1934, was sent and might not have worded it in the same way as its author had done and that the rejection of the proposals therein by the United States Government was not altogether unexpected by him; but that he was very deeply disappointed that the reply offered no hope of aid to Australia or of any further negotiations within the foreseeable future. He cited, in contrast, the statement of the Japanese Consul General at the opening of trade treaty negotiations on the same day, that if the proposals already made should prove to be unacceptable the Japanese Government was prepared to consider other proposals.
Dr. Page stated that he considers embargoes and quotas as the last word in abomination, and bilateral trade treaties covering the exchange of specific commodities as almost as bad, but that under present world trade conditions Australia is being forced to negotiate such treaties and had hoped for some aid from the United States. During my conversation with Dr. Page, there was present Mr. J. F. Murphy, who was recently appointed Secretary of the Department of Commerce, and who was formerly assistant Secretary of that Department. Mr. Murphy was at the Ottawa Conference, following which, in August, 1932, he spent a few days in Washington and saw Mr. Domeratzky, of the Department of Commerce, and Dr. Ezekiel, of the Department of Agriculture. From the manner in which Mr. Murphy discussed the proposals in the Prime Minister’s note of June 4, 1934, I am inclined to think that he may have been their author.
Sir Henry Gullett expressed very much the same views as Dr. Page. He said that when he was Minister of Trade and Customs some three years ago he had always opposed the demands for action designed to bring about a more even balance in the trade between Australia and the United States, which were made from time to time; that he realized that it is unwise in normal times to force a balanced trade between pairs of countries; and that goods have not been bought from the United States as a favor to that country, but because many of our [Page 12] products are more suitable for Australia than those produced elsewhere; but that Australia is faced with demands from various countries which threaten a most serious reduction in her exports and that the Government has been forced to undertake the negotiation of the trade treaties now under discussion with a number of countries. He referred also to Australia’s dependence upon the British market and the difficulties, in view of this condition, of offering concessions to other countries. I may say, in confidence, that Sir Henry Gullett gave the impression of being in a rather hopeless position in regard to this matter.
At the end of our conversation Sir Henry Gullett spoke with much emphasis of the feeling of friendship which Australia has for the United States and the realization of the necessity of retaining our friendship. He assured me that in no case would Australia take action concerning imports of American goods which could be considered as hostile; he said that there were several commodities now imported from the United States which Australia could arrange to obtain from other countries (mentioning oil, as one), but that only one American product, and that of no great consequence, would be affected by any of the present trade treaty negotiations. He did not mention the particular commodity in question, and I did not feel that it would be appropriate to inquire directly at that time.
As I stated on page four of my last political report (Despatch No. 503 of February 5, 1935)6 Sir Henry Gullett intends to return from London immediately following the conference, and without waiting for the Jubilee celebrations, and it is possible that he may travel via the United States, in which case he would visit Washington.
On October 10, 1934, the following reference to United States trade appeared in an article in the Sydney Sun:
“Efforts will also be made to correct our heavy debit balance of trade with the U. S. A., Canada, British India, the Netherlands, East Indies and Sweden.
“It is expected that Australia will bargain with the U. S. A. on the understanding that the duties on petroleum products and motor cars remain as at present, or are lowered slightly, if the U. S. A. is prepared to give more favorable treatment to Australian wines, wool and fruit.
“It was suggested today that preliminary negotiations would be opened with America before the end of the year, but that, before any treaty was concluded, Great Britain would also be included in the discussions.”
The German Consul General, Dr. Asmis, has informed me that, in reply to his direct question, the Japanese Consul General, Mr. Murai, stated that the proposals so far discussed by him will be further [Page 13] considered by his Government during the absence in England of Sir Henry Gullett, and that the Japanese advisors sent from Tokyo to assist Mr. Murai will remain in Australia until Sir Henry Gullett’s return. Dr. Asmis said that he is transmitting to his Government the proposals of the Commonwealth Government for consideration during this same period, and added that so far the Commonwealth Government has not offered to him, nor to any of the other Consuls General so far as he is aware, concessions of any real importance.
During my conversations with Dr. Page and Sir Henry Gullett I endeavored to explain the position of the American Government more fully than was done in my note of January 23, 1935, and also to ascertain what concessions the Commonwealth Government had in mind to offer in return for the concessions asked for on June 4, 1934, but obtained no concrete information. It is my impression that no definite concessions had been decided upon, and I am not sure that this matter had received any detailed consideration. In fact from what Mr. Murphy said, I gathered that he, at least, had expected that if any concessions had been desired by the United States Government they would have been set forth in its reply.
As of possible interest, there are enclosed excerpts from Parliamentary Debates of July 27 and December 21, 1934,7 regarding the trade treaty negotiations with Italy and Germany, respectively.
Respectfully yours,