611.4731/128
Memorandum by the Secretary of State
The Prime Minister of Australia, Mr. Lyons,8 called, accompanied by the British Ambassador. His call was for the two-fold purpose of paying his respects and repeating the economic policies of Australia as they were being pursued under his Government—the fiscal policy of balancing budgets and the commercial policy of moderate tariffs being carried forward by unilateral action on the part of the Australian Government (this is after an impartial tariff commission makes investigation and recommendation or report and is based upon the same). The Prime Minister stated that the balance of trade with this country was considerably adverse to Australia; that while he appreciated the fact that our two countries produced the same staple commodities to a large extent, he did feel that we should explore every possible avenue to see if a mutually profitable and satisfactory trade agreement, to a limited extent comprising even but a few minor items, [Page 14] might be worked out and agreed upon. He said the beneficial effects economically would be much desired and it would also bring our peoples more closely together and preserve that personal and friendly relationship existing between both Englishmen and English-speaking peoples.
He added that Japan had been buying more and more of their wool at a good price; that they were being pressed by Japan to enter into a more reciprocal trade arrangement; but that he had delayed the matter on the theory that he had to leave for London some months ago, so that it was still in abeyance. He urged this as a reason for his anxious desire that this country and Australia should as early as possible work out even a narrow basis for an initial trade arrangement.
He mentioned wine, which would come under the 40 cent per gallon tariff of the United States; also unfair preference against Australia on meat going into the Philippines, which he felt should be corrected.
At the conclusion of his talk which was some twenty minutes in length, I replied that the British Ambassador must know how stimulating it was to me to listen to the views expressed by the Australian Prime Minister on economic and commercial policy; that I had been fighting for these and others over a long period of years, and that I need not repeat all the arguments I had been making, since they were generally familiar to the Prime Minister, as well as to the people of this country. I said further that I desired to congratulate the Prime Minister upon his leadership and his record of accomplishment in both fiscal and economic affairs in his country; that Australia stood out by herself in her advance movements and her championship of broad and liberal commercial policy; and that I was much heartened to confer with him and was glad to be one of his followers in this righteous movement back towards economic sanity and economic rehabilitation generally. I emphasized the program that this Government was carrying forward in an effort to restore international finance and commerce to its normal volume, adding that our progress was not left to our individual desires, but had to be governed by the extent to which public sentiment could be conducted and organized in support of our program; that we were moving just as fast as it was humanly possible; and that success depended upon the French, the British, and a few other important countries, joining Australia and the United States in carrying forward this broad and liberal program for business recovery. I stated that this program not only contemplated reduction to a moderate level and the removal when justifiable of trade barriers generally, but also exchange stabilization during coming months which within itself would lift one large layer of trade restrictions; that another coordinate objective at the same time was to substitute for the great mass of discriminations, including almost every sort of unfair [Page 15] trade method and trade practice, the principle of equality of treatment and opportunity, and that these objectives contemplated the gradual but certain wiping out of every sort of trouble-breeding trade method and practice which in the main were outright discriminations.
The Prime Minister finally mentioned the subsidy to the Matson Lines operating between the Pacific Coast and Australia.
I replied that every kind of artificial and arbitral trade method and practice, such as benefits, subsidies, rebates, drawbacks, countervailing duties,—to say nothing of clearing arrangements which had proved so disastrous, and a long list of other methods and practices of an arbitral and trouble-making character,—were included in this program for decent and liberal commercial policy. I finally added that there were so many of these bad and unfair trade methods that it was not feasible to successfully attack just one, because they all combined together and defeated most efforts to eradicate just one; that therefore it was very necessary from the practical standpoint to attack the entire system comprising from ten to twenty notoriously unfair and discriminate trade methods and practices with the view to uprooting all of them; and that I desired to say with emphasis that this was precisely what the reciprocal and general economic program which this Government was supporting had in view. I said to the Prime Minister that if our program should succeed as we hoped it might, this would dispose of his complaint about the Matson Line as it would dispose of a large range of artificial and unsound methods and practices in international finance and commerce.
- Mr. Lyons was en route to Australia from England.↩