811.71247H/60
The Consul General at Sydney (Moffat) to the Secretary of State
[Received May 20.]
Sir: As foreshadowed in my despatch No. 124 of February 10, 1936, conversations are proceeding in London between the representatives of the British, Australian, Canadian and New Zealand Governments as to ways and means whereby it may be made possible for British shipping successfully to compete in the Pacific with the Matson Line. The Embassy in London is undoubtedly keeping the Department fully informed of the tenor of the discussions. For better or worse, the decisions reached at London will guide the shipping policies of the Dominions, and in the last analysis it will undoubtedly be Great Britain’s final stand that will govern the decisions reached in London.
This despatch, therefore, can only present one section of a much larger picture, namely, the reaction in the Antipodes to news items on the Conference which have been emanating from London.
Australia has by now definitely made up its mind that it will have to participate in subsidies, alike in assisting to build two new trans-Pacific liners comparable to the Mariposa and the Monterey, and to meet their running expenses. Australia assumes that Canada and [Page 711] New Zealand will join her in making a contribution to such subsidies, but she has been somewhat concerned at the hesitancy of the British Government to participate.
In the middle of the negotiations the Union Steamship Company announced the dates of withdrawal from service of the Makura and Maunganui on the Sydney-New Zealand-Tahiti-San Francisco service. The timing of this announcement was undoubtedly designed—(a) to take advantage of the anticipated anti-American feeling induced by the Government’s announced policy of restricting or diverting American trade, and (b) to increase the pressure on the British Government from Australia and New Zealand in favor of immediate subsidies. The announcement proved rather a boomerang, as despatches from London promptly carried the news that the British Government would not be stampeded into ill-considered action, and the New Zealand Government threw a monkey wrench into the discussions by announcing that if the New Zealand Government gave the Union Line a subsidy it would ipso facto require the exercise of some control over the Service:—“where the Government’s money goes”, said Mr. Savage, the Prime Minister, “the Government will want to have some say.”
Editorials throughout Australia on the shipping situation, while less numerous than I would have expected, have one and all followed the same general pattern. They start with the premise that because Great Britain has been running trans-Pacific liners for forty or fifty years it has a vested interest which should not be challenged. They consider American competition unfair, both because we subsidize our shipping and because we exclude foreign shipping from the Hawaii-San Francisco run. They refuse to see any distinction between reserving trade between San Francisco and Hawaii, which is an integral part of our territory, and reserving trade between two self-governing Dominions, each of which has its own coastwise laws and customs barriers. They preach the doctrine that it is unpatriotic for a British subject to sail under any but the British flag, and finally they are so engrossed with the immediate problem of trans-Pacific shipping that they are indifferent to possible retaliation against British shipping in other parts of the world.
Respectfully yours,