811.71247H/71
The Consul General at Sydney (Moffat) to the Secretary of State
[Received December 3.]
Sir: 1. In my Despatch No. 124 of February 10, 1936, entitled “Australia and the Matson Line”, I reported the decision which the Australian [Page 712] Government had reached in principle to join with New Zealand in taking measures to “preserve British shipping lines on the Pacific”, including the reservation of the Tasman trade. Shortly thereafter the subject temporarily dropped from view while Australian and New Zealand Ministers were attempting to reach a meeting of minds with London on the various possible courses of action,—notably the allocation of a subsidy to British Pacific shipping by the interested Governments. Publicity on the reservation of the Tasman trade had pretty well died down until the recent arrival in Tasman waters of the S. S. Awatea. As far as I can ascertain the Union Steamship Company informed the Australian and New Zealand Governments that it would not maintain so expensive a vessel in the Tasman trade unless protected either by the exclusion of American shipping between Australia and New Zealand or by a subsidy distinct from that which would be given the Union Line to maintain a trans-Pacific service.
2. The first intimation received that a move in the direction of reserving the Tasman trade was imminent came on October 22nd in the form of a press despatch from London. A few hours later the New Zealand Government introduced enabling legislation to this effect, and later that same evening the Australian Government announced that it would soon follow New Zealand’s lead and introduce parallel legislation. It later appeared that the original idea had been for both Canberra and Wellington to move simultaneously on the reservation of the Tasman trade and the granting of subsidies to British shipping; however, the delay of the Imperial Shipping Committee in formulating its report caused New Zealand to abandon this plan and to seek legislation to meet the first phase of the problem before its Parliament adjourned.
3. In form at least the legislation will be “enabling”. The New Zealand Government has announced that it would not be applied until the United States had had an opportunity to comment, while the Minister of Commerce in Australia similarly intimated that a last opportunity would be given the United States to admit British shipping to the Hawaii–San Francisco trade. Some publicity coming from America expresses the conviction that the Dominions will not promulgate the legislation even when it is on the Statute book. I hope that the Department does not cherish this illusion. The two Governments would never have stirred up public opinion as they have done if they had not intended to carry through their plans. Furthermore, the influences which are in a position to exert pressure here, notably the Union Steamship Company and the related P. & O. Company, will lose no opportunity to press their advantage. The utmost I feel that we can hope for is a relatively short delay while conversations [Page 713] are going on—possibly until such time as our Congress is again in session.
4. The press states it as a fact that the British Government approves the plan of reserving the Tasman trade. In any event, the Prime Minister told me last year that London had withdrawn any opposition thereto,—an attitude which presumably represents the situation today. The move is motivated upon an alleged similarity between the Hawaii–American trade and the Australia–New Zealand trade. Both the Government and the press refuse to see, much less to acknowledge, any difference between coastwise traffic within the actual administrative territory of one party and between two political entities, each of which claims to be self-governing and each of which has a mutually exclusive set of coastwise regulations and tariff regulations. This is not the first time that the Australian Government has tried to claim all the advantages accruing from being merely a part of the British Empire, and at the same time to surrender none of the advantages to be derived from being a self-governing Dominion. It expects outside nations, including the United States, calmly to accept Australia’s selecting either the Empire rules or the Dominion rules by which to play the game according as she stands to profit by one set or the other.
5. We must face the fact that the idea of reserving the Tasman trade is extremely popular with all shades of political opinion in Australia. In fact, it is one of the few issues on which the Conservative and the Labor elements agree, the former because of their pro-British Tory leanings, the latter for considerations affecting the employment of Australian labor. Moreover, Australia realizes that no matter what happens, her individual interests cannot suffer. Should the Matson Line cut out New Zealand and make a three-week instead of a fourweek service from San Francisco to Sydney, Australia would profit by many American tourists coming to Australia instead of to New Zealand. Similarly, if as a Government we adopted any one of the various retaliatory measures open to us it would be English, but not Australian, shipping that would suffer.
6. The conclusion which flows from the foregoing is that the present move is an integral part of a tendency (visible in many fields) to exclude as far as possible from the self-governing Dominions all non-British competition. As such, I hope the Department will not analyze it in terms of a local Antipodean problem, but as a challenge from British shipping, which should be met in kind.
7. Meanwhile may I point out that the publicity emanating from the United States to date has not been of the best. Instead of explaining the issue the situation has been made more confusing. I enclose a copy of a Washington despatch found in today’s Telegraph as an [Page 714] instance in point. I likewise enclose, as typical of the general editorial comment, a leader from this morning’s principal Sydney newspaper, the Sydney Morning Herald.76
Respectfully yours,
- Enclosures not reprinted.↩